The Philippines is also experiencing a logistics investment wave

Yang Ming has announced it will add a new 11,000 TEU container vessel to THE Alliance’s PS6 trans-Pacific service.

With all the attention given to the dynamic economies of South East Asia such as Vietnam, Thailand, Malaysia, and Indonesia the Philippines tends to get forgotten. 

Yet the Philippines has considerable potential for exploiting the shift in production activities away from China. It has a large, if relatively unskilled, workforce and an existing electronics assembly sector of some importance. The opportunities for logistics investment are considerable.

A good example is a large new port project that has just been launched. The Philippines-based International Container Terminal Services, or ‘ICTSI’, announced in May that it had commenced planning a new international container terminal in Bauan in southern Luzon. It aims to be the second largest terminal in the country after the Manila International Container Terminal, with 900 meters of quay, at least eight ship-to-shore gantry cranes, and an estimated capacity of over two million TEUs per annum. ICTSI says that the terminal will have “unencumbered access to Southern Luzon’s expressways”. The project is scheduled to start in 2025 and is estimated to cost US$800m.

There are also rumors that the Indian port company Adani Group is seeking to build a terminal in Bataan, although there seems to be confusion over how realistic these plans are.

At a more prosaic level, the Philippines government has also just announced a program of port expansion for agricultural products, designed to support food imports for its growing population. Earlier in the year it revealed a new project for a large deep-water agri-bulk terminal in Northern Mindanao and the most recent initiative suggests it is looking to build 17 of such facilities. The issue of food costs is politically sensitive in the Philippines and the government is looking to improve the functioning of the food supply chain.

The logistics developments across Southeast Asia reflect both the growth in globally positioned assembly operations and the increase in domestic consumer demand in the economies. Although the large port developments may grab the headlines, there has also been a steady expansion in road building in countries such as the Philippines and Indonesia. This is amplifying the opportunities for warehousing and contract logistics-related infrastructure.

Author: Thomas Cullen

Source: Ti Insight

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