PUBLISHED AUGUST 15, 2014 Manila port logjam fans inflation concerns Economic growth expected to be hurt if situation drags on [MANILA] Containers with goods from garlic to microchips are piling up at the main ports in the Philippines six months after a truck ban took effect, causing a supply logjam thats fanned inflation and may impair output. Its hurting production; its raising our costs, said Alfredo Yao, president of the Philippine Chamber of Commerce and Industry which has 1,500 members. Inflation has accelerated. It wont be long before it hurts economic growth. Manila expanded a daytime ban on trucks in February, doubling the turnaround time for the vehicles, crowding the citys three ports and holding up goods meant for consumption and production. The restrictions, coming amid agricultural shortages caused by typhoons, spurred food inflation to a five- year high in July, exacerbating the challenge to the central bank as there is little it can do to check supply constraints with monetary policy. Imports fell 9.6 per cent in May, the biggest decline since April 2012, according to data compiled by Bloomberg. As many as 12,000 containers at Manilas ports have been stuck for more than two months, the Philippine Ports Authority said on Aug 5. Most manufacturers that need intermediate products may be affected, said Cayetano Paderanga, an economics professor at the University of the Philippines and former head of the planning agency. As the saying goes, for want of a nail, the kingdom was lost. The benchmark Philippine Stock Exchange Index was little changed at the close on Wednesday in Manila. The peso fell 0.3 per cent to 43.965 against the US dollar, prices from Tullett Prebon Plc showed. Manilas ports account for about a third of the countrys inbound and outbound cargo, according to official data. The nations trade and jobs may be affected by the truck ban, International Container Terminal Services, which handles 65 per cent of the volume at the citys ports, said in February. While the ban on trucks was introduced to ease road traffic congestion in Manila, trucking costs have more than tripled to as much as 40,000 pesos (S$1,143) per trip, Mr Yao said, and some international shipping lines have been skipping Manila to avoid the waiting time of as many as seven days to offload cargo. Those who brave the delays have imposed extra fees of as much as 35,000 pesos per cargo, the chamber of commerce said. Port utilisation, which peaked at 110 per cent in June, eased to 89 per cent in the first week of August, according to a statement on Aug 5. The congestion has affected about 20,000 workers because of layoffs, reduced work days or forced leave, Lilia de Lima, director-general of the Philippine Economic Zone Authority, said at a Senate hearing on Wednesday. Some companies have started shipping by air, which has raised delivery costs by as much as ten-fold, while others have been hurt by cancellations, she said. Philippine gross domestic product rose 5.7 per cent in the first quarter from a year earlier, the slowest pace since 2011. Manufacturing grew 6.8 per cent, compared with 12 per cent in the previous three-month period, while trade gained 5.6 per cent versus 6.4 per cent. In July, the central bank raised its benchmark interest rate for the first time since May 2011, and said that it will take further policy action if there are risks to its inflation target. It also raised its price-gains forecast for next year. The city will open another route which truckers can use the entire day, vice-mayor Isko Moreno said at the Senate hearing, while trade secretary Gregory Domingo said that the government has asked companies to release cargo even on weekends. - Bloomberg
Posted on: Fri, 15 Aug 2014 01:22:15 +0000
Trending Topics
Recently Viewed Topics
© 2015