DBP sets up P30-B loan facility for logistics development

The Development Bank of the Philippines will set aside P30 billion in the next 15 years for the development of the logistics sector in the country, to help reduce the cost of moving goods and people from the different parts of the country.

The credit facility called Sustainable Logistics Development Program was explained by DBP executive vice president Elizabeth Ong to participants of a high-level corn workshop initiated by the Office of Million Jobs of Presidential Adviser Luis P. Lorenzo Jr. at the Land Bank Plaza in Malate.

Ong said the program is a collaboration between government and private sector to bring about cost effective ways of moving goods and people.

Asked by a local shipper about the terms and conditions of the facility, Ong said these are similar to an existing shipping loan facility of DBP. Shippers said they find these terms very stringent, which is why availment has been very low. Lorenzo said his office will try to work out amendments to the requirements of DBP where ships can not be accepted by DBP as chattel mortgage for the loan.

This also arose from various workshops held in recent months, the last of which was at the Mindanao Business Council in Surigao, where companies using raw materials from Mindanao for their processing lines showed preference to import these from other countries than get from local sources because of high logistics cost.

The objective is to improve the infrastructure that will have direct impact on prices of basic commodities both as an anti poverty strategy and to spur economic activity in the countryside, Ong said.

Main beneficiaries of the program are producers and users of grains, perishables including fish, fruits and vegetables.

Around 40 percent of harvested products worth P30 billion are lost due to wastage brought about by inadequate and inappropriate infrastructure and technology, Ong said citing a study by the US Agency for International Development. Another study of a Japanese consultant placed the spoilage at 20 percent of national production amounting to P4.5 billion a year.

Ong stressed the urgency of replacing traditional and inefficient storage, handling, transport and support systems and introducing modern ones under proper quality control management.

With efficient transport of foods from areas to markets, the program sees minimal wastage, lower freight and handling costs per unit of cargo, adequate ports and supporting systems, just in time (JIT) loading and delivery of cargo and safety in transport.

Envisioned in the program is a grains highway, a road RORO (roll in, roll out) ferry network and a cold chain.

The grains highway will contain processing centers with mechanical shelling, drying and storing in bulk, bulk trucking, terminal facilities (silos and mechanical loading/unloading) and bulk carriers.