Factory cluster should be built near ports

MANILA, Philippines — A shipping leader has asked the Department of Trade and Industry (DTI) to build manufacturing clusters in areas proximate to ports like Batangas and Subic to ensure that they become part of the global supply chain.

A. Magsaysay Inc. president and CEO Doris Magsaysay-Ho said the DTI should put up industry clusters in areas where there are ports nearby.

Ho said investments made by logistics giants like International Container Terminal Services Inc. and Asian Terminals Inc. have increased the capacity of ports nationwide.

However, Ho said ports could gain their full potential if the DTI attracts an ecosystem of suppliers serving more than just one customer.

She said the DTI should make it enticing for firms to invest in production by dangling fiscal and non-fiscal incentives.

In doing this, Ho said the government could achieve the economies of scale that could lower logistics and shipping costs to the benefit of manufacturers. At the end of it, consumers will benefit given that retail prices will also go down.

As such, the shipping leader asked Trade Secretary Alfredo Pascual to pilot his idea of industry clusters in areas like Batangas, Cagayan de Oro and Subic where ports are just nearby.

“We are really excited about his idea to create industry clusters because the most important part about trade, the most important impact on cost of transport is scale,” Ho said.

“Further, it is important for the government to acknowledge that shipping and logistics are crucial infrastructure needed for the country’s development and are not impediments,” she said.

Likewise, Ho said the full potential of ports should be unlocked to scale up economic activities in archipelagic countries like the Philippines.

By situating industries near ports, trade volume will go up with the cost and time of moving goods and services around decreased.

The DTI wants to put up three industry clusters to improve the output of the economy. These industry clusters are: the industrial, manufacturing and transportation; technology, media and telecommunications; and health and life sciences.

In previous speeches, Pascual said industry clusters would be set up in locations where there is potential for them to grow at an exponential rate.