By Catherine N. Pillas
The next administration should maintain public spending on infrastructure at 5 percent of GDP to improve the country’s logicstics sector and fast-track economic development, according to proponents of the National Logistics Plan.
Dr. Enrico L. Basilio, chief of party for the United States Agency for International Development’s (USAID) Advancing Philippine Competitiveness (Compete) Project, said the next administration should not deviate the from the current administration’s goal for public infrastructure.
“We estimate public-infrastructure investments to be at P5.73 trillion. Since 2010, we’ve already increased spending from 2 percent of the national income to 5 percent,” Basilio said.
In particular, P706 billion should be allocated for the development and paving of local roads, as the Department of Public Works and Highways has estimated that only 30 percent of the country’s total roads are paved.
Basilio said the paving of local roads falls under the jurisdiction of the local government unit (LGU) and relies on the LGU’s internal revenue allotment.
The USAID is in partnership with the Department of Trade and Industry’s Supply Chain and Logistics Management division to develop the logistics road map, the draft of which was presented to the public on Thursday.
“We are looking now on the integration and cross-cutting issues of the DTI’s various industry road maps like logistics, e-commerce and quality infrastructure,” Ceferino S. Rodolfo, trade undersecretary for Industry Development and Trade Policy, said.
These cross-cutting issues are challenges faced by the three broad sectors that make up the Department of Trade and Industry’s comprehensive framework for industrial development—manufacturing, services, and agribusiness, mining and fishery.
The National Logistics plan aims to address the gaps in supply-chain integration for goods and services by identifying the challenges faced in land, maritime and aviation transportation. The plan details key recommendations in regulation, institutional capacity, policies and infrastructure.
According to the draft plan, a “clear constraint” holding back the growth of passenger and cargo volume traffic is the capacity of Philippine airports. Most major and secondary airports are working over its installed capacity and there is a slow rollout of new airport projects.
On maritime issues, authors of the plan said the expansion and modernization of international ports must be continued and that the private sector must be encouraged to participate in the development of domestic ports in Cebu, Iloilo, Davao and Zamboanga.
According to Trade Assistant Secretary for Industry Development Rafaelita Aldaba, the agency has already identified Logistics and Infrastructure as a priority sector under its recently released Comprehensive National Industrial Strategy (CNIS). The CNIS is considered the main blueprint for the country’s industrial development.
“There is a need to align the logistics sector with the CNIS as this is an enabler for the entire economy. In the CNIS, we’ve identified infrastructure and logistics as one of the big five industries being prioritized for development to drive investments and job creation,” Aldaba said.
Moreover, the country’s “disjointed” logistics sector has widely affected local industries’ ability to participate in global value chains and regional production network since multinational companies expect speed and efficiency in transportation of goods and services throughout the supply chain.
“The more advanced global value chains are characterized by fast and high-frequency transactions usually in machinery industries rather than slow less coordinated transactions usually found in garments and food processing where we are now. If we are to achieve our goal to be an auto or an electrical machinery hub, logistics is crucial,” Aldaba said.
The DTI and the USAID hopes to finalize the National Logistics Plan covering 2016-2022 by September.