Interview: Dennis Uy
How can the local shipping industry capitalise on regional opportunities?
DENNIS UY: We see the economic integration of ASEAN as a major driver of growth for the local shipping industry. In this context, we believe it is high time for shipping companies to ramp up their efforts to modernise and build capacity to take advantage of the trade and other economic opportunities that the ASEAN Economic Community has started to bring in.
Shipping and logistics operators recognise the need to make the sector more competitive. With this in mind, in the third quarter of 2017 Chelsea Logistics launched an initial public offering (IPO) to enable the company to make further acquisitions and upgrades. The industry must improve in order to support the country’s economic growth. In 2016 the World Bank rated the Philippines’ overall logistics performance at 2.86 out of five points, behind Indonesia, an archipelago just like the Philippines, which scored 2.98. We are confident, however, that the sector will seize the growing opportunities in the local market to make the necessary investments and ensure local shipping companies compete regionally.
In which areas do you see a need for investment to overcome maritime infrastructure bottlenecks?
UY: The World Bank’s Logistics Performance Index offers an insightful assessment of the local shipping industry. In 2016 the Philippines’ logistics sector posted the worst performance in terms of the quality of trade and transport-related infrastructure. Its score in that area dropped to 2.55 from the 2.6 received in 2014.
The numbers highlight the need for the Philippines to build more ports, as well as to expand and upgrade the existing ones to ensure the continuing safety of maritime passengers and the timeliness of shipments. The country also needs a more efficient and transparent port operations systems by employing modern technologies. At the same time, the Philippines needs to invest in land transportation to ensure goods are moved out of our ports and delivered to the end of There is plenty of room for consolidation in the local shipping and logistics industry. At present, the country has more than 12,000 domestic merchant vessels operated by thousands of companies and individuals, according to data from the Maritime Industry Authority. We see the benefits of consolidation, as it would entice companies to come together to form more efficient operations and offer better quality service.
What are your expectations for additional listings on the Philippines Stock Exchange ?
UY: We consider the stock market to be an effective growth engine for businesses in the Philippines. The IPO of Phoenix Petroleum Philippines in 2007 fuelled its growth outside Mindanao, and made it the fastest growing oil company in the Philippines. We are encouraging more companies to explore the possibility of going public. At the same time, we are expecting our stock exchange to ensure greater access for entrepreneurs seeking to raise capital through its facilities.
What role do you see for the private sector in the development of infrastructure under the administration’s Build, Build, Build Programme ?
UY: Pushing forward, the government’s infrastructure programme requires multi-sectoral collaboration. While billions have been pledged in official development assistance, we see the private sector still playing a significant role in the Build, Build, Build Programme. For instance, construction firms are taking on infrastructure projects, making them high quality and sustainable. Logistics companies are efficiently moving construction materials and other goods, and property developers are building complementary structures and transforming idle lands into destinations that open up employment and business opportunities across the countryside.
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