Kota Kinabalu: Traders and businessmen from Mindanao continue to rely on Tawau as a vital transshipment hub, even as the region transitions from traditional barter systems to modern, regulated commercial shipping.
BIMP-EAGA Country Director for the Philippines, Popoy Lauddin confirmed that entrepreneurs from the BaSulTa region (Basilan, Sulu, and Tawi-Tawi) are increasingly using Tawau to sustain centuries-old economic ties.
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“Majority of our 100 registered barter trader members are using Tawau as a strategic transshipment point,” Lauddin said.
“This ensures the steady flow of essential goods – such as Malaysian consumer products, Vietnamese rice, and Thai flour – into the Southern Philippines.”
Lauddin also welcomed the Sabah government’s plans to revive official barter trade, expressing optimism that such a move would boost economic revenue for both Malaysia and the Philippines while improving the livelihoods of coastal residents.
The economic landscape is currently at a turning point. This week, the Sabah state government launched a high-level review of proposals to fully reinstate barter trade.
Chief Minister Datuk Seri Hajiji Noor emphasised that while revitalizing coastal towns like Sandakan and Tawau is a priority, it must be balanced with stringent security protocols within the Eastern Sabah Security Zone (ESSZONE).
Parallel to this, the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) recently secured a regulatory milestone.
The issuance of Customs Memorandum Circular 13-2026 officially recognizes the Bangsamoro Barter Trade Council (BBTC) guidelines, allowing informal traders to register as legitimate importers and exporters.
The transition is being backed by significant infrastructure investment. In Tawau, RM70 million is being channeled into port upgrades, including new quay cranes and digitized cargo tracking systems.
Meanwhile, the Sapangar Bay Container Port is being positioned as a premier regional hub through a partnership between Sabah Ports and DP World.
The facility is expected to reach a capacity of 1.25 million TEUs by year-end, offering BaSulTa traders more scalable shipping options. The push for modernisation is driven by local economic pressure.
Leaders in Sandakan and Tawau have raised concerns over “economic stagnation” in communities that historically thrived on regional exchange. Furthermore, provinces like Tawi-Tawi remain heavily dependent on Malaysian goods.
A formalised, legal trade route is viewed as the most effective way to lower the cost of living for island residents while ensuring maritime security and tax compliance for both nations.
As new maritime corridors link Brunei, Sabah, and the Southern Philippines, the traditional barter system is not disappearing – it is being reborn as a sophisticated component of modern Southeast Asian trade.
