Market Report, "Philippines Freight Transport Report Q4 2010", published

Sept. 12, 2010 - PRLog -- Philippines national carrier Philippine Airlines (PAL) received approval from the government to launch a massive outsourcing programme aimed at reducing costs in June 2010, after the government ruled against employee opposition. The decision will affect the airline's cargo and ground handling, in-flight catering and call centre reservations units. The workforce will be reduced from the 7,500 to 4,000, which is aimed at saving up to US$22mn per year. Trade unions have decided to fight against the cost cutting decision. PAL, which provides air transport for passengers and cargo within and outside the Philippines, is a subsidiary of Philippine holding company PAL Holdings. It's route network covers 29 cities in the Philippines and 33 international destinations.

The May 2010 general election produced a clear winner, the Liberal Party's Benigno Aquino III, who started a six-year presidential term in June, replacing Gloria Macapagal-Arroyo. While this suggests there will be political stability and strong leadership, less good news for the freight industry was that the new president lacked a clear majority in congress, meaning his policies could be subject to significant horsetrading. That said, BMI is upbeat about the country's immediate economic prospects, raising our forecast for this years' GDP growth to 4.9%, from 4.4% previously, on the back of dynamic performances from private consumption and investment. However, we have reduced our projection for 2011 to 4.0%, down from 4.4%, because of the prospect of a double-dip slowdown in global growth rates.

Based on official data series we believe that total air cargo, measured in tonnes, fell by 4.4% in the recession year of 2009, and it is set to recover with 5.6% growth in 2010. This year's recovery will be based on international traffic rather than domestic.

Data for Q110 showed port tonnage recovering strongly. BMI forecasts an increase in volume at the Manila International Container Terminal (MICT) in 2010, up by 25.2% year-on-year (y-o-y), after a 42.0% surge last year. Over the medium-term, we believe growth will be vigorous. At the Port of Cebu we forecast volumes increasing by 9.2% in 2010. The MICT is expected to achieve 25.5% container handling growth this year, adding to the significant increase already experienced in 2009, when most of the world's ports were suffering during the recession. Growth at Cebu is forecast at 3.3%.

In real terms, we expect the Philippines' total trade (imports plus exports) to recover this year, following a 8.8% fall in 2009. With the domestic economy performing ahead of expectations, we expect trade to increase by 9.6% in 2010, making up for last year's setback.

We still believe that the risks to our Philippines freight forecasts are to the downside. With the presidential election complete, political risk is reduced, but there is a question mark over the relationship between Aquino and congress. A deadlock would delay public and private investment decisions, with negative knock-on effects for growth. The second risk to monitor is the possibility of a greater than expected double-dip recession in China, which would mainly affect 2011's growth. China has grown in importance as a Philippines trading partner, and is currently the country's top export market, so it has a major influence on the local economy.

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Report Table of Contents:

Executive Summary
SWOT Analysis
- Philippines Freight Transport SWOT
- Philippines Political SWOT
- Philippines Economic SWOT
- Philippines Business Environment SWOT
Freight Transport Business Environment Ratings
- Table: Asia Pacific Freight Business Environment Ratings
- The Philippines Freight Transport Industry Ranking
- Philippines Logistics Performance Index (LPI)
- Transport Intensity Index
- Political Risk Summary
- Economic Risk Summary
- Business Environment Risk Summary
- Legal Code/Corruption
- Red Tape
Industry Trends And Developments
- Road
- Rail
- Air
- Maritime
Industry Forecast Scenario
- Air Freight
- Table: Air Freight Cargo, 2007-2014 (tonnes)
- Table: Air Freight, 2007-2014
- Maritime
- Table: Maritime Freight, 2007-2014 (throughput, '000 tonnes0
- Trade
- Table: Trade Overview, 2007-2014
- Table: Key Trade Indicators, 2007-2014
- Table: Philippines' Main Import Partners, 2002-2008 (US$mn)
- Table: Philippines' Main Export Partners, 2002-2008 (US$mn)
- Macroeconomic Outlook
- Table: Philippines - Economic Activity, 2007-2014
Market Overview
Company Profiles
- ICTSI
- PAL Holdings
- Philippines National Railway (PNR)
Country Snapshot: Philippines Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2007-2012 (US$)
- Table: Average Annual Manufacturing Wages, 2004-2006
BMI Methodology
- How We Generate Our Industry Forecasts
- Transport Industry
- Sources

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.