Rotating blackouts in Mindanao are not yet disrupting the Philippines’ logistics chain but, if these continue, they could pose a serious threat.
Mindanao has been facing serious power outages for a few months now and businesses in the country’s second-largest island grouping say they lose as much as P30 million an hour because of the brownouts.
Arnel Gamboa, president of the Supply Chain and Management Association of the Philippines (SCMAP), told PortCalls that although power interruptions in Mindanao are escalating, they are “still not highly disruptive to warehousing and logistics, unlike (in) manufacturing.”
“So far, we can still take it,” Gamboa added.
However, he said that if the mostly three- to four-hour power disruption continues, “it can hamper supply chains as factories scramble to look for generating sets (gensets) as well”.
“It’s been happening for months now. It’s either the industry copes or breaks. I don’t think there’s much choice given the delay in power generation cap. It would take years to normalize.”
He added that the only alternative to the power outages is gensets, but noted these are costly.
“This is certainly no way to compete in the AEC (ASEAN Economic Community) though.”
Cold Chain Association of the Philippines, Inc. president Anthony Dizon told PortCalls in a text message that “generally, the cold chain industry can cope with power outages since all storage facilities have backup gensets, their operations will not be disrupted.”
He added that “understandably, however, operating costs will be higher. They will either need to pass on the cost to their clients or absorb the impact in their profits.”
Dizon said cold chain operators “don’t have a choice” and they could either stop operations, “which is worse”.
The Department of Agriculture website cited that as of May 1, there were 178 accredited cold storage warehouses in the country. Of these, 30 are in Mindanao, mostly in Cagayan de Oro and Davao.
Meanwhile, Constante Fariñas, the Philippine Ports Authority (PPA) Manila port district manager, said the outages have had “no effect” as ports are equipped with gensets.
He noted that the volume of domestic containerized and general cargoes handled at the port was the same for the first quarter and the end of April.
Engineer Joelson Arbotante, head of the PPA Engineering Division at the Port of Davao, told PortCalls in a phone interview that the power outages have also so far not affected port operations at Davao-Sasa Wharf.
He said the port’s generator remains capable of supplying electricity to keep operations going during blackouts, which for the last few weeks have been two to four hours long. Arbotante noted that recent outages have been shortened to 30 minutes. ––Roumina M. Pablo
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