Easing inflation proof of lower logistics costs – PPA

MANILA, Philippines — Logistics costs in the country have gone down and is now being felt by consumers, and the Philippine Ports Authority (PPA) is hoping to sustain this for the long term.

In a statement, the PPA said it plans to keep the downward trend in logistics costs to help reduce market prices of basic goods, hoping to emulate what happened in August.

Inflation, or the general increase in commodity prices, slowed to 3.3 percent in August, from 4.4 percent in July, which was the highest for the year.

The Philippine Statistics Authority (PSA) attributed the decline in inflation to the slower annual increase in food prices and reduction in transport rates.

The PSA said transport inflation was cut by 0.2 percent in August, from a spike of 3.6 percent in July.

The PPA said it has managed to slash logistics costs by avoiding port congestion and speeding up the flow of goods. This way, goods are delivered from ports to markets on time, leaving no room for price speculation and supply shortage.

“The reduction in congestion allowed for quicker delivery times and reduced fuel consumption, [and] steady port tariffs helped create a more predictable cost structure for businesses reliant on imports and exports,” the PPA said.

The PPA warned that external factors from geopolitical conflicts to supply issues might get in the way of efforts to mitigate cost spikes.

“Global uncertainties — such as supply chain disruptions, fluctuating fuel prices and geopolitical tensions — could potentially reverse this trend,” the PPA said.

The PPA also reported that importers withdrew around 300 containers of rice from the Port of Manila from Sept. 21 to 23. Prior to this, the agency refuted claims that the facility is suffering from congestion, preventing rice prices from going down at a quicker pace.

PPA general manager Jay Santiago went as far as exposing that about 900 containers of rice were stuck at the Manila International Container Terminal and the Manila South Harbor.

He noted that the shipments have been staying at the port for over 20 days now.

Santiago is worried that the rice imports are being held at the port to cause an artificial shortage, which would lead to higher prices of the staple.

Based on estimates from the Department of Agriculture, the rice shipments waiting to be picked up from the Port of Manila have reached 23,000 metric tons.