FOREWORD

The achievement of the Philippines development goals of rapid, sustained growth and shared
prosperity presumes a well-functioning services sector that is critical to reducing transactions
costs and raising productive capacity. In this quest for inclusive development, an efficient
transport and logistics industry is essential.

Logistics integrates transport, storage, freight forwarding, and information services in the
process of managing the flow of goods, services, and information from the point of origin to the
point of use. As an economy undergoes structural transformation and industries increasingly
take on higher-value-added activities, the demand for seamless connectivity to support the
greater intersectoral linkages is bound to increase. The involvement of multiple services across
the supply chain, however, requires a high degree of coordination in the actions of various
private service providers in order to ensure the efficient and timely delivery of the product or
service to the end-users. Fragmented and uncoordinated public policies and regulations that
influence the behaviors of private actors multiply the risk of coordination failures, exacerbate
inefficiencies, and raise the cost of doing business leading to loss of competitiveness and a
lower level of societal welfare.

The role of government in providing an enabling environment to reduce the risk of

coordination failures thus looms large in the logistics sector. Through the promulgation and
enforcement of consistent policies, laws, and regulations governing infrastructure development
(particularly transport), promoting competition, encouraging innovation, developing technical
standards, and eliminating administrative bottlenecks, government can help raise the
competitiveness of logistics service providers and create the conditions for the development of
a thriving logistics market.

As transport is a central component of logistics, improving the efficiency of the various modes
of transport and facilitating the coordination and smooth interchange of different transport
modes easily come to mind as low-hanging fruits.

Industry associations equally play an important role in logistics development; they can be
effective channels of communication amongst various industry players themselves and
between industry players and the government. Amongst actors in the supply chain (e.g.
suppliers, manufacturers, distributors, end-users), they can contribute towards improving
coordination. Between logistics industry stakeholders and the government, they can help
overcome the effects of fragmentation in the scope and design of regulation arising from the
diversity of stakeholders' objectives and government regulators' mandates.

The Philippine Multimodal Transportation and Logistics Industry Roadmap which follows is
the result of a private sector initiative to open a dialogue with government on the basis of
concrete and specific proposals aiming to catapult the Philippines to the status of a logistics
hub in Southeast Asia by 2030 capitalizing on a robust multimodal transportation system. The

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Roadmap describes the industry structure, discusses key concerns, does a SWOT assessment,
and maps out specific goals and time-bound strategies.

Among the issues highlighted that constrain the development of an efficient multimodal
transport and logistics industry are: the underdeveloped transport infrastructure, inconsistent
and outdated government regulations, bureaucratic red tape that breeds corruption, the
absence of a national skills training program for new hires and industry professionals,
government's non-compliance with international agreements, and the lack of a national
masterplan to guide industry stakeholders on the future direction of the logistics industry.

By no means the last word on the subject matter, the Roadmap nevertheless provides a starting
point for thinking about the strategic direction of transport and logistics services in the
Philippines. The present administration's thrust to develop agriculture and manufacturing and
raise the contribution to GDP of regions outside the national capital on the one hand, and the
opportunities opened up by ASEAN Economic Community on the other hand certainly make the
Roadmap a timely contribution to current policy discussions.

DR. EMMANUEL F. ESGUERRA

Former Philippine Socioeconomic Planning Secretary and
National Economic and Development Authority Director-General
Convenor, Asia-Pacific Economic Cooperation Group on Services, APEC Philippines 2015
Manila, Philippines
August 2016

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