22 September 2018

Published also in Business Mirror

THE Philippines should follow the success of other countries in developing strong export clusters centered near hub seaports in a bid to become a major exporting nation.

A policy brief on Philippine seaports and shipping published by The Arangkada Philippines Project (TAPP) cited as an example of a potential cluster in the Philippines the shipbuilding and ship repair based in Subic.

It said there are three shipyards in the area, with proximity to the Clark airport and Subic seaport.

The paper noted that Clark-Subic-Tarlac-Pampanga-Zambales region has other potential clusters, such as mango production in Zambales, which could develop into a robust trading hub, bringing more frequent ship visits into the area.

Aside from Clark-Tarlac-Subic Corridor, the paper cited other ports and airports where the country could build strategic regional clusters, namely, Batangas, Cebu, Coron and Aklan, Davao, Phividec in Cagayan de Oro, Leyte, and Sarangani and General Santos.

While Cebu has many opportunities for clusters in the furniture industry, it pointed out that furniture manufacturers are spread around the city and could be consolidated into a planned area near a new modern port.

“Airport, port and logistics infrastructure in various regional cluster areas should be developed to address the need of each kind of goods and its trade traffic,” it said. “Most important, the cluster by its nature must aim to scale up, to lower costs, produce larger volumes, attract larger ships, and lower costs to become competitive in global markets.”

The paper also underscored the need to provide competitive incentives, including fiscal, which will attract domestic and foreign exporters to locate in selected product clusters.

The paper listed Philippine principal exports that the regional leadership can study to look for potential cluster expansion, including electronic products, other manufactured goods, machinery and transport equipment, woodcrafts and furniture, ignition wiring sets, chemicals, articles of apparel, other mineral products, metal components and coconut oil.

It said Thailand offers a successful model of industrial clustering.

“The quality of port infrastructure, port efficiency and hub port connectivity to feeder ports need considerable improvement. The cost to export should be more competitive and excessive fees imposed by foreign shippers should be regulated,” it noted.

The paper further said ports have been an important part of the country’s economic activity.

“Increasing global trade presents immense opportunity for Philippine ports to scale up to become more significant in intra-regional trade. Intra-Asia trade is growing strongly and becoming more important than TransPacific and Asia-Europe shipping,” it added.

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