Stuck in traffic
Plan to ease Philippine gridlock withers as appetite for cars outpaces public transport efforts.
Congestion was a major political issue in the 2016 Philippine presidential race, which President Rodrigo Duterte won partly on a promise to tackle it. But Filipinos expect the roads to become clogged further as Mr Duterte’s infrastructure projects encounter delays.
A fourth-quarter 2017 survey by FT Confidential Research of 1,000 urban respondents showed that 62% expect worse traffic in the next 12 months. While Metro Manila, made up of 17 municipalities and cities, is notorious for its gridlock, the survey showed that the bleak outlook for traffic is shared by respondents across major cities in the archipelago
Most Metro Manila residents were also dissatisfied with the quality of public transport. Drivers in Metro Manila are the most dissatisfied in the world, according to a 2017 survey by Waze, a traffic and navigation app, which considered factors such as road quality and safety as well as traffic density.
The situation is set to deteriorate because mass transit projects under the government’s “Build, Build, Build” infrastructure programme won’t be completed until at least next year, with delays possible. Although a number of road and bridge projects are due to be completed before that, these will do little to ease the traffic because car sales are surging — a result of rising incomes.
Official figures show that car sales reached an annual record in November 2017. Our Auto Purchase Index, which gauges car buying intentions for the next six months, equalled its highest record in the fourth quarter of 2017, suggesting car sales are set to remain strong in the first half of this year.
Over the past year, car sales were also spurred by the popularity of ride-sharing companies, which FT Confidential Research believes will continue despite regulatory challenges. A recent tax reform increased the levy on cars, but sales will remain strong as Filipinos opt for transport convenience. The same tax law increased take-home pay for the middle class, which will support car sales.
INFRASTRUCTURE DELAYS
All parts of the Philippines suffer with traffic congestion but for different reasons. Road density — the ratio of road-network length to total land area — is a problem for Metro Manila. There is very little space to build more roads. For other parts of the archipelago, where there is space, the required roads aren’t being built.
The Duterte administration has made developing regions outside Manila a priority — part of a plan to spread economic wealth — and the construction of new roads to carry agricultural commodities to the capital is one way it hopes to achieve this. Mr Duterte has also pledged to build a reliable public transport system.
His plan to accelerate the development of transport infrastructure with concessionary loans from foreign governments, however, has been held up. We have previously said that negotiations will drag on between the government and its donors, especially over large projects such as the railways in Luzon and the Visayas. These have a joint cost of 269 billion pesos (US$5.22 billion) and are to be financed by Japan and China respectively.
In the short term, this means the government must spend its own money on infrastructure, and it plans to release 35.3 billion pesos this year for Mindanao’s first railway. The project is supposed to be finished next year but we doubt this will happen given the size of the undertaking.
Delays could be caused by a shortage of manpower — the result of the construction boom — and there will be a temporary halt to public works from March 2019 until after the midterm elections in May that year, as prescribed by law.
The government also has a bad record when building rail systems. The dilapidated Metro Rail Transit 3 in Manila, which operates beyond its 500,000-passenger daily capacity, suffers regular breakdowns. Modernisation has been consistently hampered by ownership issues that prevent the private sector from taking over.
There is no sign at the moment, however, that public dissatisfaction with transport infrastructure will erode Mr Duterte’s popularity in the same way it did that of his predecessor. The war on drugs is now a more pressing political issue. This gives Mr Duterte time to address the crippling transport problems his country faces.
This article was first published by FT Confidential Research, an independent research service from The Financial
Times providing in-depth analysis of and statistical insights into China and Southeast Asia
In Metro Manila, there is very little space to build more roads. For other parts of the archipelago, where there is space, the required roads aren’t being built