Philippine Finance Secretary Carlos Dominguez III has cited the need for corporate giants in the logistics industry to help micro, small, and medium enterprises (MSMEs) take advantage of the benefits of state-of-the-art distribution networks through more private-led investments in this sector.
Dominguez in a statement said the administration has anchored its strategy of rapid economic expansion on its ambitious Build Build Build Infrastructure Program to lower the cost of transporting goods, improve linkages across the archipelago, encourage efficient agriculture, and clear the way for inclusive growth.
But the government cannot lift the economy by itself, he said, as it needs the full support of the private sector in investing in infrastructure projects, such as the logistics facility that Fast Logistics has just built for Unilever Philippines in Cabuyao, Laguna.
“We need the enthusiasm of the private sector to make the investments that will make expenditure for new infra worthwhile. We need thousands of small and medium enterprises that will complete the supply chain of larger industries. We need facilities that will held aggregate rural produce and deliver efficiently to the cities. We need to foster the chains of integration that will, in turn, produce a more coherent economic growth,” said Dominguez at the recent inauguration of Unilever’s Cabuyao warehouse.
The state-of-the art warehouse was constructed and fully engineered by Fast Logistics to speed up the sorting and distribution of Unilever products and was designed to accommodate various transport vehicles needed to ensure fast delivery.
“This great facility is a perfect example of how the private sector could help fill the gaps in our national logistics system. The quicker we are able to deliver the goods, the faster our economy can grow. In the end, the better we will be in bringing down poverty incidence and building a more hopeful future for our people,” Dominguez said.
Infra gap consequences
According to Dominguez, inefficient infrastructure adds to production costs and diminishes competitiveness, leads to high food prices for urban consumers, and worsens poverty.
The infrastructure gap, Dominguez said, has been exacerbated by the country’s archipelagic nature that has led to the uneven development of island economies, aggravated by the concentration of economic activities and congestion in large urban centers.
He said that decisive government action is needed to address this inherited infrastructure and logistics gap to ensure that the country’s economic growth is consistent with its potential and coherent with the rest of the region.
“This is the reason why the strategy of rapid economic expansion adopted by the Duterte administration is anchored on an ambitious infrastructure program. This infra program is intended to bring down the costs of transporting goods, improve linkages in the domestic economy, encourage more efficient agriculture and pave the way towards inclusive development,” Dominguez said.
Moreover, the P8-trillion investment to fund the infrastructure modernization program of the administration will create more jobs, improve land prices, boost domestic demand, and serve as a stimulus that will enable the economy to expand at an even faster rate, he said.
“The infra program is the key to reducing disparities across regions and improving the productivity of our agriculture. It seeks to bring down the costs of manufacturing goods and delivering them to consumers here and abroad. In a word, this infra program is key to making us fully competitive in this most dynamic region of the world,” said Dominguez.
‘A thousand more facilities needed’
He said the Philippines would need “a thousand more facilities” like the one built in Cabuyao as well as other companies to transform the country into a “truly modern economy.”
“Our economy needs a thousand more facilities like this one,” he said of Unilever’s warehouse. “The country’s logistics system has fallen behind those of our progressive neighbors in the region. One may speak of an infrastructure gap between our neighbors and us. This is the result of many years of underinvestment in infra as we struggled with working down our foreign debt.”
He pointed out that “the infrastructure gap exacerbated the fact that our economy is spread across the many islands of our archipelago. Poor infra resulted in the uneven development of our island economies and aggravated the concentration of economic activity in the large urban centers.”
This, he said, produced “the congestion we are now working hard to deal with.”
“The weak infra and logistics system we inherit requires decisive government action. Otherwise this will inhibit our ability to achieve economic growth consistent with our potential and coherent with the rest of the region,” Dominguez said.
Image courtesy of khunaspix at FreeDigitalPhotos.net
