September 16, 2014

Manila city government lifts truck ban

The Manila city government has reportedly lifted the daytime truck ban over the weekend. The ban has been blamed for the current congestion in the ports and worsening traffic in the metropolis. This has also led to higher costs for trucking operators, and warehousing fees for importers and manufacturers. Some port operators even offered cash incentives to truck owners who will continue to haul containers on weekends.

Our take: The lifting of the ban should help ease concerns on rising costs for importers, manufacturers and retailers especially amid the season where they need to stock up on inventory to prepare for the demand surge towards the Christmas season. Retail companies have earlier noted additional margin pressures arising from rising transport and warehousing expenses while some manufacturing companies blamed the port congestion for their slower business velocity.

Among the key listed companies that should benefit from the lifting of the truck ban are those with retail operations such as SM Investments (SM), Puregold Price Clum (PGOLD) and Robinsons Retail Holdings (RRHI); manufacturers Universal Robina

Corp (URC), RFM Corp (RFM) and D&L Industries (DNL). This should also arrest any potential cost pressures for construction and property companies.

Finally, the lifting of the ban should address a key bottleneck that has been weighing on the country’s productivity. This should lead to increased economic activity and help sustain rising GDP growth momentum which, in the end, will be taken positively by the market. - WealthSec