Keynote Message of Secretary Ramon M. Lopez
1st Logistics Services Philippines Conference
6 December 2018, PICC, Pasay City

INTRODUCTION

Magandang umaga sa inyong lahat. Salamat, Usec. Rowel and all our partners. As you know, under his term, we are holding the first Logistics Philippines Summit. This really is for all you, stakeholders of the logistics sector. Palakpakan po natin si Usec. Barba.

We’re giving importance to your sector because you are the lifeblood of the economy. You determine the way we do business, in terms of reaching true competitiveness and efficiency which, as you know, has impact on the cost of doing business.

The usual issues at hand are inflation. Logistics is important keeping the prices low, because of the cost of transporting goods. I was asking some data on the ratio of logistics cost to total operations. And the Philippines is not the best, but not the lowest. We are now 27% of the total cost. By comparison, was it Thailand at 21%? It’s really important that we pay attention to this sector.

I’d like to thank all of you, because this is a busy season for all of you because of Christmas. There are many deliveries to make, and yet you are here. Thank you for lending us your time. We’re confident that your time here will be well spent because we will be tackling issues and challenges that are vital to our sector.

Speaking of holiday deliveries, we should give the logistics services providers a pat on the back for assuring that commodities for the Yuletide are well-secured and delivered. They make sure that there is an ample supply of goods in the market, be it Noche Buena items, basic commodities, or gift items for everyone.

Thankfully, we now have a better situation. You’ve heard that the inflation rate has gone down to 6%. I’m sure January – February, we’ll be seeing inflation rates below 5% already.

As I said, the logistics sector is the lifeblood of any business, and therefore the lifeblood of the economy. It is important, as it affects the overall profitability and cost of business. And for the country, it affects the competitiveness and efficiencies indices.

Undersecretary Barba has mentioned the various association and stakeholders present here today. So, really the intention is not just to have a conference but to drill down on the issues and challenges. Hopefully, we can come up with solutions as a sector. We aim to build a roadmap that we will not just put in a shelf. We want to tackle the challenges identified so we can improve our competitiveness ranking.

TRANSPORT, INFRASTRUCTURE, AND LOGISTICS SERVICES

We have also invited today, our partner in the logistics sector, the Department of Transportation. Salamat Asec. Perez for representing Sec. Tugade. We’re glad to have you on board, Asec. You’ll be part of the discussions later. I know it’s not just about services, but also our requirements for infrastructure.

The mandates of DTI and DOTr complement each other in terms of fostering growth of the logistics services sector. A good way to imagine this is by comparing our national economy as a functional human body. The arteries and veins that deliver blood represents the transport system and infrastructure, which is care of DOTr. Meanwhile, the blood that carries essential nutrients and runs through the veins represents the logistics services sector, which is promoted by DTI.

As I keep reiterating, a network of reliable transport system and infrastructure facilitates the flow of goods and services through an efficient logistics services. Moreover, a seamless, unobstructed flow of goods indicates the health of our national economy.

In other words, we have to remove all the blockages, the buildup of cholesterol in the veins. We should be taking more Lipitor to remove these blockages.

Kidding aside, those solutions that we need will be the Build Build Build, the government’s massive infrastructure program. There are 75 projects in the program, foremost of which are the NLEX-SLEX Connector Road that will ease up the congestion in EDSA; Tarlac-Pangasinan-La Union Expressway Project in Central Luzon; Metro Cebu Expressway; the Mindanao Logistics Infrastructure Network in Davao; the Laguna Lake Highway; the Matnog-Sta. Elena-Bulusan Road in Bicol; and many more. These are just examples.

DTI’S INITIATIVES

To ensure the competitiveness of the logistics services sector, DTI—through the Competitiveness Bureau—initiated a program called TRACK. T-R-A-C-K stands for Transforming the logistics services through Regulatory reform, Assurance of quality, Communication and capacity-building, and Knowledge management.

In the past months, we’ve achieved the following major results under the TRACK program.

• High international shipping costs – In the recent months, DTI has promptly acted on the complaints of traders regarding excessive fees imposed by foreign carriers. We have requested the Philippine Competition Commission (PCC) to look into the excessive and unreasonable charges imposed by foreign shipping lines to importers and exporters. This is amid the growing concerns of the business community about these surcharges, which continue to undermine the competitiveness of local industries.
• Empty container management – We continue to conduct dialogues with the truckers’ group, the container yard operators, and exporters regarding the issue of empty container management. We are closely monitoring the developments about this concern. We are closely working on this with the various sectors.
• Assurance of logistics quality – The DTI-CB initiated the drafting of the Philippine National Standard for Road Freight Transport (Logistics) in partnership with the Bureau of Philippine Standards (BPS) and German International Cooperation (GIZ). Last week, the Technical Working Group convened for the finalization of the Guidance Document. We hope to conclude this before the end of the year.

The transport and logistics sector is one of the 12 Industry Priorities under DTI’s Inclusive, Innovation-led Industrial Strategy (i³S). Via this strategy, DTI has been active in promoting the sector to attract investments and has initiated reforms to address reliability, high logistics cost, and customs procedures.

TRADING ACROSS BORDERS (TAB)

Finally, one of the areas that we’re focusing on is the trading across border indicator under the Doing Business Report published by the World Bank. A series of respondent’s group meetings are currently being conducted to validate the reforms undertaken to facilitate outbound and inbound flow of trade.

I am also pleased to note that we expect drastic improvements in logistics-related government transactions with the implementation of Republic Act 11032, or the Ease of Doing Business Act. As we reported before, we are finished with the Implementing Rules and Regulations and have submitted that to the Office of the President. We are just awaiting the appointment of the Director General for the soon to be established Anti-Red Tape Authority. Hopefully this can be done before the year ends.

We started with identifying permits, licenses, and accreditations that are deemed burdensome by logistics services providers (LSPs). The list will be submitted to the Anti-Red Tape Authority (ARTA) for review and appropriate action.

CONCLUSION

We are confident that we can achieve our mission of a developing a globally-competitive logistics services by institutionalizing reforms to provide a conducive business environment for LSPs. These efforts will result to an efficient and reliable logistics sector that will be beneficial to all stakeholders: the LSPs, the businesses, and consumers.

Through today’s conference, we are also confident that we can deepen the collaboration between the public and private sectors as part of our overall effort towards nation-building. Together, we will achieve our goal—as envisioned by President Rodrigo Roa Duterte—of empowering our countrymen wherein they can determine a better quality of life for themselves.

Thank you and wishing you a fruitful conference today. Mabuhay tayong lahat.