President Rodrigo Duterte’s directive to government agencies to honor contracts is timely for the local port and logistics business which, according to a World Bank study, has declined in terms of global competitiveness.
The WB’s Logistic Performance Index biennial report, entitled “Connecting to Compete 2016: Trade Logistics in the Global Economy,” noted that the Philippines fell 14 places this year to 71st place out of 160 countries from 57th in 2014.
The country scored 2.89 this year, a huge decline since 2010 when it scored 3.14 and ranked 44th.
The report ranks countries based on key criteria of logistics performance, including border clearance efficiency, infrastructure quality, timeliness of shipments, ease of arranging competitively priced shipments, competence and quality of logistics services, and ability to track and trace consignments.
Port stakeholders have complained against a series of Bureau of Customs directives since last year as they introduced uncertainties to live contracts with the Philippine Ports Authority.
The BoC memorandums encroached on the PPA’s regulatory authority in licensing port operators and which port stakeholders also considered as a midstream change in rules.
“Logistics performance depends on the availability to traders of reliable supply chains and predictable service delivery,” according to the WB report.
The Philippines’ score in the WB report dropped in all criteria, except in timeliness of shipments, which jumped to 70th this year from 90th in 2014.
The survey showed that on the criteria involving customs services, the country’s ranking dropped drastically.
In the efficiency of the clearance process that included speed, simplicity, and predictability of formalities by border control agencies including customs, the Philippines’s ranking declined to 78th place from 47th in 2014.
For the quality of trade- and transport-related infrastructure like ports, railroads, roads, information technology, the country decelerated to 82nd from 75th previously, and declined to 60th place from 35th in the ease of arranging competitively priced shipments criteria.
For competence and quality of logistics services from transport operators and customs brokers, the country slipped to 77th from 61st.
It also dropped to 73rd from 64th on the ability to track and trace consignments.
“The LPI plays an important role in raising awareness, and is often the starting point of a policy dialogue,” Daniel Saslavsky, trade specialist and co-author of the report, said.
For the second time in a row, Germany is the top performer with a score of 4.23, while Syria ranked last with 1.6.
In the Association of Southeast Asian Nations, the Philippines placed seventh, with Singapore in the top rank.
Singapore overall ranked fifth in the LPI survey. Only two Asean economies improved this year—Cambodia at 73rd from 83rd and Myanmar at 113th from 145th. Others all fell in ranking with Malaysia down to 32nd (from 25th), Thailand 45th (35th), Indonesia 63rd (53rd), Vietnam 64th (48th), while Brunei, which is new to the survey, ranked 70th.
