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Philippines, Indonesia see increased trade with opening of new sea route

Publication Date : 02-05-2014

 

The goal for the less costly movement of goods and people between neighbouring Indonesia and the Philippines will be realised this month with the opening of the Mindanao-North Sulawesi sea route, according to the Mindanao Development Authority.

Luwalhati Antonino, chairman of the Mindanao Development Authority (Minda), said the opening of the Davao-General Santos-Tahuna-Bitung sea route this month would boost trade and economic ties between Mindanao and North Sulawesi.

These two areas are among the targeted growth centers under the Brunei-Indonesia-Malaysia-the Philippines economic cooperation treaty.

She said before this, consumer items for North Sulawesi area were being brought in all the way from Jakarta. This method jacked up prices, Jakarta being almost a thousand nautical miles from North Sulawesi, she added.

In contrast, Antonino said the direct sea route would only cover 350 nautical miles.

“We commend the continuous efforts of the private sector in making this route possible, which will significantly cut shipping costs and thereby allow our small and medium entrepreneurs to engage in international trading between these two points in the BIMP-EAGA,” she said.

Antonino said the opening of the sea route was covered by the agreement signed in Jakarta on April 11 between the Indonesian line PT Kanaka, the North Minahasa Chamber

of Commerce of Indonesia, Philippine-based cargo company ARREE Freight Express and the Davao City Chamber of Commerce.

“The sea route has expanded to include Tahuna, a fishing and trading center in Sangir Talaud group of islands in the province of North Sulawesi, situated in between Bitung and General Santos City,” she said.

According to Malou Monteverde, former Davao chamber president, PT Kanaka will provide shipping services to the route with conventional cargo-type vessel with a 120 twenty foot equivalent unit (TEU) capacity. ARREE Freight Express, on the other hand, will handle the cargo consolidation requirements for the shipping route, she said.

“We have always looked into this route as one of the cheapest and fastest ways to transport goods from Mindanao to Indonesia, and vice versa,” Monteverde said.

She said the vessel would ply the route twice a month and ferry canned beverage, fresh and dried tropical fruits, processed coconut, corn feeds, construction supplies, meat, poultry, and fish products from the Philippines to North Sulawesi.

Minda said a study made by the Research Education and Institutional Development (REID) Foundation in 2010 cited showed that the North Sulawesi-Mindanao sea link “offers strong potentials for international trade and commerce between Indonesia and the Philippines since it offers a proximate channel for the shipment of goods.”

“The opening of this sea route concretizes our long-running efforts to establish a shipping link between Mindanao and North Sulawesi,” Eko Hartono, Indonesian Consul General to Davao, was quoted in a news release as saying.

North Sulawesi is among the 10 provinces in the Indonesian islands of Kalimantan, Sulawesi, Maluku and Irian Jaya that are part of the BIMP-East Asean Growth Area.

Hartono added that once fully utilised, the sea route would serve as an impetus for the reopening of the Davao-Manado air links that would boost trade and tourism links between the two key cities in the sub-region.

 

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