Philippines looks towards freight growth

PHILIPPINE AIRLINES (PAL) has received government approval to commence a massive outsourcing programme aimed at reducing costs.

The decision will affect the airline's cargo and ground handling, in-flight catering and call centre reservations units. The workforce will be reduced from 7,500 to 4,000, which is aimed at saving up to US$22 million per year, reports Companiesandmarkets.com.

Trade unions are expected to fight the cost cutting measures. Meanwhile, BMI forecasts an increase in volume at the Manila International Container Terminal (MICT) in 2010, up by 25.2 per cent compared to the previous year.

In real terms, the analysts expect the Philippines' total trade (imports plus exports) to recover this year, following a 8.8 per cent decline in 2009. "With the domestic economy performing ahead of expectations, we expect trade to increase by 9.6 per cent in 2010, making up for last year's setback," the report said.

"We still believe that the risks to our Philippines freight forecasts are to the downside. With the presidential election complete, political risk is reduced, but there is a question mark over the relationship between Aquino and congress.

"A deadlock would delay public and private investment decisions, with negative knock-on effects for growth. The second risk to monitor is the possibility of a greater than expected double-dip recession in China, which would mainly affect 2011's growth."
(Source:www.schednet.com)