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Philippines Freight Transport Report Q2 2010Published by: Business Monitor International Published: Feb. 26, 2010 - 63 Pages Table of Contents
AbstractIn January 2010, the Philippine Ports Authority (PPA) awarded a 25-year contract to Asian Terminals Inc(ATI) for upgrading, managing and operating Container Terminal ‘A-1’ in phase II of the Port ofBatangas. Under the terms of the contract, the company will pay US$125mn to the authority over thecontract period. ATI also operates Phase I of the Batangas port. The port aims to be an attractivealternative to the Manila harbour for shipping lines. BMI believes the development of the BatangasContainer Terminal will help boost the country’s trade, which has been hampered by a lack of investmentin its ports sector. A number of ports in the Philippines are suffering from congestion.We are more optimistic over the Philippines’ macroeconomic prospects, compared to our last quarterlyreport. While we reduced 2009-estimated GDP growth to 0.8% (down from 1.5%), we have boosted theforecast for 2010 to 4.4% (up from 2.6%). The outlook for the five-year forecast period from 2010 to2014 is for average GDP growth of 4.1% per annum, which is, however, below the 4.4% rate achieved in2005-2009. This would give freight a reasonable platform for development, although companies may facegreater pressure on their margins than before. Our predicted tonnage growth of 4.4% will be just ahead ofthe average expansion of GDP over the next five years. While in many developing economies freightgrowth usually exceeds GDP growth by a significant margin, this relatively smaller gap between the tworates in the Philippines shows the extent to which the transport sector is failing to live up to its fullpotential. The airfreight sector is expected to experience the most significant growth rate, averaging 5.4% y-o-y,and taking into account cooling demand. Next in importance will be rail freight, growing by 5.0% from alow base as a result of the Northrail and Southrail projects. We see shipping growing by 4.3% as thesector emerges from the 2009 recession. One constraint facing the industry is the environment in which itoperates. Comparatively speaking, the Philippines’ BMI freight rating is relatively disappointing inrelation to regional peers, with an overall score of 48.4 (out of 100). Under most categories, the nationalindustry received a medium to low score. Freight and infrastructure growth rates, together with thetransport intensity index (a measure of the dynamism of foreign trade) are all at the lower end of thescale. For the 2010-2014 forecast period, we expect the transport and communications sector to lead theeconomy as a whole, as far as value of output is concerned. It will achieve average annual growth of4.3%, versus 4.1% for overall GDP. Again, the gap between these two rates is narrower than experiencedin many other emerging economies. The total value of transport and communications GDP will rise toUS$22.5bn in nominal terms by 2014, representing 7.2% of the Philippines’ GDP. Get Full Details About This Report >> |
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