Pursue cluster development

THE Philippines is a maritime nation and yet our seaports and shipping are nowhere near its value in our logistical supply chain. The irony of it is that the Philippines is world-class when it comes to seafarers. Filipinos man cruise ships and freighters around the world and are recognized globally just as Filipino nurses and doctors are. The development of seaports and shipping are also linked to our exports. Ports follow trade but without exports, we will forever remain a consumer-driven economy.

The data do not lie: “80 percent of global trade by volume and over 70 percent by value is carried by sea.” But we chose two drivers, OFW remittances and the BPO industry. But as growth is slowing down in the BPO industry due to competition and costs, it may end up approximating the 4 to 5 percent growth rate of OFW remittances. This means it is urgent for the Duterte administration to recalibrate the economy to focus on agriculture and manufacturing. According to the World Bank (2017), the neglect of manufacturing and overly concentrating on the service industry boom was a “lost decade” for the Philippines. This can be gleaned from the trade imbalance we have today. Breaking down the 6.7 percent growth in 2017, one can see that it is made up of services (58 percent), industry (34 percent) and agriculture,

As has often been said, get agriculture into double-digit growth, and we alleviate the staggering 22 percent poverty rate and conquer rural Philippines. The limited agriculture we produce we export, and yet we are exporting 3 to 6 times less compared to the other members of the Asean 6 (Vietnam, Thailand, Malaysia, Singapore and Indonesia). The Philippines exported only a total of $63 billion and its export basket has not changed substantially in the past decade. We have in fact been running

ballooning to an average of $38.6 billion a year. What would this mean in terms of shipping? “Containers are entering ports full, while many are leaving empty.”

We already have OTOP, or One Town One Product; regional corridors have developed since the passage of the Local Government Code so we can actually put in place a regional cluster approach of development before federalism can gain a foothold. Then we can build production clusters around these ports and the radial approach would create new townships in these clusters. The policy issue brief of Arangkada Philippines is noteworthy in advocating for “building upon existing and emerging clusters, where competitive advantage and product or service differentiation already exists.” No need to reinvent the wheel, if only PRRD remains focused on what we already have and force the issue on cluster development. Doing so would get his federalism going instead of supporting childish pranks as freedom of speech that derailed the advocacy.

Stop the silos approach and pursue enterprise solutions. With just three years remaining, PRRD has to pursue strategic thinking, benchmark against the past and build those production centers alongside the ports. Arangkada already suggested the following ports and airports: Clark-TarlacSubic Corridor; Batangas; Cebu; Coron and Aklan; Davao; Cagayan de Oro; Leyte and Sarangani and General Santos.

Links among airport, port and logistics infrastructure in various regional cluster areas should be developed. When the Department of Transportation (DoTr) cancelled the development of regional airports for a very shallow reason, it closed the door to an important link; it would have been good if there was a well-developed port to cater to what they removed. Even Davao was taken out of the list and PRRD had to make “parinig” during the blessing of Mactan-Cebu International Airport Expansion.

Developments around ports actually started in 2003 under the Arroyo government but it went awry in 2010; the next phases were not considered by the Aquino government because it was the project of Arroyo. Remember the nautical highway? The Philippine Nautical Highway or the RoRo system was an integrated network of highway and vehicular ferry routes which forms the backbone of a nationwide vehicle transport system in the country. It was a system of roads and ports developed by the government to connect the three major islands. The 919-kilometer nautical highway was opened on April 12, 2003. Its route covered the provinces and cities of Tagaytay and Batangas City of the Calabarzon region, Marinduque, Romblon, Oriental Mindoro in Luzon; Iloilo, Guimaras, Negros Occidental and Negros Oriental, Siquijor, Cebu and Bohol in the Visayas; and Misamis Occidental, Misamis Oriental, Lanao del Norte and Dapitan City in Mindanao. The system reduced the previous usual travel time by 17 hours to the different key cities, enhancing the accessibility of the prime tourist destinations, and minimizing the handling expenses of goods, all over the country.

With port development comes shipbuilding and repair. In fact, the Philippines is the fourth largest shipbuilding country in the world, but much smaller than the top three: China, Japan and Korea. There are a total of 232 registered shipyards, shipbuilding and ship repair facilities in the country. Seven have the capacity to meet international standards: Hanjin Shipyard in Subic, Keppel Subic Shipyard, Subic Drydock, Keppel Batangas Shipyard, Herma Shipyard in Bataan, Tsuneishi Shipyard in Cebu and Mactan Shipyard Corporation, also in Cebu. If only we can get the bureaucracy behind port management streamlined, with less corruption and rent-seeking appointees.

Apart from shipbuilding, we unlock the potential of the country to be a home port for cruise tourism in the region. We just need the imprimatur of an angry leader to get cluster development done in the remaining three years of his term. It can be done if he pushes for it and then probably, people will realize, if you bring down development to such contiguous areas, their lives are made better.

We are a maritime nation. Our unique geographical location is our advantage. The future

chain management around it that could give manufacturing the needed impetus for countryside development: cold chain storage, packaging centers, factories and plants creating new centers of development, no longer in congested cities.

Mr. President, it’s time to shift from BPO and remittances and consumer-driven growth to something generic to us: agriculture and manufacturing. ”We cannot control the wind, but we can direct the sail.”

economic inequality continues to siphon income from the poor and middle class.

It’s also possible that the combination of slow economic growth, social unrest and aging populations will overwhelm post-World War 2 welfare states, forcing them to raise