Manila port issues worry Japanese investors

March 30, 2015 at 14:12

Amy R. Remo

Japanese investors warned that lingering problems concerning port congestion might drive away new investments and funds for expansion activities as foreign companies continued to worry about a repeat of a situation that resulted in huge economic losses and higher prices of consumer goods.

Nobuo Fujii, vice president of the Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI), said that logistics companies from Japan had even been sending teams to the country to monitor the situation at the Manila port.

Fujii noted that while they had been seeing “gradual improvements” to the port situation compared to last year, logistics costs, such as trucking fees, remained high. They said trucking fees, for instance, had not gone back yet to their pre-truck ban levels.

This, according to the group, has prompted many Japanese firms to adopt a wait-and-see stance in their expansion and investment plans in the Philippines.

“The situation seems to be getting better now. Our understanding, however, is that more time is needed for the situation to get back to normal. It is also true that the situation is greatly affecting our businesses and the planning of our business operations in the Philippines,” Fujii said.

Another pressing concern, Fuji added, was the possibility that the congestion at the Manila ports might happen again given new challenges, and if the measures that the government had put in place would be enough to address rising cargo volumes.

Ryuichi Kuwajima, an expert from the Japan International Cooperation Agency (Jica), explained to some 150 JCCIPI members in a recent forum that the congestion at the port of Manila was interrelated with the heavy traffic situation outside the port.

Add to that, he said, was the fact that the ratio of import against export in the Philippines was 3:1, and about 70 percent of imports and exports were for Metro Manila.

According to Kuwajima, Japanese companies in industrial parks in south of Manila have decided to to establish their businesses in the Philippines with the assumption that expressways and container terminals at the port of Batangas will be well developed.

However, it was only recently that these companies have started to use the ports of Batangas and Subic due to the congestion at the port of Manila, which has a capacity of 3.6 million twenty-foot equivalent units (TEUs). The ports of Subic and Batangas have capacities of 300,000 TEUs and 600,000 TEUs respectively.

“The port of Manila remains the largest logistic hub in Metro Manila that supports economic activities in the Philippines. On March 2, 2015, the government has declared that the congestion in the port of Manila has been resolved. However, considering anticipated future challenges such as typhoons, implementation of traffic regulations in various events, and traffic congestion in Metro Manila worsening every year, it is important to continuously tackle the congestion problem at the port of Manila,” Kuwajima explained.