SANDAKAN: The Sabah Government is studying a proposal to revive the once lucrative barter trade between Sabah and the southern Philippines, weighing its economic potential against longstanding security concerns.
Chief Minister Datuk Seri Hajiji Noor said the idea has resurfaced following increasing calls from various quarters, but stressed that no decision would be made without a thorough and comprehensive study.
“Right now we are studying it. Many parties have submitted proposals. All aspects will be taken into account, especially in terms of security and its benefits to our state economy and traders,” he said, during his working visit in Pulau Langkayan, Tuesday.
Hajiji said the matter would be tabled at both the State Security Council and the State Development Action Council, underscoring the need to balance economic opportunities with security priorities.
Sungai Manila Assemblyman Datuk Hazem Mubarak Musa urged the Government to reconsider the system as a way to revive Sandakan’s economy during last week’s state assembly sitting.
He said the mechanism could attract investors and stimulate wider economic activity, not only in Sandakan but across Sabah, suggesting that operations be centred in Sandakan, particularly within the Sandakan Industrial Park, to enable better monitoring while maximising local benefits.
Barter trade has deep historical roots in Sabah, with trading activities between the state and nearby regions of Indonesia and the Philippines dating back to the late 1940s, with barter boats also calling at Labuan.
The practice was formally recognised as “barter trade” in 1993, with traders crossing maritime borders to exchange goods.
At the time, only ports in three districts in Sabah were allowed to carry out cross-border trade, namely Kudat, Sandakan and Tawau. Of the three, only Tawau traded with both Indonesia and the Philippines, while Kudat and Sandakan were limited to routes with the Philippines due to proximity.
However, the activity was suspended in 2016 following heightened security concerns along Sabah’s east coast. At the time, the state government shut down cross-border barter trade at eastern entry points as part of a broader crackdown on kidnapping-for-ransom groups operating in the southern Philippines.
Then Chief Minister Tun Musa Aman ordered the immediate cessation of the decades-old trade in Sandakan and other east coast towns after a series of abductions, including the kidnapping of four Malaysian sailors near Pulau Ligitan.
The barter trade system was later revived in stages in 2018 under the Warisan Sabah administration led by Datuk Seri Shafie Apdal, with tighter controls and designated routes, although it was not fully reinstated and was later suspended again during the Covid-19 pandemic.”
The move formed part of wider security measures, including tighter sea curfews, the suspension of certain transhipment activities and stricter enforcement against vessels breaching maritime laws.
With the proposal now back under consideration, Hajiji stressed that any revival must not compromise Sabah’s security, particularly in the Eastern Sabah Safety Zone, where enforcement agencies continue to maintain vigilance.
