Holidays, trade and inclusive growth
When holidays result in the unnecessary hampering of trade transactions, it will have a significant impact on inclusive growth. Consider the holiday season that is now upon us.
From Dec. 24 to Jan. 5, there is only one working day: Dec. 29. There will hardly be any port-related activities because important offices like the Bureau of Customs (BOC), banks, shipping lines, and warehouses are generally closed. It should be highlighted that there is only one full working during this unprecedented holiday season’s 12-day period.
We previously cited port-related data that showed a 6-percentage point increase in port utilization over a two-day weekend, or a 3-percentage point increase per day.
This happened because the private firms did not move their goods at their normal weekday pace.
Assuming a 3-percentage point port utilization increase for only nine of the 12 days, port utilization will increase from 80 percent to 107 percent.
This will be worse than the 105 percent port utilization during the Manila truck ban when the resulting port congestion significantly disrupted economic activity.
According to the Joint House Committees on Transportation and Metro Manila Development, this congestion resulted in losses of P2.5 billion a day.
But when Secretary Rene Almendras took charge, port utilization decreased to 80 percent, as shown in the Dec. 21 statistics cited below.
However, because of the holidays from Dec. 24 to 29, trade decreased.
While shipments coming in from abroad continued, importers did not take out their goods. This resulted in port capacity utilization increasing by Dec. 29 from 81 percent to 87 percent for MICT and from 80 percent to 97 percent for the South Harbor.
If this trend continues for the coming holidays up to Jan. 4, utilization will further increase. Severe port congestion will be a curse we will feel again.
Responsible stakeholders
There are parts of the government and the private sector that are doing all they can to prevent this potential disaster.
The Philippine Ports Authority (PPA) and both private sector port operators for MICT and South Harbor are doing business on all weekdays and weekends except Christmas and New Year’s Day.
However, trade cannot proceed with only these entities open for business. All other stakeholders must work together for trade to continue.
Critical government agencies should likewise be open, even with just a skeletal force. Shipping lines and banks should do the same. Most importantly, importers and exporters should make arrangements with truckers, warehouse operators, and all the other appropriate private sector partners so that trade can continue at a pace faster than what we have seen in the last six days.
It is said that the Philippines has too many holidays.
This impacts inclusive growth to the extent that farmers and fisherfolk, as well as low-income laborers, have their livelihoods harmed by the lack of work, production and trade.
However, compensating measures can be implemented.
Overtime and special arrangements can be made for critical activities necessary for continued economic development.
Such a response should be made for the challenge now facing a potential worsening port congestion. Work stoppages, truck bans, and holidays planned for the coming Papal Visit and the Apec Summit can still continue.
But creative and extraordinary measures should be put into place to provide for exceptional situations such as the necessity of continuing international trade arrangements using our ports.
Unity needed
To face this challenge, it is necessary for the government and the private sector to unite in formulating and implementing plans that will overcome the challenges pose by holidays and special events.
We have to think out of the box for win-win solutions so that trade is not hampered on our way to inclusive growth.
(The author is chair of Agriwatch and former Secretary for Presidential Flagship Programs and Projects. For inquiries and suggestions, email [email protected] or telefax (02) 8522112).
Port Capacity Utilization (%)
| Manila International Container Terminal (MICT) | South Harbor | |
| Manila Truck Ban | 105% | 100% |
| December 22 | 81% | 80% |
| December 29 | 87% | 97% |
