Shipping CEO asks DTI to build industry clusters with ports in mind

Published December 7, 2022, 5:15 PM

by Bernie Cahiles-Magkilat

The chief executive of a leading Philippine shipping company is proposing industry clusters built with ports in mind, saying current economic zones had been created with little regard for their proximity or remoteness from shipping ports.

Doris Magsaysay-Ho, president and CEO of the country’s leading shipping firm Magsaysay Group of Companies, said in a presentation “Portropolis” at the 2022 Logistics Forum hosted by the Anti Red Tape Authority last Nov. 9 that the Department of Trade and Industry (DTI) could adjust its plans to develop industry clusters that would bring economies of scale.

Magsaysay-Ho said ports, while already highly developed through heavy investments from companies like International Container Services Inc (ICTSI), could further reach their full potential if the DTI attract an ecosystem of suppliers serving more than one customer; create opportunities to invest in production as part of the supply and value chain; and achieve economies of scale that will lead to lower shipping and logistics costs.

Trade and Industry Secretary Alfredo Pascual, according to Magsaysay-Ho, “has talked about clusters.” “We’re really excited about his idea to create clusters because the most important part about trade, the most important impact on cost of transport is scale,” she said.

Magsaysay-Ho added that while international ports operated by ICTSI and Asian Terminals Inc. (ATI) in Batangas and Subic are already contributing “valuable revenue to the government,” a “whole-of-government” was necessary to fulfill the full potential of Philippine ports.

Port operations are especially crucial for an archipelagic country like the Philippines, Magsaysay-Ho said.

“It is important for the government to acknowledge that shipping and logistics are crucial infrastructure needed for the country’s development and are not impediments,” she said.

The DTI plan to build industry clusters could address the smallness of Philippine trade volume, which keeps mother ships away from Philippine ports, according to Magsaysay-Ho.

She said ports in Batangas, Subic, Cagayan de Oro can serve as pilot areas for the industry clusters with some of these becoming economic zones “with incentives to allow the production cluster to successfully compete.”