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Economy

Congestion at Manila port has businesses sweating

Manila's usually busy port has been plunged into chaos by a partial ban on truck traffic.

Manila's move to place a partial ban on truck traffic earlier this year is having dire consequences at one of the Philippines' most important ports, as domestic and foreign businesses watch their goods gather dust at the docks.

     Citing concerns over congestion, Manila Mayor Joseph Estrada put a daytime truck ban into place in February that has been keeping the vehicles off roads serving the port except at night. The resulting bottleneck has led to a pileup at the Port of Manila and left ships waiting offshore, unable to dock.

     "There is a severe state of disorder at the port," laments an official from a Japanese logistics company. "Even if the traffic restrictions are lifted, things won't return to normal right away."

     Citigroup estimates the economic fallout from the truck ban could rise to 320 billion pesos ($7.31 billion), according to a report in the Philippine Daily Inquirer, a local newspaper.

     While the Philippines has enjoyed the most robust growth of any member of the Association of Southeast Asian Nations, gross domestic product expansion for the January-March quarter undershot forecasts at 5.7%. As a chamber of commerce official notes, April-June growth could be even lower if the chaos at the port continues.

     Logistics companies are finding ways to cope, including by relying on alternative ports. Such major Japanese shippers as Nippon Yusen and Mitsui O.S.K. Lines have switched their Philippine port to nearby Batangas.

     Since June, Nippon Yusen has been operating a shipping service between Taiwan's Kaohsiung and the Philippines that relies on smaller vessels less prone to delays. And Mitsui O.S.K. has this month readied a special vessel to retrieve empty containers accumulated at Manila docks.

     Should the problems persist, foreign companies could be less inclined to do business in the Philippines. That the national government has been unable to rein in the mayor of Manila -- a former president who served time in prison for corruption -- despite the risk of grave economic ramifications points strongly to a problem of governance. But inadequate road and other infrastructure also lies at the heart of the crisis.

 

 

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