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Thursday, August 17, 2017 | MANILA, PHILIPPINES
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Date posted: Friday, December 11, 2015 | Manila, Philippines

Transport, Storage and Communications

Cheap fuel triggers boom in travel

IT'S A GREAT TIME to travel. With oil prices dropping to lows not seen since the global financial crisis of 2008-2009, the transport sector has enjoyed a windfall.

In this year’s Top 1000 Corporations, Philippine Airlines, Inc. (PAL)symbolizes the benefits of an oil dividend. Fuel accounts for about a third of a carrier’s operating expenses.

The flag carrier posted its first operating profit in four years. Its gross revenue rose 83% to P100.99 billion, landing it on the 8th spot of this year’s ranking.

Travel picked up after aviation regulators ordered airlines to drop the fuel surcharge, which is passed on to passengers. PAL alone transported 9.6 million passengers on 73,685 flights, up from five million in 2013. This catapulted passenger revenue to P81.75 billion in 2014.


Sixty-nine transport, storage and communication firms made the cut in this year’s Top 1000 Corporations. Their combined gross revenue totaled P755.33 billion, up by 10.6% year on year.

Data from the Philippine Statistics Authority showed that the sector’s gross value added increased by 6.2% to P536.56 billion in 2014.

Transport and storage increased by 11.2% to P213.94 billion, faster than the previous year’s 7.7% growth. This was driven by a huge increase in air transport, which posted a double-digit growth of 18.4% against the previous year’s 3%.

Storage and services grew 20.3%, quicker than the 12.9% in 2013. The communications subsector, however, bucked the trend, contracting by 3.1% to P322.62 billion, reversing the 5% growth the previous year.

The Ayala-led Globe Telecom, Inc. takes the lead among telcos that made it to the annual ranking, after it grossed P92.62 billion, landing on 11th place this year. Smart Communications, Inc. made P89.72 billion to occupy the 13th spot. It was, however, the 2nd most profitable firm among the Top 1000 Corporations, after net income grew 9.6% to P26.61 billion.


The outlook for the transport, storage and communication sector has turned up as the government and the private sector ramp up investments to address bottlenecks.

In the case of the transport subsector, port congestion during the better part of 2014 crimped trade. While Manila’s main cargo ports have returned to normal, traffic on the streets of the Philippine capital is going from bad to worse, especially since cheap oil and ample liquidity have fueled a boom in car sales.

In the telecom subsector, broadband congestion brought about by rising demand for connectivity has led to cutbacks in unlimited data offerings. Amid unmet demand, major players in turn are cranking up capital expenditures.



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