SCMAP Perspective is our fortnightly column on PortCalls, tackling the latest developments in the supply chain industry, as well as updates from within SCMAP. On this column, Henrik Batallones looks at the potential future of maritime trade in Luzon as development in Subic and Batangas ramps up.
Reimagining our gateways
News of International Container Terminal Services Inc. seeking to develop a port in Bauan, Batangas, made me think of what Singapore is doing at the moment.
Two years ago, a new port at the Tuas district partially opened. Once it is fully completed in the 2040s, it should be able to handle 65 million TEUs. It almost doubles the current capacity of ports in the Pasir Panjang district. This, alongside ports closer to the city center, will be closed, with operations moving to Tuas entirely.
Apart from increased capacity, the Tuas Mega Port is set to deploy state-of-the-art automation and digitalization solutions, including a significant investment in automated guided vehicles that will move containers from the yard to the wharf. It is also envisioned to achieve net zero emissions by 2050.
Of course, the situation in Singapore and Manila are quite different. The former, for instance, is where the vast majority of the country’s goods come from, considering it has little land and natural resources. While Manila serves as the gateway to the similarly import-heavy Philippines, it is not the sole point of entry for necessary raw materials. Manila also acts as a key transfer point to other parts of the country. Priorities in port development, therefore, are different.
That said, the response to coping with increased traffic to and from Manila is to develop new ports, providing locators – especially those in key industrial hubs in the provinces – with additional options to receive and ship raw materials and finished goods. Batangas, for instance, has become a major logistics hub for manufacturers located in CALABARZON, with some companies choosing to leave Manila entirely in its favor. It has also seen a growing niche in transporting finished cars. This success is no doubt a reason why ICTSI has decided to invest in a full-fledged container port there.
On the other hand, Subic has also seen increased success, thanks to the development of major land transport routes such as the Subic-Clark-Tarlac Expressway and the Tarlac-Pangasinan-La Union Expressway, improving connectivity for locators in central and northern Luzon. The development of the Clark International Airport and the New Manila International Airport would forge an even more robust logistics ecosystem.
Infrastructure development also continues around these ports. Between the Bataan-Cavite Interlink Bridge and the planned railway link connecting Subic, Clark, Manila and Batangas, the potential of the two major ports outside Manila will continue to grow. (The Luzon Economic Corridor initiative may be as much a geopolitical play as an economic one, but it could go a long way to develop these areas outside the capital.) As we have seen in the last few years, new transport links make a region more attractive to commercial and industrial locators. A slow-motion realization of the government’s ambitions to encourage growth away from Manila.
So, I couldn’t help but wonder: will there come a time when our ports will leave Manila for good, focusing instead on Subic and Batangas?
Not exactly an easy question to answer. I’m not sure if that’s a long-term ambition nobody has spoken about yet. I personally think it’s not going to happen yet. Or, at the very least, we might see Manila’s ports be repurposed. What about Manila as a transshipment hub, handling finished products to be sent off to other parts of the country? Of course, it will most likely remain a center of passenger traffic to and from the capital.
In any case, one hopes that ongoing and future developments surrounding our ports take into consideration both present and future challenges shippers face. The assault of severe tropical storm Kristine over large swathes of Luzon – critically including Batangas province – stresses the importance of reducing our ports’ carbon footprint. (Every little still counts.) These ports should also be ready to embrace ongoing changes across our land transport landscape, such as the adoption of electric vehicles. But, of course, these innovations should not come at a huge cost to shippers – these should not be an excuse to impose exorbitantly high rates.
With all this going on, it’s curious to see what our major sea gateways – the whole ecosystem – would look like in a few decades. We have ideas, but maybe it’s best not to guess and just see where we would be going, because everyone has different needs and conditions. We may not be like Singapore, but we can build a world-class supply chain for our needs.