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Firms risk losses, higher costs due to truck ban

By: - Reporter / @amyremoINQ
/ 12:17 AM February 28, 2014

The Semiconductor and Electronics Industries in the Philippines Inc. (Seipi) has joined the clamor to lift the truck ban ordinance in Manila as its member companies are now at risk of incurring facility line shutdowns, higher storage costs, and huge revenue losses.

Seipi on Thursday said in a statement that Malacañang should step in as the daytime truck ban, meant to decongest the streets of Manila during the daytime, had taken its toll not only on the truck operators but also on multinational companies dependent on day-to-day shipments and delivery.

One of the industries badly affected by the ban is the semiconductor and electronics sector, which is a major user of Manila ports, Seipi said.


The ordinance resulted in “a prolonged strike of three major truck associations and, for every day of delay, member companies of Seipi face the risk of line shutdown if materials don’t arrive on time. This means sending the operators home as there is nothing to work on anyway,” Seipi explained.

The companies also face “higher storage costs because, the longer the materials stay in port, more charges are incurred [as well as] loss of sales because committed delivery dates to clients are not met. One company’s production amount per day is around $90,000. If they have no material to run, this will translate to a huge loss.”

Apart from the prolonged strike and the truck ban ordinance, the simultaneous road projects in Metro Manila that will begin this March and end in 2016 also pose a threat to the daily operations of Seipi member companies.

“While these road infrastructure projects would relieve heavy traffic and, in the long run, benefit the country, inefficient scheduling and planning could worsen road congestions, affecting not only private citizens but businesses, too,” the group noted.

The semiconductor and electronics industry ended 2013 with a 5 percent contraction to $21.82 billion, a continuous annual decline from its highest level of $31 billion in 2010. For 2014, the industry projects a modest growth of only 5 percent.

The Makati Business Club meanwhile noted that while the city of Manila strives to address its serious traffic problems, it is necessary that an appropriate balance be attained between relieving congestion and facilitating the free flow of goods through the city.

“Solving this challenge requires a coordinated effort from both public and private spheres. In this context, we welcome the initiative of the Office of the Cabinet Secretary to convene pertinent government agencies to facilitate dialogue between the government of Manila and other stakeholders. With this mechanism in place and taking note that further delay in resolving this issue will result in adverse effects to the country’s economic performance, we call on the government to ensure that a fair solution will be reached at the soonest possible time,” MBC said in a separate statement.

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TAGS: Business, daytime truck ban, Manila, Seipi, semiconductor and electronics industries
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