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The Philippines retains its 18th rank out of 50 most promising emerging logistics markets worldwide in the latest edition of the Agility Emerging Markets Logistics Index
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The Philippines received an overall score of 5.18 in the 2023 index, a slight improvement from the previous year’s 5.16 score
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The Philippines was cited for its digital readiness in Asia, ranked at 9th place from 10th last year
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The country remained at No. 13th in international logistics opportunities, rose to 18th in domestic logistics opportunities, but dropped to 33rd from 32nd in business fundamentals
The Philippines retained its 18th spot in the world’s Top 50 most promising emerging logistics markets ranking, as reported in the latest edition of the Agility Emerging Markets Logistics Index.
The country received an overall score of 5.18 in the 2023 index, a slight improvement from the 5.16 score in 2022.
The annual index—conducted by global logistics industry research and analysis service provider Transport Intelligence and global logistics company Agility—uses economic and trade data, social indicators, and transport development to rank 50 emerging markets countries for their potential as logistics markets. About 750 logistics industry professionals participated in the 2023 index survey.
The Agility Emerging Markets Logistics Index examines key areas in logistics market development, namely, domestic logistics opportunities, international logistics opportunities, business fundamentals; and digital readiness.
The Philippines was cited for being one of the strongest in digital readiness in the Asian region with a score of 5.99, enough to place 9th from the previous year’s 10th rank. Digital readiness is a key measure for the potential and progress of an emerging market to pursue a digitally led, skills-rich, innovation-oriented, and sustainable economy.
According to the report, digitalization has become one of the most significant growth engines for many emerging economies. For instance, digital readiness and connectivity played a crucial role in overcoming the difficulties of conventional trade during the pandemic and facilitating recovery in Southeast Asia.
The survey respondents cited five critical factors in considering digital readiness of a market:
- Technology adoption (internet and mobile phone users as a percent of population)
- Speed and reliability of internet connectivity at facilities
- Financial and banking ecosystem to support e-commerce (e.g., access to online and mobile banking, and cashless payments)
- Online security
- Availability of local IT talent
The Philippines also retained its 13th rank in international logistics opportunities, which measures internal and external demand for trade intensive logistics services and the capacity of individual emerging markets to facilitate cross-border logistics operations. For the 2023 survey, the country scored 5.28 in international logistics opportunities, a slight improvement from 5.25 in the previous year.
The country’s ranking rose to 18th from 19th with a score of 5.02 from 5.00 in domestic logistics opportunities. This measures the performance of each emerging market and its potential to sustain and develop domestic demand that requires competitive logistics markets.
When it comes to business fundamentals—which measures the openness, robustness, fairness and strength of each emerging market’s business environment, rule of law and market independence—the Philippines dropped to 33rd place from 32nd place, with a score of 4.31 from 4.38 in 2022.
The top nine emerging logistics markets retained their rankings in the 2023 index, led by China and India, and followed by United Arab Emirates, Malaysia, Indonesia, Saudi Arabia, Qatar, Thailand, and Mexico. Vietnam took the 10th spot, replacing Turkey which was ranked 11th place.
Arabian Gulf countries—UAE, Qatar, Saudi Arabia, and Oman—again offered the best business conditions. Malaysia, with the 4th best environment for business, was the only non-Gulf country in the top 5 list.
China and India took the top tier for domestic and international logistics. India also jumped four spots to No. 1 in digital readiness, followed by UAE, China, Malaysia, and Qatar.
Nearly 70% of the survey participants said they are bracing for recession amid higher logistics costs, spiking energy prices, slowing demand, and ongoing supply chain disruption arising from China’s battle to contain COVID-19 and Russia’s war in Ukraine, as well as the impact of climate change.
Nearly 70% of logistics executives see 2023 recession as “certain” or “likely”
Ninety percent of the 750 industry professionals surveyed also said their shipping, storage and other logistics costs are well above pre-pandemic levels from early 2020.
The Asia-Pacific region remains as the most attractive global manufacturing hub, with 23.1% of the respondents reporting having production activities in the area, driven by steadily increasing investment flows and GDP growth.
While China is the current top alternative destination for production/sourcing activities, it looks like global supply chains are on the move. According to survey findings, Southeast Asia, India, Europe, and North America will be the more favored areas from 2023 onwards. – Roumina Pablo
