May 2, 2017
The Japan International Cooperation Agency (JICA) welcomed the opening this week of a new Roll-On Roll-Off (RO-RO) shipping route between the Philippines and Indonesia saying it will act as an important logistics infrastructure backbone to help boost the country's trade with ASEAN, stimulate the local economy and job creation.
The 2013 JICA Master Plan and Feasibility Study on the Establishment of an ASEAN RO-RO Shipping Network and Short Sea Shipping study showed that the new shipping route Davao-General Santos-Bitung (Sulawesi, Indonesia) would increase trading opportunities for potential Philippine commodities to ASEAN markets. Commodities like processed seafood, tuna, corn, Cavendish bananas and dried fruits products are among those that can be exported via the said route to Philippine trade partners in BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East Asia Growth Area).
Specifically, a follow-up JICA study on ASEAN RO-RO in 2016 noted that the Davao-General Santos-Bitung route would help reduce shipping time for Mindanao-based businesses to send their products to neighboring markets from the usual 5 weeks via Manila route to 8 days.
"The new RO-RO route will help the Philippine economy and expand development reach in the country. Increased trade and tourism brought about by the RO-RO will consequently translate to more jobs and enhanced bilateral relations between the Philippines and its neighboring countries in ASEAN," said JICA Chief Representative Susumu Ito.
Said Davao-General Santos-Bitung route is among the priority RO-RO routes identified by the JICA studies including Dumai (Indonesia)-Malacca (Malaysia), and Belawan (Indonesia)-Penang (Malaysia)-Phuket (Thailand) shipping routes.
Data from the Philippine Statistics Authority (PSA) for the first semester of 2016 showed ASEAN accounting for 21.7% of the country's entire trade equivalent to US$14.257 billion.
Historically, government data showed that the Philippines' trade with ASEAN from 2000 to 2011 had an average growth rate of 3.9% total trade vis-a-vis other ASEAN countries. Philippine intra-ASEAN trade also grew by 7.2% for the same period.
The JICA studies meanwhile recommended maximizing trade and ensuring sustainable RO-RO shipping operations by ASEAN through alignment of customs, immigration, quarantine and security policies with the RO-RO's seamless transport concept.
"The ASEAN RO-RO presents opportunities for the Philippines to gain foothold in the ASEAN market in both trade and also tourism at the onset of regional economic integration," added Ito.
East Asian countries including Japan, Korea, and China and the European Union (EU) have used the RO-RO concept to boost seamless connectivity in their trade and cross-border tourism.
The Davao-General Santos-Bitung route is part of ASEAN's sub-regional efforts to facilitate trade and investments.
Additional information on the JICA master plan and feasibility study may be accessed through this link:
The Davao-General Santos-Bitung route (shown in red) is among the priority RO-RO routes identified by the JICA studies including Dumai (Indonesia)-Malacca (Malaysia), and Belawan (Indonesia)-Penang (Malaysia)-Phuket (Thailand) shipping routes (shown in black)