Philippines Shipping Report Q4 2011
Includes 3 FREE quarterly updates
Heading into Q411, we are predicting steady growth for the Philippines' ports and shipping industry withcontainer and tonnage throughput levels expected to grow modestly in 2011 at the country's main ports. BMI's latest projections for the global shipping market centre on the threat of overcapacity, especially on the Asia-Europe route. It is our view that this trade route will be the most affected by overcapacity because a large percentage of the box orderbook is accounted for by mega-vessels, which are only able to operate on the Asia-Europe trade route. The 20 triple E-type vessels ordered by Maersk Line that are due to begin coming online from 2013 will boast a capacity of 18,000 20-foot equivalent units (TEUs) but will only be able to operate on the Asia-Europe route.
Headline Industry Data
On the downside, of interest to the shipping sector in the Philippines is a Supreme Court ruling in July 2011 that has redefined the concept of foreign ownership in Philippine public utilities, resulting in a surge in non-compliance among these firms.
We believe the Philippine Supreme Court's ruling that restricts the definition of foreign investor ownership in Philippine public utilities will undermine President Benigno Aquino III's strategy of attracting more foreign direct investment (FDI) over the long run. The Philippine judiciary in June issued a directive to the Securities and Exchange Commission (SEC) to assess whether the foreign ownership limit in Philippine Long Distance and Telephone Company (PLDT) had been violated. In particular, the Supreme Court emphasised that voting stock (common and voting preferred shares), instead of total capital stock (including non-voting shares), should be used during the calculation.
Another risk to BMI's Philippines ports and shipping projection is the escalating situation in the Middle East and North Africa (MENA) and the impact of the earthquake in Japan earlier in 2011. Already this year we have dropped our GDP forecast by a fraction of a percentage point due to an amalgamation of these factors. Continuing MENA unrest is most likely to lead to a higher and more sustained oil price rise, while Japanese investment flows into the Philippines turn downwards.
Heading into Q411, we are predicting steady growth for the Philippines' ports and shipping industry withcontainer and tonnage throughput levels expected to grow modestly in 2011 at the country's main ports. BMI's latest projections for the global shipping market centre on the threat of overcapacity, especially on the Asia-Europe route. It is our view that this trade route will be the most affected by overcapacity because a large percentage of the box orderbook is accounted for by mega-vessels, which are only able to operate on the Asia-Europe trade route. The 20 triple E-type vessels ordered by Maersk Line that are due to begin coming online from 2013 will boast a capacity of 18,000 20-foot equivalent units (TEUs) but will only be able to operate on the Asia-Europe route.
Headline Industry Data
- MICT will remain the largest box-handling facility in the country, registering 2.66% growth to 1.65mn TEUs. Cebu will experience stronger growth from a lower base: 4.71% to 367,67TEUs.
- In terms of gross tonnage, the Port of Cebu will experience growth of 8.67% to 26.51mn tonnes in 2011, while Manila International Container Terminal (MICT) will see lower growth of 2.48% to 18.70mn tonnes.
- The real value of the Philippines' total trade will rise by 4% this year, with exports totalling US$61.72bn, ahead of imports of US$60.51bn.
- ICTSI Sees Opportunities In Middle East Turmoil - Philippine port operator ICTSI's billionaire owner, Enrique Razon, has declared that the mass protests in the Middle East represent an opportunity for his business in the long term.
- DIPSSCOR Sees Its Reefer Storage Capacity Double - DAVAO Integrated Port Services & Stevedoring Corp (DIPSSCOR) doubled its reefer storage capacity in June 2011, from 144 to 288.
- ICTSI Pens Deal With SBMA - Philippine port operator International Container Terminal Services Inc (ICTSI) and the Subic Bay Metropolitan Authority (SBMA) finalised a deal regarding the operation of a new container terminal at Cubi Point, Subic Bay, in July.
On the downside, of interest to the shipping sector in the Philippines is a Supreme Court ruling in July 2011 that has redefined the concept of foreign ownership in Philippine public utilities, resulting in a surge in non-compliance among these firms.
We believe the Philippine Supreme Court's ruling that restricts the definition of foreign investor ownership in Philippine public utilities will undermine President Benigno Aquino III's strategy of attracting more foreign direct investment (FDI) over the long run. The Philippine judiciary in June issued a directive to the Securities and Exchange Commission (SEC) to assess whether the foreign ownership limit in Philippine Long Distance and Telephone Company (PLDT) had been violated. In particular, the Supreme Court emphasised that voting stock (common and voting preferred shares), instead of total capital stock (including non-voting shares), should be used during the calculation.
Another risk to BMI's Philippines ports and shipping projection is the escalating situation in the Middle East and North Africa (MENA) and the impact of the earthquake in Japan earlier in 2011. Already this year we have dropped our GDP forecast by a fraction of a percentage point due to an amalgamation of these factors. Continuing MENA unrest is most likely to lead to a higher and more sustained oil price rise, while Japanese investment flows into the Philippines turn downwards.
Contents
Executive SummarySWOT Analysis
Philippines Shipping SWOT
Philippines Political SWOT
Philippines Economic SWOT
Philippines Business Environment SWOT
Global Overview
Container Shipping: Overcapacity Threat To Haunt In The Mid Term, Asia-Europe Most Exposed
Drivers
Bellwethers
Rates
Capacity
Table: Newbuilds Due Online In The Mid Term
Dry-Bulk: No Recovery On The Horizon For Dry Bulk As Overcapacity Cloud Hangs Low
Drivers
Capacity
Rates
Liquid Bulk Shipping: At the Start of a Brutal Down Cycle
Drivers
Capacity
Rates
Industry Trends and Development
Market Overview
Manila International Container Terminal
Terminals, Storage And Equipment
Port of Cebu
Industry Forecast
Table: Major Port Data, 2008-2015
Table: Trade Overview, 2008-2015
Table: Key Trade Indicators, 2008-2015
Table: Main Import Partners, 2002-2009
Table: Main Export Partners, 2002-2009
Company Profile
MCC Transport
Maersk Line
Mediterranean Shipping Company (MSC)
CMA CGM
COSCO Container Lines Company Limited (COSCON)
Hapag-Lloyd
Evergreen Line
APL
CSAV
Hanjin Shipping (Container Operations)
China Shipping Container Line (CSCL) Skip to top