* My column in BusinessWorld last Thursday, July 18, 2019.
Last Monday, upon the invitation of the Department of
Trade and Industry (DTI), I attended the 2nd Logistics Services Conference and
Exhibition at the Philippine International Convention Center. I was invited as
media and I attended the press conference led by Department of Trade and
Industry (DTI) Secretary Ramon Lopez, flanked by leaders of various private
industry associations and government officials from the Philippine Economic
Zone Authority, the Technical Education and Skills Development Authority (TESDA),
the Export development Council the International Finance Corp. ), and the DTI.
I am unfamiliar with the major issues of this sector,
hence my curiosity about the conference. I was also intrigued by the World
Bank’s Logistics Performance Index (LPI) so I checked that biennial report. The
index is composed of six factors — Customs, Infrastructure, International
shipments, Logistics quality and competence, Tracking and tracing, and
Timeliness.
I extracted from the Excel database the numbers for major
Asian economies for the years 2010, 2014, and the latest report 2018. Germany
is included in this list because it is the consistent No. 1. The Philippines
has a bad trend — a declining score and declining global rank out of 160
countries and jurisdictions covered. In particular, its rank in Customs has
fallen from 47th in 2014 to 85th in 2018. The good news is that its rank in
infrastructure has somehow improved (see Table).
I know Secretary Mon Lopez — we are both members of the
UP School of Economics Alumni Association and I spoke with him a few times. I
know that he is solutions-oriented as the private sector and business
competition had been his home for many years before joining the DTI.
Listening to him and many other speakers at the press
conference, I was surprised that while it was the DTI that led this conference,
many of the issues that cause headaches to players in the sector are outside
the mandate and core concerns of DTI. Like lack of drivers for trucks,
forklifts and heavy equipment (TESDA training), port congestion (Customs
bureau, Department of Finance), truck ban and numbers coding ban (Metropolitan
Manila Development Authority), long period to get vehicle franchises (Land
Transportation Franchising and Regulatory Board, Department of Transportation),
etc.
During the open forum, I asked if the advocacies by
various stakeholders cover the wider macro-economic and intra-industry reforms
like airlines and shipping lines liberalization, seaports and airports
modernization, tollroads expansion nationwide. Secretary Mon said they do, that
the administration’s Build, Build, Build programs address these infrastructure
challenges, and investment liberalization measures are being advanced.
My impression now is that the DTI has become a sort of
intermediary for many government agencies that tend to over-bureaucratize
logistics players like truckers, freight forwarders, cargo handlers, airlines
and shipping lines, to temper their itch to demand too many requirements and
simplify these instead.
This should extend to infrastructure development. Too
many permits and requirements — from local governments to various national
agencies — to build or expand seaports, airports, tollways, power plants, dams
and water sources, etc.
The goal of policy reforms should be the betterment of
the consumers. More goods and services at lower cost and prices, reduced waste
due to faster mobility of commodities from manufacturers and traders to end-users.
Less government bureaucracies and more private competition, these will favour
the consumers. Happy to see the DTI leading this.
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See also:
BWorld 347, Inflation and TNVS costs, July 11, 2019
BWorld 349, Solar Para sa Politika, Part 3, July 18, 2019
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