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Noriel Christopher C.

Tiglao Associate Professor, UP-NCPAG Director, CPED

Investment in Transport
Transport infrastructure investment of the national government and government owned and/or controlled corporations (GOCCs) was highest in 1999 at 1.3% of GDP; the ratio fell to 0.4% in 2000, before reaching 0.8% in 2008 (against a government target of 5%).

Source:DraftNationalTransportPlan,14Dec.2009

Public Investments in the Transport Sector, by Annual Expenditures, Percentage of GDP and Percentage of Infrastructure Program, 1997-2007

Source:DraftSituationalAnalysisReport,April2009

2009 Infrastructure Towards Development


REGION 1

Roads, Bridges, Farm to Market Roads, School Buildings , Classrooms, Flood Control, ports and Airports
NCR

P4.1 Billion
REGION 2

P3.7 Billion
Metro Manila

P4.1 Billion
CAR

REGION 5 REGION 6

P7.6 Billion P5.5 Billion


REGION 3

P5.2 Billion
REGION 7

P9.1 Billion
REGION 4-A

P3.9 Billion
REGION 8

P6.9 Billion
REGION 4-B

P8.7 Billion
REGION 13 REGION 9

P2.8 Billion

P5.2 Billion P6.2 Billion


REGION 11 REGION 10

P4.7 Billion

REGION 12

P1.8 Billion

P6.8 Billion

2005-2010
Appropriate spatial framework for sectoral development

North Luzon Metro Luzon Urban Beltway Central Philippines

Cyber Super Region

Super Region Strategy

Mindanao

NORTH LUZON AGRIBUSINESS QUADRANGLE


Being the food basket of Luzon and Metro Manila, with its agriculture and mariculture development, the region can further boost its investment climate. This can be done by reducing the cost of transporting goods and addressing social development concerns by mobilizing local resources and networks to facilitate the implementation of National Governments projects.

Itbayat, Batanes
BATANES

Basco, Batanes

ILOCOS NORTE APAYAO CAGAYAN

Port Irene
Northern Cagayan Airport

Salomague Seaport

ABRA KALINGA ILOCOS SUR MOUNTAIN PROVINCE IFUGAO NUEVA VIZCAYA ISABELA

San Fernando (Poro Point Intl.) Airport Alaminos Airport


Airports Total (Components) = 21 Ports Total (Components) = 6

LA UNION BENGUET

Bagabag, Nueva Vizcaya


QUIRINO NORTH Casiguran, AURORA

Aurora

PANGASINAN NORTH NORTH ZAMBALES TARLAC

NORTH NUEVA ECIJA

Dingalan Port, Aurora

LUZON URBAN BELTWAY

DMIA, Clark Subic Bay Seaport

South Tarlac

South Aurora South Nueva Ecija

NAIA Terminal 3
Polillo Is.

One of the primary thrusts of the region is to decongest Metro by expanding the public transport system. The efficient movement and seamless access of goods and people will lead to a globally competitive Urban Beltway. To achieve this goal, the National Government is continuously developing the Clark-Subic Corridor, Southern Luzon Corridor, and Metro Manila, and is addressing critical infrastructure bottlenecks along national roads and bridges to speed traffic out of Metro Manila.
RAIL PROJECTS: EDSA North Transit (Closing the Loop) LRT Line 1 South Ext. (Baclaran to Cavite) LRT Line 2, Phase 2 (East Ext. to Masinag) Northrail-Southrail Linkage, Phase I (Caloocan to Alabang) Northrail-Southrail Linkage, Phase 2 (Alabang to Calamba) Northrail Project Phase 1, Sections 1 & 2 (Caloocan to Malolos to Clark) MRT 7 MRT 3 CAPEX

South Pampanga Zambales Bulacan Bataan NCR Rizal

Lucena Port
Cavite Laguna Quezon Batangas

Batangas Port
Or. Mindoro Occ. Mindoro

Marinduque

Cawit Port

Airports Total (Components) = 5 Ports Total (Components) =8 Railways Total (Components) = 9

Through efficient transportation facilities like road links, RORO/boat links, feeder airports, airstrips and ports for hard-to-reach areas, the region opens and promotes itself as the countrys tourism center. The cost of doing business in the region can be reduced by improving ports and airport facilities to accommodate increasing passenger and cargo traffic. Consequently, the region will be able to develop its agribusiness, small and medium enterprises (SMEs), and export potentials.
Busuanga Airport San Vicente Airport

Camarines Norte
Southern Luzon Intl.Airport

Camarines Sur Pantao Port Albay


Claveria Port

Catanduanes

San Jose (Carabao Is.)Airport

Southrail Project Ph1B & Ph II

Kalibo Airport

Sorsogon
Bulan Airport

North Samar
Aroroy Port

Masbate

Guiuan Airport

Iloilo Airport

Aklan

Cawayan Port San Pascual Port

Samar Eastern Maripipi Port Samar Biliran


Naval Port

Capiz Antique
Puerto Princesa Airport Bacolod (Silay) Airport

Iloilo

Leyte

Tacloban Airport

Bogo, Santander & Daannbantayn Ports

Guimaras Negros Occ.

Cebu

Maasin Port

Palawan

Sibunag Port
Kabankalan Airport

Ubay Port

Southern LeyteLimasawa Port


Balbagon PortSiargao
Siargao Airport

Bohol Port Jagna


Guinsiliban Port

Negros Or.
Dumaguete Airport

Camiguin

Siquijor Port

Siquijor

Dapitan
Balabac Airport

Panglao Airport

Central Philippines

Airports Total (Components) = 85 Ports Total (Components) = 22 Railways Total (Components) = 2

Mindanao Infrastructure Development


Aims to establish an efficient food logistics system that links Mindanao to Manila. Farmto-market roads will link food production areas with major roads leading to the market, while regional and municipal ports with improved facilities will boost fishery development
MAMBAJAOJAGNA RORO DIPOLOG DUMAGUETERORO
Misamis Occidental Camiguin

SURIGAOCITYLILOANRORO
Surigao del Norte

Surigao City

Agusan del Norte

EasternNautical Highway
CORTESTANDAGMARIHATAG

Butuan City

Dipolog City
Zamboanga del Norte

Misamis Oriental

Surigao del Sur

Ozamis City

WesternNauticalHighway


Basilan

Ipil

Pagadian City

CentralNauticalHighway
Zamboanga del Sur


Lanao del Norte

Cagayan de Oro City

Agusan del Sur

MARIHATAG HINATUAN BISLIGSECTION

Iligan City

Bukidnon

Lanao del Sur North Cotabato

ZamboangaSta.MariaRORO

Zamboanga Sibugay

Cotabato City

Zamboanga City

ZamboangaLamitanRORO

Palimbang
Sulu


Kabacan Tacurong
Sultan Kudarat

Davao Maramagdel Norte

Compostela Valley

Tagum City Davao City

Mati

Koronadal

Davao Oriental

South Cotabato

Maitum

Gen. SantosDavao City del Sur

ZamboangaBongaoRORO ZamboangaSiasiRORO

Sarangani

Tawi-Tawi

Airports Total SourceofBasicData:DPWH,CAAP,PPA (Components) = 67 Ports Total (Components) =4

STRONG REPUBLIC NAUTICAL HIGHWAY

PAN PHILIPPINE HIGHWAY

WESTERN NAUTICAL HIGHWAY

EASTERN NAUTICAL HIGHWAY

CENTRAL NAUTICAL HIGHWAY

Sub-Sector Performance

Road Transport

Trends in Motorization - Metro Manila (for hire)


80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 2000 Cars 2001 2002 2003 Trucks 2004 PUB 2005 MC/TC 2006 Trailers 2007

PUJ/UV

2000 Cars PUJ/UV Trucks PUB MC/TC Trailers Total 54,054 56,484 6,657 11,287 54,058 1,141 183,681

2001 36,181 39,401 5,599 8,232 51,968 853 142,234

2002 44,119 58,964 7,072 11,251 54,306 1,182 176,894

2003 37,542 54,580 5,587 8,413 55,471 1,005 162,598

2004 37,369 66,843 6,624 10,754 61,173 985 183,748

2005 31,666 64,412 6,270 9,285 67,098 1,514 180,245

2006 27,546 62,444 5,467 7,623 65,971 995 170,046

2007 25,266 65,952 5,138 7,341 62,171 2,922 168,790

Source: LTO

Trends in Motorization - Nationwide (for hire)


600,000 550,000 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 2000 2001 2002 2003 2004 2005 2006 2007

Cars

PUJ/UV

Trucks

PUB

MC/TC

Trailers

Cars PUJ/UV Trucks PUB MC/TC Trailers Total

2000 69,464 183,055 17,991 29,833 491,113 2,843 794,299

2001 40,908 188,897 17,032 27,632 517,087 2,467 794,023

2002 45,161 216,717 18,306 30,069 537,811 2,798 850,862

2003 43,128 212,968 16,872 26,987 527,561 3,144 830,660

2004 51,889 228,260 18,229 28,644 555,340 2,564 884,926

2005 44,585 222,094 17,325 25,992 584,698 3,183 897,877

2006 41,061 212,620 18,144 24,118 588,695 2,312 886,950

2007 37,648 215,529 16,919 23,142 591,254 2,475 886,967

Source: LTO

Nationwide Motor Vehicle Registration, 2006-2008


7,000,000 6,000,000 5,000,000 Number of Units 4,000,000 3,000,000 2,000,000 1,000,000 0 2006 Year Cars
Source: Land Transportation Office (LTO)

2007

2008

UV

SUV

Truck

Buses

MC/TC

Trailer

Road Transport
Traffic on the Roads
In 2006, approximately 1.7 billion passengers and 25.9 million tons of freight were conveyed by roads - representing a 98% share in passenger traffic and a 58% share in cargo traffic. Number of motor vehicles grew by 6.0% annually from 2000 to 2008 to reach 5.9 million vehicles, or 7 vehicles for every 100 persons. Until 2004, utility vehicles were dominant, accounting for 41.8% of the total fleet of motorized vehicles. In 2005 onwards, the composition changed as motorcycles and tricycles increased more rapidly than the other vehicle types, now accounting for almost half of all vehicles on roads. A total of 5.9 million motor vehicles were registered in the country in 2008, including trailers of the total vehicle population in 2008, close to 2 million were motorcycles and tricycles, which recorded a substantial annual growth at 11.6%. On the other hand, the number of buses used for public transport is declining at an average rate of 1.6% a year.
Source:DraftNationalTransportPlan,14Dec.2009

Road Transport
The road network has improved, but is still lagging
As of the end of 2008, the Philippine road network had a total length of 205,778 km. National Roads accounted for 29,650 km or 14.4%, Provincial Roads 15.2%, City Roads 3.4%, Municipal Roads 7.7 %, and Barangay Roads 59.3%. The national roads, about 72% are paved with concrete and/or asphalt. For local roads, only about 22% (or 44,000 km) are paved, while the rest are gravel-surfaced and earth roads. The countrys road density is by 0.22 km of paved road per sq. km. of land area and 0.73 km of paved road per 1,000 population. In 2001 to 2008, the percentage of paved National Roads increased marginally, from 70.7% to 73.1%. Over the same period, the percentage of paved National Roads in good and fair condition (using the Visual Condition Rating) improved from 47% to 54.8%. As of the end of 2006, the average International Roughness Index (IRI) of National Roads was measured at 6.8, which is in the poor category.
Source:DraftNationalTransportPlan,14Dec.2009

Road Transport
Comparison of Road Indices with Other Countries
Paved Ratio % Country Japan Vietnam Indonesia Thailand Malaysia Philippines Total km 1,193,000 251,787 372,929 217,708 77,695 205,778 Natl Roads All Roads 79.0 32.2 55.3 82.0 76.3 21.0 73.0 97.2 71 Km per 1,000 km2 land area 3,194.2 682.9 214.1 424.3 298.9 685.9 Km per 10,000 population

94.0 25.8 16.5 38.4 36.3 22.4

Sources: Compiled from CIA Factbook, DPWH, ASEAN and UNESCAP Yearbooks

Road Transport
Reforms in Governance LGUs assuming full responsibility for financing and management of local roads, with the DPWH focusing on about 28,000 km of strategic national roads; Establishment of a National Highway Authority; Shifting road investments to regions with less density and lower road quality, with Mindanao getting a larger share Wider implementation of RIMMS in 9 business processes of DPWH. Not much has been achieved in these four areas.

Source:DraftNationalTransportPlan,14Dec.2009

Road Transport
Road Safety
The national cost of traffic accidents for the Philippines was estimated at US$1.9 billion (or roughly 2.8% of the country's GDP). In the first three months of 2009 alone, the Philippine National Police has recorded more than 9,000 vehicular accidents compared to the historical average of less than 4,000 and a record-high of 14,794 for the whole of 2008. In terms of fatalities, traffic accidents average 2 fatalities for every 10 accidents (compared to an average of 6 fatalities for every 10 maritime accidents). In terms of number fatalities per million vehicles, the Philippines recorded a better result at 215, against Malaysia (373), Singapore (250), Indonesia (261), Thailand (488), and Vietnam (558).
Source:DraftNationalTransportPlan,14Dec.2009

Road Transport
Road Accident Rates in Selected Countries

Source:DraftNationalTransportPlan,14Dec.2009

Road Transport
Motor Vehicle Users Charge (MVUC)
Revenues from the Motor Vehicle Users Charge (MVUC) collections have increased from PhP6.65 billion in 2004 to PhP8.05 billion in 2006. As of November 12, 2007, the Road Board has a total available fund of PhP6.82 billion. There has also been a significant increase in the release of funds - from PhP4.92 billion in 2004 to PhP11.55 billion in 2006. The funds were used for maintaining national, provincial and city roads nationwide, improving drainage, and installing adequate traffic light, road safety and pollution monitoring devices.

Road Transport
MV Inspection and Maintenance
The development of motor vehicle inspection facilities in the Philippines started in the early 1980s when the DOTC/LTO, in collaboration with the Japan International Cooperation Agency (JICA), introduced the first Motor Vehicle Inspection System (MVIS) in the country. The plan envisaged the establishment of computerized motor vehicle inspection stations all over the country. The plan called for at least one station to be operational in each region by 1990 to evaluate the roadworthiness of vehicles prior to registration. In 1985, the pilot MVIS was established at the LTO Compound in Quezon City. With its limited capacity, it performed the inspection of taxis in Metro Manila. In 1992, twelve (12) MVIS lanes were donated to the LTO by the Japanese government and were installed in Luzon: Metro Manila, (North MVIS & South MVIS with 4 lanes each), San Fernando, Pampanga (2 lanes), and Lipa City, Batangas (2 lanes). Through time, however, these MVIS facilities have deteriorated due to inability of the government to provide full resources for upkeep of the system.

Road Transport
MV Inspection and Maintenance
In 2006, revived the full utility of the existing MVIS facilities in view of the continuing deterioration of air quality in mega cities, using the Motor Vehicle User Charges (MVUC). The first phase of the plan, which is ongoing, covers the following urban centers: Metro Manila (North and South), Lipa, Pampanga, Cebu, and Davao Cities. There are 4 other phases which will eventually cover all regional sites in the country. The current facilities in North & South Metro Manila, Davao, Cebu and Lipa, are being operated by the LTO Regional Offices, as part of their regular regional operations. Once improved/expanded/rehabilitated, these MVIS facilities are planned by the DOTC and LTO to be continuously managed, operated, and maintained by the Philippine government through the Regional LTOs.

Road Transport
MV Inspection and Maintenance
The preference by DOTC for a business-as-usual scenario of the improved MVIS facilities may be rooted in the need for a painless transition. Perceived disadvantages of the current setup are the difficulty in effecting new and improved procedures and performance standards. A privatization option is not being ruled out. In 2005-2006, the DOTC evaluated a couple of privatization schemes, which are cited in studies done by the USTDA (2004) and ADB (2005). Vehicle testing for both emissions compliance and roadworthiness is conducted in the MVIS centers/facilities or the private emission testing centers (PETCs), as part of the overall motor vehicle registration process under the current LTO setup.

Road Transport
Government Agencies Involved in Implementation of a national Motor Vehicle Inspection and Maintenance program
Functions Progress Lead Agency

MV & Fuel Standards Development MV Emissions Testing MV Roadworthiness Testing Roadside Inspection to enforce emission standards e.g Anti-Smoke belching MV Maintenance & Repair Program Accreditation of MV repair shops and private emission testing centers Authorization and performance monitoring of private emission testing centers

Ongoing; DTI has organized TWGs for standards formulation Ongoing, through MVIS & PETCs Ongoing, through the MVIS Ongoing, through LTO, deputized units (DENR & LGUs); LGUs with ordinances Voluntary basis by MV owners/PUV operators Ongoing

DTI DOTC-LTO LTO LTO

None yet DTI

Ongoing

DOTC

Road Transport

Road Transport
AirQualityinMetroManila

70% of the air pollution in Sources: Department of Environment and Natural Resources Environmental Management Bureau, Philippines (DENR-EMB), DENR National Capital Metro Manila is attributed Region, Philippines (DENR-NCR) and Partnership for Clean Air (PCA) to transport
28

TSP Concentration Road Traffic-Related Monitoring Stations

29

Road Transport
EconomicCostsofAirPollutioninKeyCities

Cost of pollution as a percentage of income ranges from 2.5% to 6.1% About 2,000 people die each year as a result of exposure to PM10. The model estimates an economic loss of about US$140 million About 9,000 people in these places suffer from chronic bronchitis. The model estimates an economic loss of about US$120 million Number of people suffering from PM10 related respiratory symptoms is quite high. The model estimates an economic loss of about US$170 million

Total economic cost of PM10 exposure in these

four places: US$430 million


30

Modeling by the World Bank on the effects of PM10 in Metro Manila, Davao, Cebu and Baguio Source: http://www.adb.org/Vehicle-Emissions/phi/health.asp

Road Transport
Energy Consumption in Road Transport
The current estimate of the countrys on-road fuel economy is 14 liters/100 kilometers, way below Chinas rate of 9.5 liters/100 kilometers. The transport energy use in the Philippines has increased significantly from 1.9 MTOE in 1980 to 10.9 MTOE in 2008, about 6.4% per year. Over that same period, vehicle population expanded at 6%; while the global average energy use in transport grew by only 2.7%. With all the energy derived from petroleum (where the transport sector accounts for 65.6% of total oil consumption), increases in future transport energy use will translate into bigger emissions of carbon.

Source:DraftNationalTransportPlan,14Dec.2009

Road Transport

Source:DepartmentofEnergy(DOE)

Road Transport
The Road Users Viewpoint
A survey conducted by Bantay Lansangan (560 random samples of road users) showed a 25% satisfaction rating.
Road Users Perception
Criteria 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Overall rating of road services Road safety Flow of traffic Road surface Overall bridge condition Maintenance Overall performance of DPWH Integrity level of DPWH Sincerity in fighting corruption DPWH meets concerns of the community Satisfied % 59.5 41.8 69.2 65.4 68.4 35.0 48.0 91.4 38.2 88.9 66.7 Dissatisfied % 34.9 32.9 26.2 31.0 31.6 33.0 38.3 8.6 42.3 11.1 33.3 Net Satisfaction Rating +25 +9 +43 +34 +37 +2 +10 -83 -4 +78 +33

11. DPWH practices transparency


Source: Roadwatch Survey, 2008

According to the first Road Sector Status Report Card (RSSRC), dated September 2009, prepared by Bantay Lansangan, the average road user cost in 2007 was PhP 21.17 per vehicle-km, which is 41% more than the optimal road user cost of PhP 15.17. The road user cost in 2007 was slightly higher than the PhP 21.13 in 2006.

Maritime Transport

Maritime Transport
Sea Traffic Cargo throughput for the period 1999-2008 hovered around 140 to 160 million tons per year. It registered a high of almost 157.5 million tons in 2007, and then dropped again to below 150 million tons in 2008. Attributing the fall to the global financial crisis of 2008 may not be the only explanation, given the countrys relatively low integration with global trade.

Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport

Cargo Traffic, 1999-2008 Domestic cargo traffic showed a more dramatic decline during the same period. The volume of domestic cargo handled in 2008 was even less than the volume in 1999. This could be due to a change in recording, since RORO traffic is not captured by the PPA data. Foreign cargo continued to grow, with an 8-year average of 4.8% per year punctuated by a drop in 2008. The decline was felt more in private ports, which posted an 18% drop. The private ports in Cagayan de Oro suffered the most as its foreign cargo throughput in 2008 was just a little over one million tons compared to more than twelve million tons in 2006.

Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport
A declining trend is apparent. From a peak of 24.6 million passengers in 2003, traffic dropped to 21.4 million in 2008, or 4% lower than 2007. While the figures are for PPA ports only and do not capture the more numerous small and feeder ports, they are reflective of the overall situation in the traditional port system of the country.

Passenger Traffic, 1999-2008

The drop in passenger traffic is more dramatic in the Port of Manila from 3.4 million in 2001 to 2.3 million in 2008. Foreign container traffic has continued to grow from 1.75 million to 2.52 million TEUs, or 6% p.a. over the last six years. In contrast, usage of containers on the domestic trade declined by 3% during the same period.
Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport
Sea Port System
There are more than 1,490 seaports in the Philippines, classified as commercial, fishing, and feeder ports. The public common-user ports totalled 331 (or 40% of the commercial category) as of 1997, the ports of importance in the domestic and international trade are those owned and operated by PPA and CPA. In the last eight years, new port capacities and facilities were provided in Batangas Port (which was intended to provide relief to Manila Port), Subic Container Terminal Port (an alternative to Manila), and in Phividecs MICT (an alternative to Cagayan de Oro).

Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport

Aids to Sea Navigation


There are 561 lighthouses distributed throughout the coastline of the country. Out of this number, two are operated by private owners. Many of these facilities have been built in the last 8 years through financial and technical assistance from Japan (MSIP I and MSIP B), the United Kingdom (MSIP II) and Spain (MSIP III).

Source:DraftNationalTransportPlan,14Dec.2009

Maritime Trunk Routes

Maritime Transport
Level of Investments The cumulative investments of PPA in the last 10 years reached about Php24 Billion, or an average of Php2.4 billion annually. PPAs single biggest project is the Port of Batangas Development Project already in Phase II and ODA-funded by JBIC (now JICA). The total investment for this project amounted to almost Php8 billion. In addition, the development of small municipal ports, deemed socially-important, yet mostly non-viable. The aggregate investment for these port projects totalled PhP 3.7billion from 2000 2009.
Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport
Investments in Ports Projects
2000 PPA Budget Manila/N Luzon S Luzon Visayas N Mindanao S Mindanao Batangas Total PPA DOTC Budget Locally Funded Foreign Assisted Total DOTC Total All Ports % of GDP 12.6 65.1 287.0 68.8 232.8 15.0 681.3 364.9 306.0 670.9 2001 21.4 79.5 2002 138.1 2003 171.8 202.0 2004 562.4 359.2 2005 33.8 680.6 2006 199.1 221.5 2007 270.6 780.2 2008 233.2 442.8 2009 115.4 702.0

410.5 297.3 523.5 320.3 497.4 586.2 780.0 905.6 453.6 141.0 159.6 187.8 261.9 23.2 277.1 530.7 1,189.3 549.4 16.0 90.4 181.1 99.8 64.5 10.1 514.2 1,120.8 486.9 159.4 701.6 831.7 1,276.5 1,414.6 892.2 2,221.3 199.4 2.8 827.9 1,387.0 2,098.0 2,880.1 2,714.1 2,186.1 5,097.0 4,091.1 2,310.0 43.0 264.0 307.0 135.5 355.0 490.5 79.8 288.4 368.2 19.0 259.4 278.4 84.5 84.5 84.5 100.6 185.1 193.0 150.2 343.2 366.0 48.4 414.4 595.7 595.7

1,352.2 1,134.9 1,877.5 2,466.2 3,158.5 2,798.6 2,371.2 5,440.2 4,505.2 2,905.7 0.04% 0.03% 0.05% 0.06% 0.06% 0.05% 0.04% 0.08% 0.06% 0.04%

Sources: PPA and DOTC

Maritime Transport
The Nautical Highway
From 63 RORO-capable ports in 2002 when the Strong Republic Nautical Highway Project (SRNH) was launched, the Road-ROROTerminal System (RRTS) development during the last five years has brought to 100 the number of ports equipped with RORO ramps (18 base ports, 55 terminal ports, and 27 municipal ports) or close to 65% of the target 155 ports for RORO port improvement. The development of RORO routes in the country expanded the coverage of bus and truck services to inter-island connections, thereby increasing the overall average distance traveled by these types of vehicles. Recent studies on interregional passenger and freight flows indicated that vehicle kilometers traveled for cars, provincial buses and trucks have increased by as much as 20% since 2000. The RORO routes comprise 919 kilometer (land) and 137 nautical miles (sea) that connect Luzon to Mindanao through several islands in the Visayas. One government report claimed a travel cost reduction by 37% to 43% for passengers and 24% to 34% for cargo, compared to both conventional sea and air travel; and travel time savings of 10 to 12 hours compared to ordinary sea travel.
Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport
Domestic Shipping
In an inventory of routes and vessels in 1999, 16 of the 53 shipping companies were formed after 1992. Of the 75 companies operating before 1992, only 49% remained in operation by 1999. The quality of cargo services has improved as a result of more choices of carriers, the introduction of RORO vessels, and increased containerization. Competition on tertiary routes, however, has not intensified despite liberalized entry. In these routes, service quality is still poor due to the prevalence of old wooden-hull vessels. The quality of passenger service has shown dramatic improvements in the primary and secondary routes. New facilities and amenities were introduced on board while passenger accommodation and ticketing and booking facilities were upgraded. Fast craft ferries became popular on the secondary routes in the Visayas seas, due to its shorter travel time. However, the operations could not be sustained due to oversupply and high cost of operations.
Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport
Domestic Shipping
In 2004 study of the domestic shipping industry concluded that the industry is highly concentrated, in the sense that the top five operators accounted for more than 90% of the passenger and freight volumes. Those operators were also found in most of the primary routes; in about 50% of these routes, there was only one service provider. Competition is even weaker on the secondary and tertiary routes, where 59%, or, respectively, 78%, have only one provider. MARINA has kept the third class passenger tariff intentionally low, at below cost, because the users are mostly from the low-income brackets. They constitute about 70% of the total traffic. As a result, passenger operations are cross-subsidized by cargo service in cases where a shipping line provides both services or operated combined cargo-passenger vessels.

Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport
Selected Performance Indicators in Ports, Shipping and Logistics
Indicator Stevedoring rates (per 20 TCL) Philippines Other Countries $26.24 in Calcutta; $36.50 in Busan $48,509 in Jakarta $99,419 in Singapore; $34,163 in Bangkok; $40,818 in Saigon Port; $129,026 in Hongkong Hongkong=470; Singapore=239; Bangkok =345; Jakarta=410

$62.37 in North Harbor, ~$40 in MICT Port tariff (1,100 TEU class ship) $32,437 in Manila Logistics Cost for Export ($/TEU, Manila = $384 inclusive of trucking, customs clearance, terminal costs, miscellaneous fees) Cargo handling charges ($/TEU) Manila= $40 to $60

Calcutta= 133; Busan = 82.80; Hongkong = Hongkong =141.20; Shanghai= 74.90; Belawang (Indonesia) = 81.00

Source: PPA and UNESCAP

PPA is assured of continuing increase in its share of cargo-handling revenues. Shipping companies do not find their longer stay in ports expensive, since wharfage and dockage remained low, while some of them have ventured into the lucrative port-side business. The cargo handlers have received periodic increases in their tariff ranging from 35% to 90% per year. The cargo handling cost have become a significant slice of total sea transport cost - ranging from 29% to 46% for break-bulk cargoes, and from 10% to 43% for containerized cargoes. Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport
Route Manila-Cebu Manila-Davao Manila-Zamboanga Cebu-General $/TEU 399 654 387 283 Voyage Time (hrs) 20 36 33 10 Route to Singapore Hong Kong Klang, Malaysia Busan, Korea Long Beach/LA Tokyo Taiwan Sydney Antwerp Freight $/TEU 550 350 600 850 1,985 780 350 850 950 Voyage Time (in hours) 96 48 144 120 408 20 48 288 888

Note: Rates port-to-port, discounted for volume shipments. Source: WGA, Cebu Ferries

Inefficiency has been an even greater problem for interisland shipments, where unit costs are high and transit times, including time in port

Rates port-to-port, discounted for volume shipments. Source: Direct Container Line Phils

The international freight rates are higher due to the need for transhipment, but not unreasonable

The shipping cost differential between the domestic and international routes is due more to a difference in economic structure, than to port inefficiencies. The average vessel size in domestic shipping is less than 1,000 GRT against the 10,000 GRT average for ocean-going vessels. The one-day dockage and usage fee for a 10,000 GRT vessel in a Philippine port is less than the 12 hours charge in most Asian ports. Given the relatively small vessel size, it is not surprising that inter-island shipping costs are relatively high. The relatively long turnaround times in the domestic ports and their limited capacity offset any potential savings in capital costs most interisland vessels being fully written off- and due to low crew costs.
Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport
Safety
The maritime sub-sectors record is alarming with an average of more than 200 accidents per year over the last decade.
Maritime Accidents
Year 2000 2001 2002 2003 2004 2005 2006 2007 & later
Source: Philippine Coast Guard

Number of Incidents 151 168 152 255 227 122 114

Fatalities 177 59 73 74 144 25 62

Accidents ML Anahada (124 dead + 14 missing); MV Carmella in April 2002 (30 dead) MV San Nicolas (43 dead + 21 missing) Superferry 14 bombed in Feb 2004 (116 dead)

Princess of the Stars capsized in June 2008 (312dead + 461missing), MV Baleno 9, MV Catalyn B

Maritime Incident and Lives Lost in 2008

Source: World Casualty Statistics 2008

Maritime Transport
Safety Maritime safety and security measures are being implemented in the domestic trade in compliance with the International Safety Management (ISM) and the National Safety Management (NSM) codes. Compliance with Rule VI of RA No. 9295, An Act Promoting the Development of the Philippine Domestic Shipping, Shipbuilding, Ship Repair and Ship Breaking, Ordaining Reforms in Government Policies Towards Shipping in the Philippines, and for Other Purposes, is also being monitored. The Japan International Cooperation Agency (JICA)-assisted Project Enhancement of Ship Inspection was likewise completed in 2005. Under the project, trainings/seminars on the enhanced Ship Safety Inspection System (SSIS) were conducted with Maritime Industry Authority (MARINA) and Philippine Coast Guard (PCG) inspectors as participants. The PCG has enhanced ship inspection with an annual average of 307,780 Mandatory Pre-Departure Inspections (MPDI), 627 Emergency Readiness Evaluations (ERE), 627 Port State Control Inspections (PSCI), 1,353 Flag State Control Inspections (FSCI), and 32,485 Safety of Life at Sea (SOLAS) Compliance Inspections.

Maritime Transport
Safety In 2005, a Study on Wooden-Hulled Ships (WHS) was completed, which recommended standards, rules, and regulations for the continued operation of existing WHS and the construction, safety, and operation of new WHS. Through RA 9295 and its IRR, a Mandatory Vessel Retirement Program (MVRP) shall be implemented to modernize domestic ships by retiring all unclassed ships and retiring or replacing ships that have already reached the maximum allowable age as stipulated under the program. The program will be facilitated by establishing a viable financing scheme to support local construction of needed vessels. Under EO 588, Strengthening the Philippine Shipbuilding and Ship Repair (SBSR) Sector and Instituting Measures to Promote Its Growth and Development issued on December 8, 2006, the MARINA, in coordination with the interagency Ad-Hoc Committee and Technical Working Group, completed the Comprehensive Development Plan for the Philippine Shipbuilding and Ship Repair Industry on October 16, 2007.

Maritime Transport
Safety The target to reduce maritime accidents by at least 50 percent by 2010 has been exceeded as of third quarter 2007, with only 40 recorded maritime accidents compared with the 227 accidents recorded in 2004 despite increased maritime traffic due to the development of the RORO system. With respect to compliance with international safety standards, adherence is being implemented by adopting the International Ship and Port Facility Security (ISPS) Code. A Vessel Traffic Management System (VTMS) has been installed in the Port of Manila to comply with security provisions of the Code. There are also plans to install the system in other major ports across the country.

Maritime Transport
Institutional Strengthening
Roll-On-Roll-Off (RORO System)
From 2004 to 2007, government worked to provide the needed transport infrastructure that complements the roll-on roll-off (RORO) system and opens up new economic opportunities, reduces transportation and transaction costs, and increases access to social services. The improvement of the nautical highway system maximizes the use of the RoadRORO Terminal System (RRTS) to transport produce from Mindanao through Visayas to Luzon. It reduced travel time by 12 hours, and decreased transport cost by 37 percent to 43 percent for passengers and 24 percent to 34 percent for cargo. The Maritime Equity Corporation of the Philippines under the National Development Company (later renamed the NDC-Maritime Leasing Corporation or NMLC) was established in 2005 to facilitate the acquisition of maritime RORO vessels for leasing to qualified operators under a lease purchase agreement. The government aims to complete the nautical highway by improving 837.8 kilometers (km) of national roads along the Western Nautical Highway, 413.6 km on the Central Nautical Highway and 76.4 km on the Eastern Nautical Highway.

Maritime Transport
Institutional Strengthening
Roll-On-Roll-Off (RORO System)
To enhance the countrys exports and private sector participation in port expansion and operation and maintenance, the modernization of the Manila North Harbor was bid out to the private sector to finance, develop, manage, operate, and maintain the various facilities and services at the harbor. The Philippine Ports Authority (PPA) issued Administrative Order (AO) No. 03-2004 prescribing guidelines on developing, constructing, managing and operating ferry terminals under the RRTS. The AO also simplified the procedures in the processing/issuance of required Clearance to Develop/Permit to Construct, and Certificate of Registration/Permit to Operate. In addition, to coordinate port development plans and ensure an integrated and efficient port system, AO 123 was formulated, authorizing the Secretary of the Department of Transportation and Communications (DOTC) to perform all necessary powers and functions to connect the country by developing transportation networks such as the RORO system.

Maritime Transport
Other Outcome
Key reforms that were stated in the MTDP, but which were not achieved, include:

a) separation of port regulation and operation; b) decentralization of port management in preparation to ports privatization; and c) discontinuation of levies paid by private ports to PPA.

Two major container port projects outside its umbrella have taken off, with substantial JBIC funding. These are the Subic Port (under SBMA) and the Mindanao Container Port (under the Phividec Industrial Authority). The first one could offer an alternative to the port of Manila, while the second is a threat to PPA domination is the port of Cagayan de Oro. An alternative port system, the RRTS, was also launched in 2002 under Executive Order No. 170. It promises to provide a lower-cost alternative (in the absence of cargo-handling charges) to PPA ports in the short-distance markets, as well as time savings.
Source:DraftNationalTransportPlan,14Dec.2009

Container Throughput and Berth Length of 47 Designated Ports in ASEAN

Source: 1)Lloyd's List Port of the World 2008, 2) Containerization International Yearbook 2009, 3)International Transport Handbook 2009

Container Throughput of ASEAN Countries (2000 - 2007)


Annual Average Growth Rate of Member States
30,000

8%

25,000

20,000 (1,000 TEU)

Indonesia Malaysia Philippine Singapore Thailand Vietnam

15,000

10,000

5,000

2000

2001

2002

2003

2004

2005

2006

2007

Source: Containerization International Yearbook

Batangas Port Projected Container Volume for 2010-2034 Cargo Forecast

Container Cargo Volume (1000 TEU's) Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Import 4.4 17.7 31.3 44.7 49.2 56.8 62.1 69.6 80.2 98.7 112.7 124.8 134.1 Export 3.7 14.9 26.1 37.2 41.0 47.4 51.7 58.1 66.8 82.2 93.9 104.0 111.7 Empty 1.8 7.1 12.4 17.6 19.4 22.4 24.5 27.5 31.7 39.0 44.5 49.3 52.9 Transshipment 0.2 0.3 0.3 0.5 0.5 0.6 0.6 0.8 0.8 0.9 1.1 1.2 1.2 Total 10.0 40.0 70.0 100.0 110.0 127.2 138.9 155.9 179.5 220.8 252.1 279.2 300.0 300% 75% 43% 10% 16% 9% 12% 15% 23% 14% 11% 7%
Increase

Container Cargo Volume (1000 TEU's)

Volume

Year

Import

Export

Empty

Transshipment

Total

Volume Increase

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1

111.7 111.7 111.7 111.7 111.7 111.7 111.7 111.7 111.7 111.7 111.7 111.7

52.9 52.9 52.9 52.9 52.9 52.9 52.9 52.9 52.9 52.9 52.9 52.9

1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2

300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0

0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

China-ASEAN Free Trade Agreement (from 1 Jan 2010) Benefits: Increased trade, investment & market size

Yunnan 45 mil Pop

Guangxi 50 mil Pop

Strategic Geographical Location


Bohai Economic Zone Tokyo Bay Yangtze River Delta Pearl River Delta

Malacca Strait

China Energy Security & Alternative Access to Indian Ocean


Time and cost competitive Economic and logistics potentials Relieving congestion in Strait of Malacca Intermodal infrastructure development

Land Corridor

A corridor is only as strong as the weakest link

Land Corridor

The Case of GMS-East West Economic Corridor

Road Infrastructure is not a major issue but intraconnectivity within is.

Transport is a derived demand. Development of industrial/economic corridor generally dictated by the private sector. Did we set ourselves for failure from very beginning???

The Case of Batangas Port


Risks/Challenges Response

Logistic infrastructure development study 1. Low utilization of port facilities - irregular port of call of container Communication plan to achieve buy-in support of stakeholders/locators vessels Convergence forum with stakeholders Explore possible assistance of dialogue partner on the provision of vessel Market/provide incentives to big international shipping companies to utilize Batangas port as their maritime hub. 2. Domestic Competition - South harbour/ICTSI - Subic Assist port operator with business plan - cargo consolidation/inland clearance depot - time/distance cost analyses - time/space analyses Regional cooperation, including China, Japan, Korea and India

3. Global/regional market competition

4. Lack of policy directions Conduct SUMAC ports strategy study - Role of MICT, Subic and Batangas port Build case with NCC

Civil Aviation

Civil Aviation
Air Traffic
Passenger traffic has grown rapidly in the last seven years, with domestic growth outpacing international. Cargo volume domestic and international, however, registered sluggish growth lower than the economys average rate of expansion.
Air Transport Traffic Statistics, 2001-2008
2001 Pax Domestic (000) Pax Intl (000) CargoDomestic (000 tons) CargoIntl (000 tons) 2002 2003 2004 2005 2006 2007 2008

12,233 12,288 13,031 15,094 14,531 15,712 21,110 23,668 7,732 248 261 8,026 309 287 7,703 253 280 9,052 265 318 9,981 10,557 12,362 12,763 261 310 232 307 342 317 257 280

Source: Civil Aviation Authority of the Philippines

Civil Aviation
Growth Rates in Air Cargo and Passenger

The 8-year year-on-year average growth rates in passenger volume were 9.8% for domestic and 7.7% for international. In comparison, the economy grew by an average of 4.4%. In effect, the sectors performance was consistent with the industrys rule-of-thumb that demand for air travel grows twice as fast as GDP. That it exceeded the expected growth in domestic air travel can be explained by consumers positive response to the airlines marketing and low-fare offerings. For air cargo, the comparative figures were only 2.4% and 1.3%, respectively.
Source:DraftNationalTransportPlan,14Dec.2009

Civil Aviation
Distribution of Air Traffic by Airports

Domestic air traffic was concentrated in 20 airports (out of 85). International traffic centered on only five gateway airports (out of 10) of which 95.5% was accounted for by Manila and Mactan (Cebu). The performance of Laoag International Airport (Ilocos Norte) surpassed that of Davao in the south of Mindanao especially in cargo traffic. It would seem that Laoag benefited from the open-skies policy, which had been adopted in the 1990s, but was limited only to Laoag. Strong tourism traffic explains the substantial growths of the airports of Kalibo, Caticlan, Laoag, Tagbilaran, and Puerto Princesa. Pagadian airports record, on the other hand, is poor: In 1995, the airport recorded more than 50,000 arrivals and departures. By 2008, the traffic had dropped to zero. Source:DraftNationalTransportPlan,14Dec.2009

Civil Aviation
Air Infrastructure
The Philippines has 254 airports, of which only 85 are public and provided with paved runways. They have varying degrees of compliance with international aviation standards. Ten airports are classified as international, of which seven are considered class 1. About half of the 85 top airports are classified as community airports, which are small with short runways and serving only general aviation. The middle category is occupied by 34 primary airports of which 15 are rated as Class 1. Pagadian, which recorded zero traffic in 2008, belongs to this category. Seven of 19 class 2 primary airports have very little traffic (less than 20 passengers a week).

Source:DraftNationalTransportPlan,14Dec.2009

Civil Aviation
Communication Navigation Satellite/Air Traffic Management (CNS/ATM) To be globally competitive and address safety issues raised by tourists, the government is in the process of implementing the Communications Navigation Surveillance/Air Traffic Management (CNS/ATM) System in accordance with International Civil Aviation Organization (ICAO) standards. Furthermore, the Nationwide Air Navigation Facilities Modernization Project (Phase 3), which aims to replace ageing air navigation equipment, was completed in March 2004.

Civil Aviation
Airline Services
Air transport services have become competitive resulting largely from Executive Order (EO) 219 issued in 1995. New players entered the domestic scene, such as Cebu Pacific, Air Philippines, Asian Spirit, Grand Airways, Mindanao Express, Pacific Airways, Laoag International Airlines, and South East Asian Airlines. Consolidation and mergers since 2000 reduced the number of viable operators a pattern observed in many other countries that have deregulated their aviation industry. A research study of ten routes covering the period 1981 2003, concluded that airfare per kilometer was 10% lower, on average, on routes with at least two airlines. Twenty-three routes, representing more than 90% of domestic airline passengers, have at least two airlines by 2003, indicating that most passengers benefited from lower fares, more frequent services, and more consumer choices.

Source:DraftNationalTransportPlan,14Dec.2009

Civil Aviation
Sub-Sector Governance
The proposal to corporatize the aviation administration took more than 15 years to realize. It remains to be seen whether the new institution will live up to earlier expectations. While it may be too early to evaluate the performance of the new body, some features in its statute are contrary to good practices:
a. Board of Directors composed of five department Secretaries, who, because of existing prohibitions on multiple compensations, are likely to delegate their functions to lower-level officials; b. The combination of regulatory and commercial powers within one agency lends itself to the risk of conflict-of-interests; c. Failure to define the authoritys relationships with the autonomous airport bodies (over the international airports of Manila, Subic, Mactan-Cebu, and Clark) and with the Civil Aeronautics Board.

Source:DraftNationalTransportPlan,14Dec.2009

Civil Aviation
Comparative Performance
The Philippines has more airports than justified by its size and economy. Thailand, whose GDP per capita is more than twice that of the Philippines, has only about one-half in airport density measured in terms of number of paved airports per 10,000 sq. km of area and number of airports per million of population. The excessive airport coverage in the Philippines is even more evident when compared to Malaysia, which has only 38 paved airports and five international airports against the Philippines 85 and 10. Malaysias land area is only 30% larger than the Philippines, but its GDP per capita is about four times higher. Against the ASEAN average density of 1 airport per sq-km and 1.64 airports per million persons, the Philippines posted 2.83 and 2.81, respectively. In response to rising international air traffic, the ASEAN countries of Thailand, Malaysia, Vietnam, Singapore, and Philippines started at about the same time to expand and build new airport terminals in their main gateway airports. All, except the Philippines, have in the meantime completed and opened their new terminals; NAIA Terminal 3 partially opened to international traffic.
Source:DraftNationalTransportPlan,14Dec.2009

Civil Aviation
Safety
The FAA downgraded CAAP from Category 1 to Category 2 status on 04 January 2008, aviation capability in providing safety certification and oversight for international carriers, citing among others:
- inadequate and, in some cases, nonexistent regulatory legislation; - lack of advisory documentation; - shortage of experienced airworthiness staff; - lack of control on important airworthiness related items such as issuance and enforcement of Airworthiness Directives, Minimum Equipment Lists, investigation of Service Difficulty Reports, etc.; - lack of adequate technical data; - absence of Air Operator Certification (AOC) systems, and non-conformance to the requirements of the AOC System; - lack or shortage of adequately trained flight operations inspectors including a lack of type ratings; - lack of updated company manuals for the use by airmen; - inadequate proficiency check procedures; and - inadequately trained of cabin attendants.
Source:DraftNationalTransportPlan,14Dec.2009

Civil Aviation
Institutional Strengthening
Consistent with the principle of separation of operation and regulatory functions in the civil aviation industry, Republic Act (RA) No. 9497 was enacted into law on March 4, 2008 creating the Civil Aviation Authority of the Philippines (CAAP). The CAAP handles technical regulation functions without diminishing the role of the CAB.

Civil Aviation
Market Access
Air Services Agreement (ASA) The CAB, following the RP Air Panel consensus, negotiated Air Services Agreements (ASA) with China, Japan, Nepal, India, Bahrain, Korea, and New Zealand. These resulted in increases in capacity entitlements, new routes, more access points, multiple airline designations and airline cooperative arrangements. On March 10, 2005, the Civil Aeronautics Board (CAB) approved and published the IRR of Executive Order (EO) 253 providing for the expansion of air services at the Diosdado Macapagal International Airport (DMIA) and Subic Bay International Airport (SBIA). In this light, recent developments at DMIA include the expansion and rehabilitation of the existing passenger terminal and the installation of RADAR equipment that would further enhance the safety of flights, as well as ensure 24 hours of airport operation even during adverse weather conditions. Meanwhile, the F/S for the DMIA Master Plan Phase 1 was completed in October 2008.

Railway Sector

Railway Sector
Railway Traffic
Rail transport used to be the dominant mode in Luzon up to the 1960s, when the network comprised 1,140 track kilometers. The 448-km Manila South Line continued to operate from Manila to Naga up to September 2006, when a major typhoon cut the line to 40 km. The South Line was barely attractive with daily passenger volume of less than 1,000. In the last two decades, three major attempts and investments were made to rehabilitate the tracks and provide better trains; all of which yielded only temporary gains followed by decline in patronage. Bus service on the corridor, where PNR operates, is more attractive, despite the lower rail fares.

Source:DraftNationalTransportPlan,14Dec.2009

Railway Sector
Railway Traffic
Passenger traffic on the PNR Main Line South continued to decline from 374 thousand in 2000 to 137 thousand in 2006. In September 2006, the line was forced to close due to typhoon-induced damage on a railway bridge and tracks. Its commuter train operations, which serve mainly the southern part of Metro Manila, also recorded continuing decline in ridership from 3.5 million in 2000 to 1.9 million in 2007.

Source:DraftNationalTransportPlan,14Dec.2009

Railway Sector
Urban Rail Ridership in Metro Manila: LRT Lines
2002 2003 2004 2005 2006 2007 2008 Line 1 Line 2 Line 3 Total 107.0 107.24 98.86 104.41 111.08 119.12 138.04 2.35 20.69 41.89 47.58 52.93 58.59 Line 1 Line 2 Line 3 The

Average Load Factors (%)


LRT Line 2006 61.5 30.9 76.8 2007 66.5 34.1 87.7 2008 62.4 38.8 91.8

102.4 112.65 122.61 127.79 122.97 142.69 149.58 209.4 222.24 242.16 274.09 281.59 314.59 346.21

Ridership has reached almost a million passengers a day on all three lines, which is about 5% of total daily trips in Metro Manila.

average load factors indicate overcrowding on Lines 3 and 1, with sufficient capacity on Line 2. In an urban setting, where peak loading is the usual pattern, an average daily load factor of above 60% is an indicator of congestion.

Fare Box Ratio of Metro Lines


LRT Line Line 1 Line 2 Line 3 2006 1.52 1.10 0.96 2007 1.49 1.02 1.07 2008 1.56 1.03 1.08

Average Fare and Subsidy Per Passenger


LRT Line Line 1 Line 2 Line 3 2006 2007 2008 Fare Subsidy Fare Subsidy Fare Subsidy 14.36 14.34 14.22 2.67 -4.06 n.a. 13.51 14.15 13.93 13.42 16.92 12.05 18.01 12.34 15.56

Despite the higher ridership on Line 3, its fare box ratio is lower than Line 1 due to the formers high operating expenses under its Build-Lease-Transfer scheme.
Source:DraftNationalTransportPlan,14Dec.2009

The average fare as well as the implicit subsidy per passenger

Railway Sector
Urban Rail Network
The urban rail network totals 45.8 km in length, consisting of 15 km elevated Line 1 on a north-south axis, a 13.8 km Line 2 on an east-west axis, and 17km Line 3 on a circumferential route. An additional 4km northern extension to Line 1 is under construction. Ridership on the three Metro lines continues to expand at 8.8% yearly average with fares stagnant at its 2003 level while those of competing buses have increased several times.

Source:DraftNationalTransportPlan,14Dec.2009

Railway Sector
Governance of Rail Subsector
There are several issues in the way the rail sub-sector is managed, including:
- MRT 3 is operated by DOTC, employing casual employees since 2002, instead of consolidating the same with LRTA and allowing a more permanent tenure. - The Northrail Project is being implemented by an agency with no business or franchise to engage in rail services. - The long-delayed extension to Line 3 is being built as an extension to Line 1, with long-term consequences on future operations and network efficiency. - Line 3 was completed at a cost of $675.5 million. After eight years of lease payments, the balance on outstanding loan principals should be less than $500m. However, in 2009, the government bought out about 75% of the interest of the original investors at about $800m, which would be equivalent to an outstanding balance of $1,060 million.

Source:DraftNationalTransportPlan,14Dec.2009

Global Competitiveness
The Decline of the Philippines Global Competitiveness Ranking (GCR) from 48th in 2002 to 87th in 2009. The fall was mirrored in the decline of the global index for Ease of Doing Business from 136th in 2007 to 144th in 2009. In contrast, Thailand which used to be at par with the Philippines in the 1970s has advanced to the 36th position on the GCR scale.

Source:DraftNationalTransportPlan,14Dec.2009

Transport Infrastructure Rankings in the Global Competitiveness Report, 2008-09

Source: World Economic Forum, The Global Competitiveness Report, 20082009.

Transport Infrastructure Rankings in the Global Competitiveness Report, 2008-09

Source: World Economic Forum, The Global Competitiveness Report, 20082009.

Logistics
Comparative LPI of Selected Countries

Singapore topped the ranking with and LPI of 4.19. It is perhaps surprising that the Philippines fared worse than Vietnam and Indonesia, despite the countrys acknowledged advantage in IT know-how.
Source:DraftNationalTransportPlan,14Dec.2009

Logistics
LPI Score of Selected Countries, 2007
Criteria Customs Infrastructure International Shipments Logistics Competence Tracking and Tracing Domestic Logistics Cost Timeliness Overall LPI Vietnam Score Rank 2.89 37 2.50 60 3.00 47 2.80 56 2.90 53 3.30 17 3.22 65 2.89 53 Thailand Score Rank 3.03 32 3.16 31 3.24 32 3.31 29 3.25 36 3.21 28 3.91 28 3.31 31 Malaysia Score Rank 2.99 35 3.20 30 3.31 28 3.40 27 3.37 31 2.97 72 3.68 36 3.32 30 Singapore Score Rank 3.90 3 4.27 2 4.04 2 4.21 2 4.25 1 2.70 113 4.53 1 4.19 1 Indonesia Score Rank 2.73 44 2.83 45 3.05 44 2.90 50 3.30 33 2.84 92 3.28 58 3.01 43 Philippines Score Rank 2.64 53 2.26 86 2.77 63 2.65 70 2.65 69 3.27 19 3.14 70 2.69 65

The Philippines Logistic Performance Index (LPI) stood at 2.69, good enough for a 65th position against other countries, in 2007.

Source:DraftNationalTransportPlan,14Dec.2009

Energy in Transport
Energy use in transport is growing at 6.4 % a year, which exceeds the global average of 2.7%, to reach 10.9 MTOE in 2008. The estimated greenhouse gases (GHG) emissions in 2007 is 29.3 MtCO2 of which road transport contributed about 24 MtCO2. Maritime and aviation emitted a total of 5.3 MtCO2.

Source:DraftNationalTransportPlan,14Dec.2009

Maritime Incidents/Accidents

2009

2008

2006

2005

2004

2002

1998

1994

1987

Explosion inside Collision of MV Oil spill off Sinking of Superferry 14 Guimaras Island Power barge Princess of the Collision of Dona Paz with an Oil Tanker Orient ran aground near Singaporean Fire on board MV Dec. 2009 coast off Antique Tanker with Ferry June 2008 Maria Carmella Sinking of the MV Sinking of the Princess of Cebu City Baleno-9, the Stars MV Catalyn B Sept. 2009 Sinking of the Super Maritime Disaster/Incidents Relevant Statistics Ferry 9

Various Marine Disasters Total Oil Spills


Spills due to Accidents Spills due to Oil Loading & Discharging Spills due to Bunkering

1080 (2000-2005)

86 (years 2000-2005) with: 12 incidents 74 incidents 46 incidents P40 billion (source: PCG Estimate) P4 billion (source: Bureau of
Customs)

Economic Loss due to Poaching Economic Loss due to Smuggling Economic Loss due to Coral Destruction

P55 billion (source: International


Marine Life Alliance of Canada)

Civil Aviation

The FAA downgraded CAAP from Category 1 to Category 2 status on 04 January 2008. The Consequences of downgrading into Category 2 includes no expansion/increase of existing number of flights and routes for Philippine carriers operating into US territories and heightened operation and airworthiness surveillance by the FAA on Philippine carriers operating in the US territories.

Civil Aviation
Filipino Airlines Suffering from Poor Aviation Rating
Korean civil aviation officials had nixed Philippine Airlines bid for a Cebu-Seoul route. Saudi Arabia too may delay resumption of the flag carriers Manila-Riyadh flights. Authorities in Japan, Hong Kong, Singapore, and Australia have begun inquiring about RPs aviation record and policies. Revenues would be lost from the traditional high-profit routes.

Magnitude of the Environmental problem


Based on the 2007 National Emission Inventory mobile sources contribute 65% of the air pollution load nationwide

Scientific evidence suggests that a 450ppm CO2e pathway with overshoot gives a 40-60% probability to limit global warming to 2 degrees
Probability of Expected temperature temperature increase increase under 2oC

Global GHG emissions and pathways for GHG stability

* Climate impact estimates for current proposals calculated using C-ROADS model Source: IPCC WG3 AR4,, den Eizen, van Vuuren; Meinshausen; Global GHG Abatement Cost Curve v2.0, Catalyst analysis

17 Gt of reductions below BAU in 2020 are required for 450ppm: Current proposals put us on a 700-750 ppm path and 4 degree future

Global GHG emissions, Gt, CO2e per year

Source: McKinsey Global GHG Abatement Cost Curve v2.0; Houghton; IEA; US EPA; den Eizen, van Vuuren; Project Catalyst analysis

ITS IMPACTS WILL INCREASE, BOTH IN STRENGTH & IN FREQUENCY.


It will get worse, before it gets better.

Non OPEC Oil Production Forecast


This is the 2004 CIA predictions of oil production of non OPEC members and former Soviet Union.

The Road Users in the Future ??

Developments in the Regional Arena

Developments in the Regional Arena


Increased globalization and competition for markets and investment; Emergence of China as a global economic player; Increased collaboration of ASEAN with China, Japan, Korea, and India;
List of Priority Projects of the ASEAN-China
ASEAN-China North-South Corridor-1 (ACNS-1)
- China-Myanmar-Andaman Sea Corridor

ASEAN-China North-South Corridor-2 (ACNS-2)


- China--Lao PDR/Myanmar-Thailand-MalaysiaSingapore Corridor

ASEAN-China North-South Corridor-3 (ACNS-3)


- China-Vietnam-Lao PDR-Cambodia Corridor

ASEAN-China North-South Corridor-4 (ACNS-4)


- China-ASEAN Ocean Corridor

ASEAN-China East-West Corridor-1 (ACEW-1)


- The Straits of Malacca Corridor

ASEAN-China East-West Corridor-2 (ACEW-2)


- Vietnam-Cambodia-Thailand-Myanmar

ASEAN-China East-West Corridor-3 (ACEW-3)


- Vietnam-China-Myanmar-Bengal-India Corridor

China-ASEAN Free Trade Agreement (from 1 Jan 2010) Benefits: Increased trade, investment & market size

Yunnan 45 mil Pop

Guangxi 50 mil Pop

Strategic Geographical Location


Bohai Economic Zone Tokyo Bay Yangtze River Delta Pearl River Delta

Malacca Strait

Intermodal Transport Logistics Operations


Kunming

INDIA
Bhamo Mandalay Sittwe

CHINA
Nanning Shenzhen Hanoi

Yangon Mawlamyine

Vientiane

Danang

Bangkok

Phnom Penh

Ho Chi Minh

Landbridge for Global Maritime Shipping


Economic benefits Logistics cost impacts Shipping routing implications Infrastructure development strategies Regional cooperation Multimodal corridors

China Energy Security & Alternative Access to Indian Ocean


Time and cost competitive Economic and logistics potentials Relieving congestion in Strait of Malacca Intermodal infrastructure development

Strait of Malacca -- Security, Capacity, Time


Intermodal Transport
Expected completion

2014

48 pipeline of capacity

6 million barrels crude oil per day

Cut down tanker traffic in

Malacca Strait by 20%. implications

Transport cost and time

China-ASEAN Port Cooperation


Three ports in Beibu Gulf for cooperation with ASEAN: Beihai Port Fangcheng Port Qinzhou Port

Enhancing archipelagic ASEAN maritime corridors

Trans-Asian Railway route map

81,000 km, 28 countries Missing links Intergovernmental Agreement on the Trans-Asian Railway Network Adopted by the 62nd UNESCAP Commission (April 2006, Jakarta) Signing ceremony during the Ministerial Conference on Transport (6-11 November 2006, Busan) Expected to enter into force in May 2009

Current Trends
ECONOMICS Market integration Development of industrial/economic corridors Internal Mobility/Connectivity Liberalised context Liberalisation of logistics services SOCIAL Safety & Security Training/Skills development ENVIRONMENTAL Pollution Carbon emission

What does these developments in Regional Arena mean for us??? What opportunities, including those in terms of financial and technical cooperation and assistance have been opened or closed for us???

We cant improve measuring!!!

something

without

Develop a rigorous economic geography model for predicting changes in the location of population and industries across region in the process of economic integration.
- IDE Geographical Simulation Model
determine the dynamic of location of population and industries in East Asia in the long term. analyze the impact of infrastructure development projects on the regional economy at sub-national level.

Myanmar Laos

Vietnam

PXG

Nanning

Guangzhou

Hanoi
VTE

China

VTE

Thailand
ZVK

Bangkok
Cambodia

Danang

Phnom Phen

Ho Chi Minh

Malaysia

Kuala Lumpur
Singapore

Sub-Regional RORO Prospect


Mindanao connectivity under BIMP-EAGA Sea Linkages Air Linkages
MISAMIS OCCIDENTAL ZAMBOANGA DEL NORTE LANAO DEL NORTE ZAMBOANGA SIBUGAY ZAMBOANGA DEL SUR LANAO DEL SUR CAMIGUIN

SURIGAO DEL NORTE

SURIGAO DEL NORTE SURIGAO DEL NORTE SURIGAO DEL NORTE

SURIGAO DEL SUR AGUSAN DEL NORTE MISAMIS ORIENTAL AGUSAN DEL SUR

BUKIDNON

DAVAO COMPOSTELA VALLEY

ZAMBOANGA SIBUGAY COTABATO ZAMBOANGA DEL SUR MAGUINDANAO DAVAO ORIENTAL DAVAO DEL SUR DAVAO

BASILAN

SULTAN KUDARAT

SULU

SOUTH COTABATO SARANGGANI DAVAO DEL SUR

SULU TAWI-TAWI SULU TAWI-TAWI SULU

SARANGGANI

TAWI-TAWI

TAWI-TAWI TAWI-TAWI TAWI-TAWI

TAWI-TAWI TAWI-TAWI

Logistic Development Framework


Liberalization of Logistics Services
Maritime Transport Services Air Freight Services Rail Freight Transport Services Road Freight Transport Services

Enhancing Competitiveness of Logistic Services Providers through Trade and Logistics Facilitation
Trade and Customs Facilitation Logistics Facilitation

Expanding Capability of Logistics Service Providers Human Resource Development Enhance Multi-Modal Transport Infrastructure and Investment

Governance

The Philippine Economic Boat and The Global Recession

The Philippines is not badly affected because we saw the global storm and our boat stayed in port.
Dr. Josef T. Yap, president, Philippine Institute for Development Studies at conference on the global recession. February 17, 2009

The Philippines is not badly affected because our boat did not leave the port.
Attributed to Dr. Felipe M. Medalla, UP economist & former NEDA Director General

The Philippines is not badly affected because our boat has not been built.
Manuel V. Pangalinan, chairman PLDT, MAP speech, February 11, 2009

The World Is Changing


Are we on board?

THE WAY FORWARD ??

Transport Issues

Early Realizations
The country did not have a truly integrated strategy for the transport sector Although we may have the best and technicallyexceptional plans and projects, we are constrained with the absence of capable institutions who will implement the plans

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Philippine Transport Strategy Study (PTSS)


Commissioned to develop the Transport Agenda for the next 6 years (1999-2004) in line with the Medium-Term Philippine Development Plan (MTPDP)

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Issues identified by PTSS


Politics intrudes extensively in the sector too intrusively. The results is that just about everywhere is a development priority, and little attention is paid to economic efficiency; The institutions of Government are now ill-suited to the task ahead change is needed; There is inadequate funding to meet the sectors needs; The private sector is, incorrectly, seen as the (easy) answer to this funding problem;
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Issues identified by PTSS (2)


There is no transport policy and strategy that is owned by the agencies of government; In many areas, there is inadequate understanding of the potential of transport strategy; Attention focuses on projects, not institutions or policies which are now more important; There are few prepared good projects that are implementable surprisingly few; Many projects are simply unrealistic, or unaffordable.
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Key Characteristics of Future Agenda


Much reduced government and a much increase role for the private sector; Sustainability of policy in the medium and long-term; Transport policy that is responsive to demands for quality service, driven by increased incomes and the requirements of global competitiveness, improved efficiency and innovation.

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PTSS Recommendations
PTSS has underscored the urgent need to improve existing Government processes in relation to the transport sector PTSS recognizes that there is little need for new infrastructure. There is a large road network, an extensive railway, that is underused, probably too many ports and many airports. The primary need therefore is to maintain, rehabilitate and upgrade the infrastructure that exists.
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