PRLog (Press Release) -
Sep. 11, 2011 - We are predicting a good year for the Philippines' ports and shipping industry. The general economic environment for the sector will be supportive, with growth led by investment and private consumption, despite some fallout from the crisis in the Middle East (such as higher oil prices) and the earthquake in Japan, an important trade and investment partner for the Philippines. The new government of Benigno Aquino is continuing to do well in the opinion polls, and its attempts to reduce corruption and promote private sector investment will be good for ports and shipping. As far as factors more specific to the industry are concerned, the strong performance of intra-Asian trade is a positive, although total trade growth is now looking a little subdued. A key issue will be the progress of plans to expand port capacity: the key here is the extent to which private sector operators begin to invest in new projects. Headline Industry Data * The real value of the Philippines' total trade will rise by 4.0% this year, with exports totalling US$82.61bn, ahead of imports of US$76.07bn. * In terms of gross tonnage, the Port of Cebu will experience growth of 8.7% to 26.512mn tonnes in 2011, while Manila International Container Terminal (MICT) will see lower growth of 2.5% to 18.699mn tonnes. * MICT will remain the largest box-handling facility in the country, registering 2.7% growth to 1.654mn 20-foot equivalent units (TEUs). Cebu will experience stronger growth from a lower base: 4.7% to 367,667TEUs. Key Industry Trends 2010 Port Data Reflects Intra-Asian Trade Growth: According to the Philippines Port Authority (PPA), data for the country's ports last year show volume grew by 9.6% to 165.11mn tonnes on the back of a general trade recovery and strong intra-Asian flows. Growth was strongest at Manila, Surigao and Limay. Overall container handling was up by 11.5% to 4.47mn TEUs. Developments Planned At Manila: The PPA said it was planning a feasibility study for a new bulk cargo handling facility at Manila's South Harbour. The aim will be to call for private sector participation in the new bulk terminal, needed among other things to handle rice and wheat imports. Separately there were reports of plans for a new bunkering and logistics facility at Manila North Harbour Point (MNHPI). Good Year for ICTSI: International Container Terminal Services Inc., the Philippines-
based ports operator, registered a 25% year-on-year (y-o-y) growth in its port operations revenue to US$527.1mn in 2010. The company also recorded a 79% y-o-y hike in net income attributable to equity holders to US$98.3mn in 2010. Key Risks To Outlook The main risks to our Philippines ports and shipping projection is that the combined MENA and Japan crisis, which at the moment has prompted us to reduce this year's GDP forecast by a fraction of a percentage point, will last longer and become more serious than expected. The most likely scenario would be one in which continuing MENA unrest triggers a higher and more sustained oil price rise, while Japanese investment flows into the Philippines turn downwards, also more severely than anticipated. We would therefore see slower GDP growth and the possibility of a serious squeeze on shipping and port operators' profitability.
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