Philippines slides in competitiveness of ports, logistics businesses

MANILA, Philippines - The marching order given by President Duterte to government agencies to honor contracts is seen to improve the global competitiveness of the country’s port and logistics businesses.

The country’s ranking in the Logistics Performance Index (LPI) of the World Bank plunged 14 places to 71st this year from 57th in 2014.

The WB report ranks 160 countries based on key criteria of logistics performance, including border clearance efficiency, infrastructure quality, timeliness of shipments, ease of arranging competitively priced shipments, competence and quality of logistics services, and ability to track and trace consignments.

The biennial report titled “Connecting to Compete 2016: Trade Logistics in the Global Economy” showed the Philippines scored 2.89 this year from 3.14 when it ranked 44th in 2010.

The Philippines’ score in the WB report dropped in all criteria except in timeliness of shipments, which jumped to 70th year from 90th in 2014.

The country’s ranking in customs services dropped drastically as it dropped to 78th place from 47th based on the efficiency of the clearance process that included speed, simplicity, and predictability of formalities by border control agencies including customs.

For the quality of trade- and transport-related infrastructure that is ports, railroads, roads, information technology, the country decelerated to 82nd from 75th. The country ranking in easing of arranging competitively priced shipments criteria, the rank of the Philippines also plunged to 35th from 60th.

The ranking of the Philippines slipped to 77th from 61st for competence and quality of logistics services including transport operators and customs brokers.

It also fell to 73rd from 64th on the ability to track and trace consignments.

“The LPI plays an important role in raising awareness, and is often the starting point of a policy dialogue,” said Daniel Saslavsky, trade specialist and co-author of the report.

Major players in the country have complained against a series of Bureau of Customs (BoC) directives since last year for having introduced uncertainties to live contracts with the Philippine Ports Authority (PPA).

The BoC directives encroached on the PPA’s regulatory authority in licensing port operators and which port stakeholders also considered as a midstream change in rules.

In the Association of Southeast Asian Nations (Asean), the Philippines placed seventh while Singapore ranked fifth in the survey. Only Cambodia at 73rd from 83rd and Myanmar at 113th from 145 managed to improved their rankings while Malaysia fell to 32nd from 25th, Thailand to 45th from 35th, Indonesia to 63rd from 53rd, Vietnam to 64th from 48th, while Brunei ranked 70th.

“Countries characterized by low logistics performance face high costs, not merely because of transportation costs but also because of unreliable supply chains, a major handicap in integrating and competing in global value chains,” the survey said.

Germany was the top performer for the second time in a row with a score of 4.23, while Syria ranked last with 1.6.

“Logistics performance both in international trade and domestically is central to the economic growth and competitiveness of countries, and the logistics sector is now recognized as one of the core pillars of economic development,” the WB added.