TRADE between Mindanao and Indonesia is expected to expand further following an agreement to allow Philippine exports of electronics, garments, and food products to enter via the Bitung international hub port with privileges as ASEAN-originated products.
Bitung is located on the northern coast of the island of Sulawesi in Indonesia, south of Mindanao. A roll-on, roll-off (RORO) vessel service is planned to facilitate trade between the two islands across the Celebes Sea.
After Bitung was upgraded to an international hub port, Indonesia’s Ministry of Trade removed Philippine export products from a negative list and allowed them trade facilitation measures enjoyed by member-nations of the Association of Southeast Asian Nations (ASEAN).
Alfredo M. Yao, president of the Philippine Chamber of Commerce and Industry (PCCI) in a statement thanked the Department of Trade and Industry and the Department of Foreign Affairs for supporting the advocacy of the Mindanao business community and the ASEAN Business Advisory Council (Philippines) for liberalized trade.
“The exemptions from Customs inspections, tariff-free privilege, and the freight cost savings of the initial list of Philippine export products to Indonesia have enormous impact on cross-border trade between two neighbors,” said Yao.
“Small and medium entrepreneurs, particularly those in food products, will benefit from the direct access to Bitung,” Yao said.
“Especially for those unfamiliar with export and import trade, PCCI and the member-chambers in Davao, General Santos, Sarangani, and other cities will organize seminars to understand the business culture, rules and regulations, and evaluate the business climate.”
“Our entrepreneurs would also be oriented on the trade assistance services of the government through the DTI,” he added.
Yao foresaw also the possibility of production-sharing arrangements in which there will be a regular flow of commodities from Indonesia such as coconut and fisheries products to processing plants in Mindanao.
From a three-day long ship passage via Jakarta, the transport time of goods between the Philippines and Indonesia will be cut in half with the use of Ro-ro vessels between Davao and Bitung.
Yao said the Filipino and Indonesian officials involved with the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines – East Asean Growth Area) project will set the schedule for a symbolic launch.
A commercial shipping service, Surabaya-based PT. Kanaka Lines, will start twice-monthly cargo shipping operations between Surabaya-Bitung-Davao with a 200 twenty foot equivalent container capacity tentatively starting third quarter of 2014.
At end-2013, Indonesia was the Philippines’ 11th biggest trading partner with total trade reaching $3.51 billion.
The Davao-Bitung RORO project was made possible with the signing of a Memorandum of Cooperation between the Davao City and Manado Chambers of Commerce and Industry during the Davao Investment Forum in November 2012.
Trade Secretary Gregory L. Domingo endorsed the project. This development is a core advocacy of the Philippine Consulate General in Manado, in anticipation of increased trade between Southern Mindanao and North Sulawesi.