Cargo containers filled with goods from toys to electronics are piling up on Manila's docks as a rush hour truck ban threatens to dent growth in the Philippines, Southeast Asia's fastest-expanding economy.
Incoming cargo boxes have lingered at International Container Terminal Services, Inc.'s 100hectare port facility an average of 10 days up from the usual six since Mayor Joseph Estrada declared the ban in February, Christian Gonzalez, the company's regional head, said in an interview. The port, which can't be accessed without going through Manila's roads, handles more than half of the nation's overseas freight.
While the ban was intended to ease chronic gridlock in the heart of a region of almost 23 million people, the shipping backlogs have become so severe they are being called a drag on the country's growth. The former American colony saw its debt rating raised to investment grade last year after decades of corruption, political upheaval and lackluster growth that led to it once being dubbed the "sick man of Asia."
Starting yesterday, container trucks were allowed to move their cargoes outside the Manila International Container Port after Manila Mayor Joseph lifted the truck ban until May 20 to decongest the Port Area.
"You're effectively closing the tap on growth," Gonzalez said of the truck ban. "People need to start realizing this is a long-term issue for the economy."
Citigroup, Inc. estimated in a note dated March 7 that delays could lead to an annual loss of P61 billion ($1.4 billion) to P320 billion, or as much as 2.9 percent of gross domestic product in Southeast Asia's secondmost Populous nation. That would dwarf a potential annual gain of roughly 30 billion pesos from having less congested roads in the capital, said Jun Trinidad, a Citigroup economist based in Manila.
Estrada enacted the truck ban on Feb. 24 in an attempt to ease traffic in a place notorious for daily commutes of five hours or more. Eightwheeled trucks and vehicles weighing more than 4,500 kilograms (10,000 pounds) are prohibited from Manila roads from 5 a.m. to 10 a.m. and 3 p.m. to 9 p.m., Monday to Saturday.
"Some quarters are still pushing for a few more revisions to the truck ban," said Abigail Valte, spokeswoman for President Benigno S. Aquino III. "We leave it to the local government to act on these requests."
Estrada and Vice Mayor Isko Moreno didn't answer phone calls or reply to mobilephone messages.
The city with a population of 1.7 million is part of the urban sprawl that is Greater Manila. The region, which includes the 17 cities and municipalities of Metro Manila, is projected to have a population of more than 30 million by 2025, according to data compiled by Bloomberg.
The former president, who was forced from office in an anticorruption uprising 13 years ago, has made fighting urban decay a priority since returning to politics and winning election as mayor last May. The city estimated in February that the ban would affect more than 4,000 trucks.
"The days when buses and trucks were king of the road are over," Estrada, 77, said in a speech after the regulation took effect. "Billions of pesos are lost due to the daily gridlock."
He has scaled back the ban since his initial announcement, which could have barred trucks from city roads from 5 a.m. to 9 p.m., or 16 hours a day. Trucks carrying fuel and perishables such as food are excluded from the rules.
The traffic-control measure faces opposition from truckers and business owners.
"Despite the fact facilities are being developed to handle substantially more cargo, this truck ban is effectively reducing the country's growth potential and is damaging the economy," the European Chamber of Commerce of the Philippines said in a statement posted on its website May 6.
Alberto Suansing, director of the 2,000member Confederation of Truckers Association of the Philippines, said the changes did little to alleviate delays because haulers are restricted to certain routes and prohibited from returning empty containers during daytime hours.
Daily truck trips to the port of Manila have fallen to as low as 3,500 from about 6,000 before Estrada's order, Suansing said. One round trip from the garage to the port to the importer and back can take two days or more, he said.
Importers and exporters are bracing for higher charges from shippers, port operators and truckers.
"That's a triple whammy for the consumer," Suansing said.
The impact of the trucking slow down can best be seen at the Manila port facility run by ICTSI, the company led by Enrique Razon, the Philippines' thirdrichest person with a net worth of $5.6 billion, according the Bloomberg Billionaires Index.
The terminal, which handles 65 percent of Manila's cargo, is operating at more than 90 percent of its capacity, Gonzalez said. It doesn't usually exceed 60 percent this time of year.
If conditions persist, ICTSI will consider diverting some containers to a 21hectare facility about 50 kilometers (31 miles) from Manila, in Laguna province, he said.
ICTSI handled 3.79 million TEUs in Asia last year, 17 percent more than the previous year. The region accounted for 60 percent of the company's volume.
This month, a unit of the company won a contract to build and operate a $513 million container port in Melbourne. ICTSI is also one of six groups bidding for a 67 percent stake in Greece's Piraeus port.
"Continued global expansion and organic growth provide a long-term positive outlook for the company,"
George Ching, an analyst at Manila based COL Financial Group Inc., said in a phone interview. "It will probably be the economy that will suffer the most" from the truck ban, he said.
Source: Manila Bulletin, 14 May 2014
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