"Philippines Freight Transport Report Q1 2010" now available at Fast Market Research

Jan. 18, 2010 - PRLog -- In May, government officials said they were confident that the country would pass a US Federal Aviation Administration (FAA) audit of its safety standards, which would allow the expansion of existing air services to US airports. A spokesperson for the Philippines transportation department, Thompson Lantion, said a major step in regulatory reform had been taken in 2008 with the creation of a new agency, the Civil Aviation Authority of the Philippines (CAA). He said the FAA audit would take place in October 2009 and would include a check on safety and technical standards of aircraft mechanics and pilots. Lantion said officials were confident the country would regain its old Category 1 status, after the FAA had in December 2007 downgraded it to Category 2. The downgrade prevented national flag-carrier Philippine Airlines (PAL) from increasing flights to the US above the existing number of 33 a week, or from changing the type or number of aircraft used to provide those services.  BMI's newly released  Philippines Freight Transport Report notes that overall cargo volume in the country should grow by an annual average of 4.1% in the 2009-2013 period, down from 5.4% in the preceding five years. Bearing in mind the impact of the global recession, the outlook for the Philippines economy over the next five years is for moderate to slow growth, averaging 3.9% per annum in 2009- 2013. The effect is to give freight a reasonable platform for development, although companies will face greater pressure on their margins than before. While in many developing economies freight growth usually exceeds GDP growth by a significant margin, the narrower gap between the two rates in the Philippines shows the extent to which the transport sector is failing to live up to its full potential. The air freight sector is expected to experience the most significant growth rate, averaging 4.8% year-onyear (y-o-y). This takes into account cooling demand in the sector. Next in importance will be rail freight, growing by 4.5% from a low base as a result of the Northrail and Southrail projects. We see shipping growing by 4.1%. One constraint facing the industry is the environment in which it operates. Comparatively speaking, the Philippines'  BMI freight rating is relatively poor in comparison with regional peers, with an overall score of 48.3 (out of a potential 100). Under most categories, the national industry received a medium to low score. Freight and infrastructure growth rates, together with the transport intensity index (a measure of the dynamism of foreign trade) are all at the lower end of the scale. For the 2009-2013 forecast period, we expect the transport and communications sector to outpace the economy as a whole by a small margin, as far as value of output is concerned. It will achieve average annual growth of 4.2%, versus 3.9% for overall GDP. Again, the gap between these two rates is narrower than experienced in many other emerging economies. The total value of transport and communications GDP will rise to US$17.9bn in nominal terms by 2013, representing 7.2% of the Philippines' GDP.

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