The Department of Trade and Industry-Supply Chain and Logistics Management Division (DTI-SCLMD) has partnered with the World Bank (WB) to assess the Philippines’ logistics performance and efficiency and to help formulate better policies for the sector.
As part of the project, SCLMD and WB are conducting surveys with manufacturers and logistics service providers, targeting to present results of the first Logistics Efficiency Indicator in June.
The concept note for the project, provided to PortCalls, pointed out that “in order to have more targeted logistics development policies, it is necessary to obtain quantitative data related to the current logistics capabilities of manufacturers and logistics service providers in the country.
“This baseline assessment is critical before any meaningful policies can be formulated.”
Aside from helping make policy, the data from the joint project will be used “to find the pain points of the sector for the regulators to start looking into” and monitor the industry’s growth, according to WB-International Finance Corp. consultant Dr. Roberto Galang.
The team has tapped WB consultant Dr. Ruth Banomyong, who conducted similar assessment projects in other Asian countries such as Indonesia and Vietnam, to lead the project.
In a recent focused group discussion with freight forwarders, Banomyong noted the lack of empirical data in the country’s logistics industry.
The country’s only source for measuring the logistics industry performance is the WB’s biennial Logistics Performance Index report, which is based on a survey of operators on the ground (global freight forwarders and express carriers) providing feedback on the logistics “friendliness” of the countries they operate in and trade with.
Banomyong said it is important for government, especially those promoting the competitiveness of the country, to have a baseline on the capability of the country’s logistics sector. This could also be used to compare the country’s logistics industry with its peers in the Association of Southeast Asian Nations and other countries, Banomyong said.
He added that logistics supports businesses to become more competitive. She noted that over the years, the role of logistics service providers has evolved from just transporting cargoes to providing value-added services and business solutions to clients.
“So logistics is very important not just from the cost saving [angle] but also from the perspective of enhancing adding value to the customer,” Banomyong said.
According to the project’s concept note, “effective logistics development can greatly facilitate trade facilitation through global connectivity as it contributes to lower costs and clearance time for imports and exports, and this in turn would enhance market expansion especially for export cargo due to improved cost competitiveness and shorter time to markets.”
It also pointed out that logistics is one of the major expenditures for businesses, so the industry has an effect on other economic activities.
Separate from the logistics efficiency indicator, SCLMD is in the final phase of crafting the country’s first National Logistics Master Plan, seen to help address issues that affect the competitiveness of the Philippine logistics industry, including the lack of infrastructure and regulatory bottlenecks. – Roumina Pablo
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