Amidst obstacles in COVID-19 recovery efforts, the global economy has surged ahead, exceeding pre-pandemic levels of international cargo volume. Further fortifying this recovery is the robust growth anchored in South-South trade, where developing countries, including the Philippines, emerge as key drivers of progress. In contrast, North-North trade between developed nations is expected to experience more moderate and stable growth.

According to the United Nations Conference on Trade and Development (UNCTAD), except for Africa, all other regions have already regained their pre-crisis trade levels. Notably, Asia and Europe form the largest trading bloc, with countries favoring regional trade, which has outperformed inter-regional trade. Asia, in particular, has witnessed significant output growth, surpassing other country groups from 2016 to 2022.

UNCTAD emphasizes that South-South trade has rebounded faster than world trade, as developing economies have increased exports to fellow developing nations rather than to the North or developed economies. South-South trade constitutes around 58% of total global trade, amounting to approximately $5.4 trillion.

Developing economies as a whole, including Asia, play a pivotal role in driving global trade, with their influence growing significantly. Asian developing countries, in particular, have emerged as major exporters within the South-South trade landscape, becoming the primary export destination for other developing regions (excluding the Americas).

It is worth noting that 90% of the total volume of traded goods in developing countries relies on maritime transport, underscoring the vital role of ports and related services in fueling economic growth. Developing nations have become major exporters of commodities and also engage in the import and export of finished and intermediate manufactured goods.

Despite facing challenges such as rising COVID-19 cases near business districts and port areas, the Philippines continues its journey towards recovery. External seaborne trade continues to grow, although it faces headwinds from geopolitical concerns, inflation, and higher energy and fuel prices, resulting in increased commodity costs for end-users.

The latest data from the Philippine Ports Authority reveals that foreign cargo totaled 160.446 million metric tons (MMT) by the end of 2022, accounting for around 39% of the total cargo volume passing through Philippine ports. This included 97.514 MMT of import cargo and 62.932 MMT of export cargo. Compared to pre-pandemic levels in 2019, the 2022 figure represents a marginal decrease of less than one percent.

To cope with the rising cargo volume, the Philippine Ports Authority (PPA) is actively preparing three ports to serve as regional hubs, aimed at reducing shipping costs for the country’s foreign trade. These ports include General Santos, Davao, and the Iloilo Commercial Port Complex. The PPA plans to award the contracts for operational and management control of these ports to the private sector before the end of 2023. This strategic move ensures the country remains responsive to global trade demands by offering services and facilities aligned with global best practices and capable of handling larger, higher-capacity, and more sophisticated international vessels. Furthermore, these developments will complement other modernized, high-capacity ports such as the Manila International Container Terminal, the Manila South Harbor, and the Port of Batangas.

The Maritime Industry Authority (Marina) is actively promoting the Philippines to the international market by conducting roadshows to attract shipping line operators to invest in newer and more sophisticated ships. Marina offers incentives to increase the country’s owned tonnage, reducing reliance on time charters. The agency also collaborates with international shipping lines to enhance the country’s logistics cost competitiveness, initially aligning it with regional standards.

The Department of Transportation, in turn, meticulously scrutinizes its line agencies to ensure the delivery of economic growth across the nation through accessible, affordable, comfortable, and safe transportation. These efforts aim to facilitate seamless connectivity and bolster the country’s economic resilience.

President Ferdinand R. Marcos, Jr. summarized these initiatives during the launch of the Maritime Industry Development Plan 2023-2028 in February. He emphasized the maritime industry’s significance to the country’s overall economic and social fabric, underscoring the pivotal role of seafarers as the main ingredient propelling the Philippine maritime industry toward superpower status in the coming years.