Philippines port decongestion order expected to boost selective warehouse segments

Analysts expect a proposed joint administrative order to clear port backlogs and drive demand for modern, well-located warehouses near ports and markets. The measure, being finalised by the Department of Finance, aims to optimise yard capacity and bring transparency to cargo handling fees.

Selected segments of the modern warehouse industry could benefit when the Philippine government clears up the backlog at the ports, analysts said. They said strategically located and modern facilities will be the main beneficiaries when the proposed joint administrative order (JAO) being prepared by the Department of Finance (DoF) is adopted, unlocking the cargoes currently building up at container yards ahead of the holidays. The JAO is expected to be signed soon following the completion of consultations. It is expected to optimise yard capacity and ensure transparency in cargo handling fees.

“What we have seen is a greater demand now for micro warehouses, modern warehouses that are near ports, seaports and even airports,” Colliers Philippines Director for Research Joey Roi Bondoc said in a call on Monday. Mr. Bondoc said that even before the order was issued, rising fuel expenses and peso depreciation had been squeezing importer margins. “It really doubles, triples your logistics cost. So the practical solution now is to look for a warehouse that is near ports and near the market.”

Savills Philippines Associate Director for Investments Early G. Orolfo said the measure will force businesses to be more discerning about their space requirements. “I think demand will become more selective. Businesses will not just be looking for space to store their goods; they will want facilities that help them move products faster, manage costs, and serve their customers more efficiently,” she said via Viber. Ms. Orolfo noted that while easing yard congestion creates opportunities for off-dock container yards and inland logistics parks, it may not trigger an immediate rush for new footprint if existing yards handle containers more efficiently. “The bigger opportunity will be for well-located facilities that can address specific gaps in the supply chain and connect ports more efficiently with warehouses, distribution centres, and end markets,” she added.

Developers are currently facing location challenges as land values appreciate and potential sites are being converted to higher-yielding properties. Mr. Bondoc noted that while Southern Luzon offers established connectivity, rising land prices pose constraints. He added that Northern Luzon promises cheaper land, but developers must contend with incomplete transportation networks. “When you’re trying to capture the Metro Manila market, you need to depend on, say, cargo railways, which are non-existent at this point,” he said, highlighting the importance of long-term solutions such as a freight rail connecting Clark to the National Capital Region. He added that developers will continue concentrating on Central Luzon, the Cavite, Laguna, Batangas, Rizal, and Quezon region, and Metro Manila because the three regions represent the primary concentrations of economic activity.

For cold chain storage and other specialised hubs, analysts pointed to expanding opportunities, tempered by utility requirements. Mr. Bondoc said macroeconomic indicators for cold storage remain favourable due to imports and e-commerce food orders. Ms. Orolfo said that alongside transport connectivity, power grid reliability is crucial for automated and refrigerated facilities. “Even a well-located facility can become costly to operate if power interruptions affect equipment, inventory, or daily operations.” She added that developers will likely maintain a cautious approach by building in phases or securing pre-commitments, balancing construction costs, financing, and rental rates.

The pending JAO is being finalised by the DoF alongside the departments of Trade and Industry, and Transportation as well as bureaus of Customs (BoC) and Internal Revenue, the Philippine Ports Authority, the Maritime Industry Authority, and the Philippine Competition Commission. Finance Undersecretary Rolando T. Ligon, Jr. has said that the order could be signed once agencies finish submitting comments, noting that the DoF itself has signed the draft formulated with the BoC. “That was two weeks ago, we are waiting for their comments so that it can be enforced. We drafted it together with BoC, that is why it is okay for us in principle,” Mr. Ligon told reporters last week. Customs Commissioner Ariel F. Nepomuceno has cited container yard deficits, heavy import reliance, and opaque shipping fees as key drivers of harbour bottlenecks, warning that processing delays directly inflate logistics costs. “The challenge right now is congestion. That is why we are anticipating the formal approval of the JAO by all the Secretaries.”