For today’s guest columnist we again welcome Norman H. Adriano. Norman has been in supply chain management for more than 25 years. An Industrial Engineer, he has held various executive management positions in multinational and local companies in the Philippines. He is a two-term past President of the Supply Chain Management Association of the Philippines (from 1995 to 1996). He can be reached via norman.adriano@gmail.com. — Ed Sanchez, Executive Director
Come 2015, the ASEAN markets are opening up, providing the duty-free movement of services, products and talents within the member countries. Is the Philippines ready for this? Let’s take a look at the logistics side of the issues.
We are an archipelago of more than 7,000 islands where most economic activity is done in Metro Manila in Luzon and in Cebu and Davao in the south.
The challenges in moving goods today cannot be solved by 2015. What are those challenges?
Land Transport
Still the most used mode of transport for moving goods. The road network is generally good around Metro Manila and most parts in Visayas and Mindanao. A major challenge is the flooding during the rainy season that paralyzes road transport albeit temporarily. Another major issue is the traffic problem caused by too many vehicles and lack of ample public transportation. Traffic solutions initiated by government are almost always met with disagreement by road users.
Sea Transport
The major port where there is focused investment in passenger service and equipment is also found in Metro Manila. The other ports like Batangas (South Luzon), Subic (North Luzon), Cebu (Visayas), Cagayan De Oro and Davao (both in Mindanao) serve local and international freight transit but are limited by equipment. Thanks to the Ro-Ro (Roll-on, Roll-off) system, the local transit limitations are somewhat alleviated but at a higher cost to users.
Air Transport
The main airport, NAIA, is located in Metro Manila. It serves both international and local passengers as well as freight services. There is a plan for airport upgrading but completion will take time. Most of the provincial airports cater only to domestic flights with very limited cargo capacity. Upgrading of these airports has less priority unless a private entity enters and is allowed to do so.
Government Agencies
Agencies that need to collaborate with one another have, unfortunately, not perfected that art. We see individual efforts clashing with one another and the results are more problems on top of those they want to resolve. Several traffic czars have come and gone. Many projects like the limited truck ban have been met with apathy, to say the least, by road user groups. While government intentions must be presumed right, the implementations still went awry.
Not So Bright Prognosis
2015 is just around the corner and whatever logistics-related issues we have today will surely not be resolved before then. More so that most government infrastructure projects are targeted to be completed before the sitting President vacates his office in 2016.
There are more preparations being done in the private sector especially by the MNCs operating in the Philippines. They have accepted the fact of market integration and have long prepared for the issues that they see it will bring to their companies. I think it is also safe to assume that they are also already awaiting the rewards that the market opening will bring to their bottom-line.
While the new and old players will be in the same playing field come 2015, the new players from the other ASEAN countries will have much more resources to cope with and even alter the field to suit their needs. They have planned for it, prepared for it and budgeted for it. That is the scenario we face and there are pros and cons at the end of the day for the Philippines. But surely, a lot of local industries will fall down the wayside as a result.
Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email secretariat@scmap.org. For more information please go to SCMAP website: www.scmap.org
