Manila truck ban may affect PH exports

MANILA, Philippines – Manila’s expanded truck ban could have “far-reaching” repercussions on the country’s exports as hundreds of affected companies face closure, said Lilia de Lima, director-general of the Philippine Economic Zone Authority (PEZA).

At the Arangkada Philippines 2014 Forum on Wednesday, February 26, de Lima told reporters some 800 companies employing 200,000 workers are having a hard time shipping out their products because of the ban.

She cited one group, HRD, which has 5 companies and 400 40-foot containers going through the Manila port. According to feedback, de Lima said only a fourth of the shipments go through as a result of the limitations imposed on trucks.

On a daily basis, around $77 million worth of exports from companies located in the Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) pass through the Manila port, said de Lima. She said these companies account for 80% of total shipments out of PEZA ecozones.

“The (export companies in Calabarzon) are very much affected, they are in a very difficult position. This will definitely affect our exports. If they reduce their production, they are going to reduce their people. They cannot continue producing if they do not have places to stock up their goods. The best they will do is lessen their production.”

The ban was signed into law by Mayor Joseph Estrada on Wednesday, February 5. It covers “cargo trucks, gravel and sand trucks, cement mixers and other heavy cargo trucks with 8 wheels and up or whose gross vehicle weights exceed 4,500 kilograms.” Affected vehicles would only be allowed to pass through specific routes.

The ban was recently modfied to allow for a 5-hour window from 10 am to 3 pm.

But de Lima said the 5-hour window was not enough. “If this goes on and on for another two or 3 days, this could lead to suspension of operations or closures.”

Socioeconomic Planning Secretary Arsenio Balisacan said they are watching the situation closely.

He said while the truck ban could weigh on exports, this may be temporary.

“When we start with any reform, there are initial pains. But when you adjust to it, it becomes more manageable. We should look at the big picture, the long-term benefits we are hoping to achieve,” he explained.

Balisacan said though that they have yet to study the general impact, “the complete picture.”

Solutions

De Lima said PEZA has laid out a temporary solution that might help alleviate the situation, but declined to disclose the details until authorites approve the plan.

“We are looking for alternative ways,” De Lima said. “The ideal (situation) is for most of the finished goods in ecozones in Calabarzon to ideally ship through the Batangas port. From 2011, we have been pushing that.”

PEZA is also looking at extending incentives, such as discounted fees for export firms using the Batangas port.

Fees for Batangas port users have been halved since 2012 by PEZA. The fee slashing, however, was not enough incentive for ecozone firms to shift volumes from Manila. This was because only one shipping line, Maersk, operates out of the Batangas port.

De Lima noted the situation could worsen. Most of the large printer companies that have established operations in Calabarzon such as Murata, Canon, Brother, and Epson, will start shipping products by sea in 2014.

Calling it a “chicken-and-egg situation,” De Lima said shipping lines did not want to come here “because they say there is not enough volume. But now the volume is beginning to go up.”

While Manila’s truck ban would not automatically cause companies to shift their operations and use the Batangas port, de Lima said local locators have to be convinced “to talk to their mother companies to influence their shipping lines to call on the Batangas port.” – Rappler.com