Philippines Logistics Industry on the Rise with Government Support

MANILA, Philippines - Feb. 13, 2023 - PRLog -- Manila, Philippines - The logistics market in the Philippines is experiencing rapid growth due to the rising trend of globalization. Despite being less mature compared to its Asian neighbors such as Singapore and Malaysia, the Philippines logistics market has a high potential for foreign investors. The nation's economy has provided a boost to the logistics sector, resulting in an increased demand for efficient distribution channels.

The Philippine logistics market revenue grew from USD 11.4 billion in 2017 to USD 11.8 billion in 2020. The industry has seen an average growth of 7-8% year-on-year during the same period, but saw a steep decline of -13.23% in 2020 due to the pandemic. However, the market is expected to recover in 2021 and 2022 as economies around the world are settling down and trade is picking up.

Road freight continues to dominate the Philippines logistics market, with Maritime transport being a crucial means of connecting the various islands of the Philippines and facilitating the mobility of commodities and people. The modernization and redevelopment of North Harbor have the potential to be a significant catalyst in the country's domestic commerce. The road freight market is dominated by Medium Fleet Owners, who account for 45-50% of all fleets.

To improve transportation infrastructure, the Philippine government established the "Build, Build, Build" program with a budget of USD 177 billion to spend on new infrastructure. However, the country is still ranked 96th out of 141 countries in terms of infrastructure quality by the World Economic Forum.

The cost of logistics in the Philippines is one of the highest in ASEAN, with logistics costs accounting for about 27% of sales of manufacturing firms in the Philippines in 2017, according to a policy brief by the International Finance Corporation.

To resolve the country's mounting infrastructure challenges, the Duterte Administration launched the ambitious "Build, Build, Build" (BBB) program in 2017, with an initial allocation of USD 48 billion for 75 projects. The government is also increasing inter-island connectivity through RORO facilities, which have become increasingly popular due to the reduced time and cost savings of nearly 30%.

In conclusion, the Philippines logistics market is experiencing growth due to globalization, with the potential for further growth in the future. The government's "Build, Build, Build" program and initiatives to increase inter-island connectivity will play a crucial role in improving the country's transportation infrastructure and enhancing the competitiveness of the logistics market.

Find out more:- Philippines Logistics and Freight Forwarding Industry Future Outlook to 2027 (https://www.makreo.com/report/philippines-logistics-and-f...)

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