PH to gain from rise in maritime activity

Philexport sees shift in global trade to Asia

By Riza T. Olchondra
Philippine Daily Inquirer

3:00 am | Monday, February 25th, 2013

The Philippines stands to gain from the rise in maritime activity and investments at the Singapore basin as global trade continues to shift to Asia, the Philippine Exporters Confederation Inc. (Philexport) said over the weekend.

Citing a presentation made by Anthonie Versluis, a managing partner at Roland Berger Strategy Consultants, Philexport said that by 2025, shipping activity in the Singapore basin could be two to three times its present size due to infrastructure investments in the area and the basin’s growing importance as a trade corridor.

By then, the Asean (Association of Southeast Asian Nations) Economic Community is expected to be in full swing as intra- and extra-regional trades gain momentum.

The Singapore basin is an important hub for cargo flows given its strategic location and the strong growth seen in Southeast Asia.

The basin is situated on the main East-West trade route. It is at the natural mid-point distance between two key growth markets—India and China—and is at the crossroads of the Middle East and the American West Coast.

It is also a vital sea lane that can boost intra-regional trade among members of the Asean.

Philexport said the center of world trade is switching to Asia as it strengthens its position as the world’s most populous region, the largest economic zone, and the biggest consumption zone. It is also home to majority of the world’s middle class.

The movement of trade eastward is seen to boost maritime activity in the Singapore basin, changing its landscape in the coming decade. The planned and ongoing infrastructure projects in the basin will also be a big help in facilitating trade flow by raising capacity and improving efficiency.

“Singapore aims to consolidate all of its container shipping terminals in Tuas, almost doubling port capacity per annum,” Versluis said.

Malaysia, on the other hand, is planning an “aggressive expansion” of the Port of Tanjung Pelepas, while Indonesia is working to complete its deepwater container port of Tanjung Sauh.

Versluis identifies four main drivers of maritime trade in the basin: growth in intra-Asean trade that will be further spurred by the full tariff reduction in 2015; increasing trade between China and India; a robust economic growth of 5 percent to 6 percent yearly for Asean in the next five years; and cargo demand shifting to liquids due to consumption demand from China.