2021 Agriculture story
PART 1: GLOBAL SHIPMENT WOES: ADDITIONAL SHOCKS TO PHL’S FOOD SUPPLY CHAIN
IT will take about a foot for a spoonful of food to reach the mouth; to reach the dining
table, it’s farther than that. Nearly 10,000 nautical miles: 9,629, to be exact. That is the
distance between the Port of Rotterdam, Europe’s largest seaport, and the Manila
International Container Terminal, the Philippines’ busiest port.
That is also the exact length it takes for a container of pork products from the world’s
top exporter of pork to arrive in the world’s ninth-biggest consumer of pork meat.
Vice versa, it’s also the same mileage that shipments of virgin coconut oil from the
Philippines, one of two of the world’s largest exporters, cover upon reaching Europe.
Prior to the pandemic year, it took about a month to a month and a half on average to
complete one delivery; either of pork from Europe to the Philippines, or coconut oil from
the Philippines to Europe. Today, it takes an eternity…of sorts.
The grounding of the Ever Given at the Suez Canal in March came at the worst time,
compounding the persisting global shipping problems that stemmed from
Covid-19-related lockdowns and problems that started late last year.
After certain economies, such as China and the United States, reopened their
economies in the latter part of 2020, global trade took one hellacious ride: lack of
shipping vessels and container imbalance.
SINCE most of the vessels and containers were docked in the West after global trade
was put on halt due to the health pandemic, importers and exporters had to scramble in
seeking to source their logistical needs.
The scrambling led from one problem to another; it has shaken industries and their
captains on how to thrive amid today’s uncertainties: delayed shipping arrivals and near
record-high freight costs.
For the Philippines, a country that is not considered a major trading port in the global
trade, these problems mean a myriad of headaches.
Royal Cargo Inc. Chief Operating Officer Jet B. Ambalada was straightforward about it:
the country is facing a “perfect storm.”
“We are facing shipping and logistics problems. For example in Europe, there are a lot
of delays due to Covid-19 problems and challenges such as lockdowns,” Ambalada told
the BusinessMirror. “We are now encountering two weeks to a month’s delays in our
He explained that the problem in the global shipping industry emerged last year when
the global economy ground to a halt as the virus risked those operating the gears of the
trade. Due to lockdown measures, the number of drivers and ship captains allowed to
work were pared down and vessels and containers were grounded in major ports like
those in Europe and the US.
Overwhelmed with orders
HOWEVER, when global trade gained a bit of momentum last year, the shipping
industry was overwhelmed with orders from developed countries like the US and China.
This resulted in a container imbalance. Countries that are not major shipping points or
routes, like the Philippines, were at the losing end, Ambalada told the BusinessMirror.
He added that container-turnaround is also delayed due to lack of drivers in Europe,
which is experiencing its third wave of Covid-19, with the spread of more transmissible
Ambalada said huge economies like China, Singapore and the US have been more
aggressive in terms of imports and exports, thus concerning the bulk of the available
vessels and containers in the world.
“The major problem is that our transshipment points are already congested. For
example, Singapore and China ports are congested since these countries are sourcing
a lot of raw materials,” he said.
DUE to this situation, shipping costs for exports have increased “10-fold” with outbound
shipments being delayed by a month to three months at worst, Ambalada pointed out.
He said the cost of shipping one dry container from Manila to the European Union has
ballooned to $5,000 from the usual $800 (about P38,424.40 at current exchange rates).
Shipping one 20-foot container from Manila to the US West Coast used to cost only
about a maximum of $1,000 (P48,030.50); it’s now hitting $5,000 (P240,152.50).
Inter-Asia shipping rates have also ballooned to unprecedented levels with the
Philippines to China route costing now as much as $2,000 from the usual $200, since
we are outside the “preferred routes” of shipping companies, Ambalada added.
“We are being outbidded by our neighbors who can afford $5,000. The question is, who
can bite the bullet among our exporters? Instead of catering to the Philippines, the
vessels will just go to China en route to Europe since they can pay higher,” he
Increase in shipping costs of importing goods from Europe and the US to the Philippines
“is not significant” since there are available containers and vessels from these areas,
Ambalada told the BusinessMirror.
He said they started to experience the problem in the last quarter of 2020 after countries like China started to buy more imports and were able to jump-start their economy again amid the pandemic; hence, exporting more goods than any other country.
FELIX Ishizuka, president and CEO of Reefer Filipinas Express Line Inc., said it is
undeniable that the industry was overwhelmed when demand surged in the latter half of last year.
“It is always supply and demand. Obviously, the demand went up and the container
supply is scarce in every port due to congestion,” Ishizuka added.
Also contributing to the delays, he said, are the rules of countries to quarantine cargo
and shipments in a bid to prevent the spread of Covid-19.
“China, for example, is getting heavy congestion for fresh produce. Normally they do not
quarantine these; but now every container must undergo a minimum of three days,”
Ishizuka said. “That is obviously going to pile up.”
He explained that the unavailability of space is felt across all segments of the shipping
industry from dry cargo containers, break bulk to reefers.
Ishizuka pointed out that the cost of renting a reefer ship has now skyrocketed to
$25,000 per day from the $9,000 per day to $10,000 per day recorded in June of last
“Freight cost is crazy right now; it is now at a level never seen before; never seen these
reefer ship prices in the last 15 years of the industry,” Ishizuka told the BusinessMirror.
“The most affected businesses are the small players who ship 5 containers at
He added that the cost of moving used cars from Japan to the West Coast, say South
America, is now at $5,000 per container from $1,000.
Uncertain that unloaded imported cargo would have an export replacement, importers
are now shouldering additional costs in the form of prepositioning fees, Ishizuka said.
Effect to consumers
CONSUMERS ultimately suffered, and still suffer, since rising freight costs and other
additional costs are just passed on to them, American Chamber of Commerce of the
Philippines Agribusiness Committee Co-Chairman Christopher A. Ilagan told the
“Generally speaking, the global shipping and/or logistics issues we face today affect the
cost effectiveness and efficiency of our supply chains,” Ilagan said. “The rising freight
costs ultimately put pressure on general consumer prices as these are often just passed
on to final consumers.”
He said some of their members “have been seeing delays in their imports and exports,
ranging from a few weeks to a few months,” forcing them to “create new ways of coping
with these realities.”
“One such coping mechanism comes in the form of building up of buffer stocks—with
clear implications on working capital and warehouse costs,” Ilagan told the
ILAGAN added they observed that another way of coping has to do with shippers
getting creative with inter-modal transport options. He cited as example: from the
traditional full reliance on ocean shipping from origin to destination, a shipper has
considered a mix of utilizing air freight to get to a transshipment site that can
accommodate a shorter delivery time to the final destination port via sea.
Ilagan said it is becoming “clear” that the fastest countries that would reach herd
immunity against Covid-19 would “emerge faster” in the new normal of global trade;
thus, reaping benefits of the global economic restart.
“Because of this uneven return to the ‘new normal,’ it wouldn’t be surprising that the
laggard countries may find themselves having difficulties coping with shipment and
logistics delays and elevated costs,” he told the BusinessMirror.
“The faster we can move to the ‘new normal’ in the Philippines, the faster the
Philippines can take advantage of the global economic restart,” Ilagan added.
THE global container imbalance and lack of vessels have caused shipments of meat
imports to arrive in about three to four months. This could derail the Duterte
government’s plan to bring in cheaper imported protein sources with its pork tariff
reduction and increase in the minimum access volume (MAV).
“We now are looking at three months to four months of arrival,” Meat Importers and
Traders Association (Mita) President Jesus C. Cham told the BusinessMirror. “There’s a
lot of congestion caused by Covid-19 pandemic. It has created an imbalance in trade
with containers going one way and the others returning without a back-load.”
Cham added that North America is also reeling from the impact of severe winters that
have slowed down the movement of people, trucks and cargoes in the West.
“We will know only of the additional charges when the cargo arrives; and they are
delayed. Upon arrival, we will see the destination charges,” he said.
“The CIF cost of a headless pork carcass has gone up to $3 per kilogram from $1.5 per
kilogram,” Cham added.
Cham warned that given the delays in shipments, the government’s pork-tariff reduction
to as low as 5 percent for in-quota volume and 15 percent for out-quota volume may not be maximized.
“Only the pre-ordered [batch] will benefit but the new orders may not, since it takes us
now at least three months for new orders,” Cham explained.
AMBALADA, who is also a director of the Philippine Association of Meat Processors
Inc., warned that the current shipping and logistics problem is worsened by the
challenge of sourcing raw materials for food manufacturers, like processors.
Furthermore, delays in arrival of imported goods may pose food security problems for
the country, he added.
For example, meat processors are now struggling to import mechanically deboned meat
of chicken since the country lost about 60 percent of its import source after the
government slapped temporary blanket bans on European countries over bird flu
concerns, Ambalada explained.
“This is really a perfect storm. If this won’t be eased or resolved, then we’re up for a
looming major food shortage. Take, for example, processed meat products,” he said.
“What will be our alternative protein source if we lose processed meat products or they
hike their prices amid rising pork and chicken retail prices?”
IN an exclusive interview with the BusinessMirror, a staff of the Philippine Coconut
Authority (PCA) said coconut oil (CNO) exporters are booking their shipments in
advance—about two weeks to a month before target shipment date—as a “stop-gap”
solution to the ongoing global container and vessel imbalance.
The person familiar with PCA operations pointed out that the impact of these problems
were “greatly noted” in July last year when the country’s CNO exports “dropped to its
lowest” at 7,863.15 metric tons (MT).
“With this problem, to be able to deliver the goods as per agreed contract, what our
exporters do is to book their shipment with the shippers in advance, two weeks to a
month before the target shipment date,” the person familiar with the PCA said.
The person said the PCA, an attached agency of the Department of Agriculture,
disclosed that the Department of Trade and Industry is already looking into the problem
and is looking to come up with a solution to mitigate the impact of the problems on one
of the country’s top agricultural exports.
According to the person familiar with the PCA, the trade and industry department’s
Committee on Logistics of the Export Development Council has been conducting
consultation meetings with the exporters, shipping and logistics companies to minimize
the impact of this problem to our exports.
“Advance booking is still the stop-gap solution at the moment,” the source at the PCA
told the BusinessMirror.
THE ongoing global logistical problem adds another problem to the country’s CNO
exports that have been suffering from supply problems in recent years.
In fact, Philippine Statistics Authority (PSA) data showed that the total value of the
country’s CNO exports last year declined by 9.1 percent to $846 million despite a
rebound in prices.
A Global Agricultural Information Network (GAIN) report projected that the country’s
CNO exports in market year 2021 to 2022 will continue to decline for the third straight
year due to “logistical problems from importing countries as a result of the Covid-19
The report noted that the country’s top markets for its CNO are Europe and the US,
which have been reeling from the impact of the global shipping problems.
The GAIN report, prepared by the US Department of Agriculture’s Foreign Agricultural
Service in Manila, estimated that CNO exports from October-to-September of next year
would decline to 875,000 MT from 925,000 MT recorded in the previous market year.
PHILIPPINE banana exporters are also reeling from rising shipping costs and shipment
delays, which they estimate may slash the country’s profit from the prized yellow fruit by
at least 15 percent.
Pilipino Banana Growers and Exporters Association (PBGEA) said the rising shipping
costs, brought about by the global shipping problem due to Covid-19-induced problems,
are further “eroding” the “already tight margins” of exporters in all markets.
PBGEA Chairman Alberto F. Bacani told the—their shipping costs have increased by 15
percent to 20 percent compared to last year’s average quotations.
For example, Bacani said the cost of shipping a container of bananas to Saudi Arabia
has risen to $3,000 from the usual quotation of $2,600 (about P124,879.30 at current
Due to this, Bacani noted that profits by the industry this year would be slashed by
“You can assume the same amount of the increase in shipping costs—about 15-percent
reduction,” Bacani, who is also the President and CEO of Unifrutti Tropical Philippines
Inc., told the BusinessMirror.
“With market prices generally staying the same year-on-year, the rise in shipping costs
have eroded the already tight margins of banana exporters in all markets,” he added.
WORSE, the rise in costs is coupled with shipping delays from Davao to the Middle
East, with shipments arriving within 30 days to 33 days—from the usual average of 25
days, Bacani told the BusinessMirror.
He further explained that the transit delay was caused by the “continued spillover effect
from the port congestions in China and Singapore that started at the end of 2020.”
The congestion, Bacani pointed out, caused feeder vessels to miss scheduled
connecting dates with the intended mother vessels in Singapore and Shekou.
“This congestion has affected all shipping lines from Davao since all of them rely on the
same feeder vessel service from Davao offered by CMA and RCL, meaning all banana
exporters from Davao are equally affected by the delayed transit time,” he said.
The increase in freight costs has put the Philippines in a tighter corner against its rising
Vietnamese and Cambodian competitors in securing market share in the growing
market that is China.
“Vietnam and Cambodia, given their proximity to China, are the last affected by these
increased freight costs, making their bananas even cheaper now versus Philippine
bananas compared to last year,” Bacani said.
Indeed, it appears it would take a long way for the Philippines to recover to a position of
strength in matters of logistics.
PART 2: SUPPLY STIFFNESS TO STAY AS SHIPMENT ISSUES SEEN SPILLING PAST YULE
SUPPLY constraints were already a given before the Ever Given blocked the Suez
Canal: lockdowns are to blame and exporters are seen to put up with the setback for a
long term. And merchants relying on revenues from sending goods out of the country’s
borders—nay, the whole economy itself have no other choice but to adjust operations
and hold on tight during this bumpy ride.
The Supply Chain Management Association of the Philippines (SCMAP) told the
BusinessMirror that the concern regarding shipment delays is not going away any time
“We have been told that these issues may persist even after the Christmas rush,” the
Philippine Exporters Confederation Inc. (Philexport) Assistant Vice President Flordeliza
C. Leong told the BusinessMirror that exporters started dealing with shipment delays in
the last quarter of 2020 when production began picking up anew.
While there is no conclusive report yet, Leong said that delays usually range from two
weeks to a month.
The bottlenecks were caused by the schedule changes, occasional vessel omissions
and increasing shipment rates, Leong’s group said.
“However, in recent months these issues have gotten worse, with shipping lines not
confirming space beyond contracted allocations and rates going up as high as three
times more, especially for long-haul shipments,” the group told the BusinessMirror.
LEONG explained that the delays are also being caused by the piling up of goods in the
shipping lines and the traffic going to the ports. In addition, she noted that ports have no regular operations at the moment and employees are working in shortened hours amid the pandemic, among others.
The Philexport official said that she already talked to traders and logistics service
providers to find solutions to the shipping delays. But it appears that the sector is on a
“There is nothing to do but to wait [if there is a shipping container already],” she
lamented. However, Leong said it may help if exporters consolidate their orders and
book early shipments.
ASIDE from export-oriented firms, importers have also experienced delays in
shipments, which are seen to impact manufacturing and, ergo, consumption of the
country, SCMAP Executive Director Corazon C. Curay told the BusinessMirror.
The shipments that are taking a longer time to deliver include raw materials; and
finished goods, which are usually purchased through e-commerce, Curay said. There
could also be potential shortage of stocks and price increases that the customers have
to deal with as a result, she added.
“For our end customers, this will result in products missing from shelves and higher
prices, which is not ideal considering our continued battle against Covid-19 and its
long-term economic impact,” SCMAP added.
But Leong said that it is fortunate that customers understand the shipping delays.
“The good thing about this is it is a global thing,” Leong said. “Alam din ng mga buyers
nila na this is happening.” [The buyers are aware of the situation.]
SOME importers manufacturing for exports are negotiating with their buyers to have a
longer turnaround period, she explained. If the buyers agree with the arrangement,
orders will not be cancelled anymore—and buyers are ready to deal with the delays as
In general, Philexport said that exporters have accepted that they have to adjust their
production timeline as no concrete and long-term solution is in place yet.
However, there are still concerns for perishable items, Leong noted, adding that air
shipment is usually the solution to make sure the products arrive fresh. This may not be
applicable to some nonperishable items as fees could be higher if ever, she said.
Leong, on the positive side, said that she has not encountered an exporter who decided
to cut production because of the shipment delays.
A garment exporter, the Philexport official, is even seeing continuous flow of orders from the US.
However, “they have to decline orders only because of order capacity, not because of
the shipping problem,” she added.
REPORTS from the BusinessMirror stated that shipping costs for exports have
Henry Basilio, chairman of the networking committee on transportation and logistics of
the Export Development Council (EDC), flagged in a recent statement the increasing
freight rates amid imbalances in the repositioning of empty containers.
Basilio noted that the cargo handling cost has doubled with the cranage fee amounting
to P1,587. This is on top of the arrastre fee of P1,575, Basilio said.
Cranage fee is the price paid for the use of cranes when loading and unloading ships.
Arrastre fee is charged for the handling, receiving and custody of shipments.
Basilio also noted that the proposed increase for out-of-gauge (OOG) cargo is 300
percent. OOG cargo refers to shipments that cannot fit into 6-sided shipping containers
because of their larger size.
Among Southeast Asian countries, standard OOG surcharge is only 50 percent based
on Association of International Shipping Lines tariff comparison, Basilio noted. An
exception is Tanjung Priok, the busiest Indonesian seaport.
“The proposed rates are exorbitant and will increase the cost of doing business, drive
away investors, and unduly burden existing manufacturing industries and export
companies,” he said. “While these intended charges are billable to the shipping lines,
this will directly impact the logistics cost and will ultimately be borne by the end
Meanwhile, Basilio expects the container imbalance to normalize this month amid
increased shipping logistics costs.
DESPITE the exorbitant rates, University of the Philippines Professor Emeritus
Epictetus E. Patalinghug believes the increase in these costs were mainly due to the
low volumes and a select few ocean shipping carriers that dominated the market. This
would not likely affect the country’s export winners.
According to the Philippine Statistics Authority (PSA), exports in January dipped by 5.2
percent to $5.49 billion from $5.79 billion for the same month last year.
Based on preliminary data from the PSA, the country’s top export remains to be
electronic products. This brought in $3.24 billion in earnings for the country and
accounted for 59.1 percent of the country’s exports in January 2021.
The commodity is also the country’s top import. PSA data showed imported electronic
products were valued at $2.34 billion or a share of 29.6 percent to the total imports in
But “because of low volume and despite excess capacity, shipping costs have increased
by 10 percent—due to the market power of the dominant few ocean shipping carriers.
Electronics exports can be shipped via air, they are not affected,” Patalinghug told the
FORMER dean of the School of Labor and Industrial Relations (Solair) Rene E. Ofreneo
shared Patalinghug’s view, saying that among electronic exports and imports, the top
product are semiconductors, particularly microchips, which can easily be transported.
“Pwede kasing isakay sa maleta [This can be transported through your luggage],”
Ofreneo explained to the BusinessMirror.
Based on the January data, semiconductors accounted for 43.2 percent of total exports.
This amounted to $2.37 billion in 2021, a 4.4-percent decline from the $2.48 billion
posted in the January 2020.
Ofreneo said it is reasonable to expect exports of goods shipped in bulk, such as
bananas, to sag.
To note, the country’s banana exports in January plunged 51 percent to 186,419.019
metric tons (MT), from last year’s 384,151.173 MT. PSA data earlier analyzed by the
BusinessMirror showed that the latest figure is the steepest decline in January banana
shipments since 2006.
Ofreneo added that bulky auto parts and electronics assemblies may also be affected
by the logistics nightmare.
Exports of other electronic products such as electronic data processing amounted to
$557.66 million while automotive electronics amounted to $8.06 million in January 2021
based on the PSA’s report. While electronic data processing saw a 24.4-percent growth
in January, automotive electronics suffered a 61.6-percent decline value.
TO ease the cargo traffic, the SCMAP said government agencies should still implement
the measures they placed in response last year.
“We also call for the continued enforcement of the Joint Administrative Order (JAO)
issued by various government agencies at the beginning of the pandemic to facilitate
movement of cargo from Manila’s ports,” Curay told the BusinessMirror.
The Department of Trade and Industry (DTI), along with several agencies, agreed to
release an order in April last year to decongest the ports of Manila to allow inbound
shipments of food, medicine and personal protective equipment. These government
agencies include Philippine Ports Authority (PPA), the Bureau of Customs, the
Department of Finance and the Department of Agriculture (DA).
Prior to this, the Inter-Agency Task Force (IATF) for the Management of Emerging
Infectious Diseases had instructed the PPA to remove the overstaying containers in the
ports to make way for incoming cargo containing essential goods.
Under the JAO, all cargo remaining beyond 30 days from discharge should be
withdrawn within five days from the effectivity date of the order. Containers scheduled to arrive after the issuance of order are required to be withdrawn 10 days from discharge.
The JAO also expedites customs clearance and streamline the process of applying for
import permits and clearances online.
“While these issues are out of our control due to its global nature, we believe our local
authorities can help reduce its impact,” Curay added. “The PPA and the Marina
[Maritime Industry Authority] must continue efforts to ensure sufficient capacity in ports
across the country, as well as improved efficiency.”
THE shipment delays may potentially cut the country’s export revenues this year.
“Definitely, the lockdown will affect our export target this year,” De La Salle University
(DLSU) Economist Maria Ella C. Oplas told the BusinessMirror.
According to the DTI, the goods and services exports were expected to drop by 14.7
percent to $80.5 billion in 2020 before growing by 12.4 percent to $90.5 billion this year.
Figures are anticipated to further rise by 14.8 percent to $103.9 billion in 2022, lower
than the earlier target of $130 billion as the pandemic severely impacted business
Oplas said shipment delays have affected the whole value chain. In addition, she noted
that manufacturing companies may need to slow down production because employees
cannot come to work, which meant fewer goods to be shipped out as well.
“It’s a domino effect on them,” she said.
On the demand side, the DLSU economist pointed out that orders from abroad could
have been fewer as well, as company-clients potentially scaled down their operations,
or worse, were forced to shutter.
Philexport’s Leong noted that shipment delays could also explain the lower export
revenues because the earnings will not be reflected immediately.
FOR the semiconductor sector, a major contributor to the Philippines’s export industry,
shipment delays usually take weeks.
Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi)
President Danilo C. Lachica told the BusinessMirror the industry’s supply chain has
been disrupted with the implementation of lockdowns.
Lachica noted that the reduced flights and ships have been causing bottleneck to the
shipments of semiconductor players.
But Seipi is not worried about not meeting the 7-percent growth forecast for this year.
Lachica said the Seipi has factored in this forecast.
Data from Seipi shows that electronics accounted for 65 percent of the total Philippine
exports in January. Exports for the segment inched up by 1.48 percent to $3.55 billion in
the first month of 2021 from $3.50 billion year-on-year, supported by growth in four
Medical and/or industrial instrumentation led the sector with 84.31-percent growth to
$22.99 million for the period. Consumer electronics, electronic data processing and
control and instrumentation, grew by 28.2 percent, 24.38 percent and 8.89 percent,
Meanwhile, automotive electronics declined by 61.64 percent; telecommunication, 27.24
percent; office equipment, 4.59 percent; components or devices, 4.37 percent; and,
communication or radar, 3.47 percent.
Last year, total electronic exports dropped by 8.8 percent to $39.67 billion from $43.39
The top destinations for Philippine electronics exports are China, Hong Kong, Japan,
Singapore and the United States of America.
Earlier, Trade Secretary Ramon M. Lopez said electronic exports were expected to
register further growth this year with the opening of more economies.
THE government recently extended the enhanced community quarantine (ECQ)
measure in the National Capital Region (NCR), Cavite, Rizal, Laguna and Bulacan for
another week or until April 11 amid surging Covid-19 cases.
While Seipi understands the rationale behind the move, Lachica said allowing full
occupancy of shuttle buses that follow the health protocols for the electronics sector
would be a big help.
“For electronics, allowing 100-percent occupancy for shuttle buses with plastic partitions
would help relieve the mounting costs,” he explained.
Lachica said the infections do not spread in such “clean shuttles,” even during an
upsurge of cases, because Covid-19 protocols are strictly enforced.
He noted the passengers wear face masks and face shields and are not allowed to talk,
eat or make phone calls. There are also disinfection and temperature checks, among
others, as safety measures.
“The pandemic affects the volume of exports and imports. Since our exports are
import-dependent, our net exports—exports less imports—will be down. On the other
hand, an import declining more than export declining means we have net dollar inflow
and is good for our balance of payments,” Patalinghug explained.
“Less trade volume, less shipping activities mean less port congestion. Less port
congestion means less logistics problems—there is excess capacity for logistics given
less goods to move to and from destinations and/or origins,” he added.
HOWEVER, despite the numbers, Patalinghug said the Philippines is still not an
export-oriented economy. This means that the country’s recovery from the recession will not depend on trade but on consumption.
Patalinghug said remittances from overseas Filipino workers (OFWs) and revenues
from business process outsourcing (BPO) matter more to the recovery. He noted that
despite the mobility restrictions and economies going into recession, earnings of these
sectors did not decline that much. As such, he said these can fuel domestic
consumption, which represents 72 percent of gross domestic product in Luzon,
determining the pace of the recovery.
One caveat, Ofreneo said, is that global trade also affects OFWs. Many global shipping
and logistics firms employ Filipino seafarers. The perfect storm in global trade, Ofreneo
said, would add to the existing challenge of the shipping and logistics industries to
automate and even use artificial intelligence (AI) in the hope of making their operations
“The only thing I know re shipping and logistics is the adverse impact on our seafarers
who are working in this sector. For example, Maersk, maraming [there are a lot of]
Pinoy. Jobs falling due to global recession. Also there is the trend towards leaner and
leaner ship cargo operations, facilitated by AI,” Ofreneo said.
IN terms of food security, Patalinghug believes that rice and vegetables are still in
adequate supply in the country. While the African Swine Fever (ASF) continues to
ravage hog farms nationwide, there are pork substitutes such as poultry and fish that
can be consumed by Filipinos.
He added that the recent move by the agriculture department to recommend a higher
minimum access volume (MAV) quota for pork imports will help address the shortage
from domestic pork suppliers. This shortage has been blamed for the surge in pork
The PSA said the price of pork in the National Capital Region (NCR) averaged P329 per
kilo in March, a 59-percent increase from the P207 per kilo recorded in March last year.
Compared to February, when the price of pork averaged P323 per kilo, the increase
was slower at 1.8 percent.
In Areas Outside NCR (AONCR), pork prices averaged P312 per kilo in March, a
50-percent increase from the P208 per kilo in the same period last year. However,
compared to February, there was a 1.6-percent decline in pork prices. The average
price of a kilo of pork in these areas was pegged at P317.
“IN short, there is no probability of a food shortage—unless there is a food riot due to
fake information in the social media, but this possibility is remote,” Patalinghug,
nonetheless, told the BusinessMirror in April.
He cited the “maximum” inflation target of the Bangko Sentral ng Pilipinas (BSP) at “only
Last week, monetary authorities slashed the central bank’s average inflation forecast for
this year from 4.2 percent to 3.9 percent.
Prior to this, Patalinghug said: “Let’s see if they can hit this target [4 percent].
“Reaching 10 percent—double digit—from 4.7 percent for this year is less of a
possibility, unless there is a food shortage—an unlikely scenario,” he added
Ofreneo added that a food shortage may not be possible given the high availability of
food imports in markets nationwide, particularly rice, pork and chicken.
To find a more sustainable solution, he said there is a need to increase support for local
producers. This support should help them and their products better compete with
imported goods that are currently available in the market.
Patalinghug believes the government has sufficient tools to address any shipping and
logistics problem. However, he emphasized, “there are no shipping and logistics
problems at present.”
Should a shipping or logistics problem arise, Patalinghug said the completion of Harbor
Link Road and Skyway Stage 3 will ease the situation.
“[This] despite the inefficiency of the DOTr [Department of Transportation] top
leadership, particularly its clueless Secretary,” Ofreneo said.
“If the government gets the competence to learn how to manage well the pandemic
problem, then the economy will be on the trajectory to growth, even without active
government intervention in terms of fiscal and monetary policy,” he added. “Certainty,
instead of fear due to the virus, and macroeconomic stability are the prerequisites for