Thursday, August 14, 2014

Manila port logjam fans inflation as output ebbs

CONTAINERS with goods from garlic to microchips are piling up at the main ports in the Philippines six months after a truck ban took effect, causing a supply logjam that’s fanned inflation and may impair output.

A file photo of cargo vessel at a port in Manila. Manila’s ports account for about a third of the country’s inbound and outbound cargo, according to official data.

 “It’s hurting production; it’s raising our costs,” said Alfredo Yao, president of the Philippine Chamber of Commerce and Industry which has 1,500 members. “Inflation has accelerated. It won’t be long before it hurts economic growth.”
Manila expanded a daytime ban on trucks in February, doubling the turnaround time for the vehicles, crowding the city’s three ports and holding up goods meant for consumption and production. The restrictions, coming amid agricultural shortages caused by typhoons, spurred food inflation to a five- year high in July, exacerbating the challenge to the central bank as there is little it can do to check supply constraints with monetary policy.

Imports fell 9.6 percent in May, the biggest decline since April 2012, according to data compiled by Bloomberg. As many as 12,000 containers at Manila’s ports have been stuck for more than two months, the Philippine Ports Authority said on Aug. 5.
 

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