Kota Kinabalu: Sabah manufacturers are looking to Zamboanga, Mindanao in the southwestern part of the Philippines to expand their market presence.
The Zamboangan Peninsular Region, often called the “gateway to the BIMP-EAGA” (Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area” due to its strategic location near Sabah makes for an ideal trading partner with Sabah.
Of particular interest are markets particularly of the chain of islands, closest to the eastern coast of Sabah, lying between Sulu Sea and Celebes Sea.
With an estimated population of 20 million, this archipelago is a lucrative market.
Its geographical proximity to Sabah’s eastern coast offers cost-advantages benefitting both Sabah manufacturers and Zamboanga, particularly the islanders.
A variety of Sabah products can be exported, such as rice, noodles, flour, sugar, cooking oils, beverages, hardware, and other daily necessities, the Federation of Malaysian Manufacturers (Sabah) said in a statement.
Informal barter trade has existed for a long time along sea routes connecting areas like Tawau in Sabah to Zamboanga.
A ferry with a 38-container capacity plying the Sandakan-Zamboanga route weekly is the sole transportation mode to move goods between Sandakan, Sabah to Zamboanga City Port. The islanders are, however, paying more due to extra shipping cost from Zamboanga to the various islands. Kumpit (non-conventional wooden ships) are used to move goods around the islands.
Access by Sabah manufacturers to the archipelago markets had long been restricted mainly due to safety concerns in the eastern part of Sabah, following security threats by armed groups and pirates from the southern Philippines.
These incidents have led to stringent security measures by Malaysian authorities, including the establishment of the Eastern Sabah Security Command (ESSCOM), a security agency, in 2013, and have deterred legitimate travel, trade and investment.
The aftermath of the Covid-19 saw restrictions barring barter trade and cross border movement.
FMM Sabah branch would hold discussions with relevant authorities to streamline maritime customs clearance procedures to facilitate smooth bilateral trade and enable goods to enter via maritime logistics channels, simplify maritime legal procedures, promote international security cooperation and improve customs supervision efficiency.
Existing east coast port facilities (Sandakan, Lahad Datu, Tawau) would be used to generate economic growth.
FMM would look into additional federal government tax incentives to east coast cities lacking infrastructure, encouraging SMEs to actively invest in development, enabling them to achieve profit growth targets more quickly and maintain a stronger competitive edge in the BIMP market.
