New Market Study Published: Philippines Freight Transport Report Q1 2011

Dec. 9, 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. Some 25 pilots have so far resigned, as they believe they can get better jobs with other airlines. The pilots and flight attendants threatening strike action over a 40-age retirement requirement. PAL, provides air transport for passengers and cargo within and outside the Philippines, is a subsidiary of Philippine holding company PAL Holdings. Its 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, so his policies could if contentious be rejected. That said, BMI is upbeat about the country's immediate economic prospects, raising our forecast for 2010's 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.

Total airfreight, measured in tonnes, actually grew by 7.7% in the recession year of 2009, and is set to grow 9.4% in 2010. 2010's recovery will be based on international traffic rather than domestic.

Port tonnage recovered strongly in 2010. BMI forecasts an increase in volume at the Manila International Container Terminal (MICT) in 2010, up by 16.7% year-on-year (y-o-y), after a -9.4% contraction a year previous. Over the medium term, we believe growth will be vigorous. At the Port of Cebu, we forecast volumes increasing by 27.2% in 2010.

In real terms, we expect the Philippines' total trade (imports plus exports) to recover with 17% growth in 2010 following an -8.8% fall in 2009.

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
Industry Trends And Developments
- Road
- Rail
- Air
- Maritime
Industry Forecast Scenario
- Air Freight
- Table: Air Freight, 2007-2015
- Maritime
- Table: Maritime Freight, 2007-2015
- Table: Cargo, 2007-2015
- Trade
- Table: Trade Overview, 2007-2015
- Table: Key Trade Indicators, 2007-2015
- Table: Main Import Partners, 2002-2008
- Table: Main Export Partners, 2002-2008
Macroeconomic Outlook
- Table: Philippines - Economic Activity, 2005-2014
Market Overview
Company Profiles
- ICTSI
- PAL Holdings
- Philippines National Railway (PNR)
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.