Poor quality roads holding back investments, dev’t – study

Underinvestment in quality roads is not only holding back investments but development according to a study by the state-owned think tank PIDS

MANILA, Philippines – Underinvestment in quality roads is making it more costly to do business in the Philippines according to a study released by state-owned think tank Philippine Institute for Development Studies (PIDS).
If the country wants to increase its investment rate above 20% by the time President Aquino ends his term, local government units (LGUs) have to invest more in road networks said the PIDS’ study.
Poor roads not only hold back local development but also make transporting goods more costly and time consuming, it said.
Roads and poverty
Only 14% of local roads are paved, compared to 69% of national roads, explained Gilberto Llanto, the Former National Economic and Development Authority (NEDA) Deputy Director who wrote the discussion paper ‘Investing in Local Roads for Economic Growth.’
“Poor road quality, according to the World Bank, results in intercity freight rates that are 50% higher than in Thailand or Vietnam,” said Llanto.  The low intercity freight rate comes from the low proportion of paved roads and how the roads function as a network, he explained.
“Both national government and LGUs cannot ignore this fact of underinvestment in maintenance and construction of good quality local roads,” he added.
His data found that only 35% of roads are paved in Central Luzon, the 2nd best region for road quality.
About 98% of roads in the National Capital Region (NCR) are paved, making local roads the issue.
Data pointed to the relationship between lack of development and lack of paved roads. The poverty incidence outside of NCR stayed in the double-digits according to 2006 data.
NCR with the most paved roads came in with the lowest poverty incidence of only 5.4% in 2006.
Meanwhile, the Bicol region where 47.5% of city roads and 45.9% of provinical roads are paved, registered the highest poverty incidence of 45.2%.
Cardaga had the 2nd highest poverty incidence at 44% with only 10.6% of paved provincial roads and 54% of paved city roads.
Calabarzon had the 2nd lowest poverty incidence at only 12.3% at the time and by comparison 67.2% of provincial roads and 38.2% percent of city roads are paved.
Political will needed
“Investing in quality local road networks requires not only monies but also importantly strong political will at the national and local levels,” said the former NEDA official.
Lianto explained that economic services are only the 2nd biggest expense for most LGUs since most focus spending on general government expenses, like officials and personnels’ wages and salaries.
He also pointed out that the Commision on Audit found irregularities in spending for the Special Local Road Fund under the Motor Vehicles User’s Charge Act of 2000 or Republic Act 8794.
COA found that P369 million in MVUC funds were released for preventative maintenence projects that were not approved by the Road Board or evaluated by the DPWH’s Road Project Office.
Llanto called on LGUs to start a revenue campaign to plug tax leakages, raise more funds and make the cost of development projects transparent to the public.
Llanto’s paper summed up the situation, “Based on limited available data the general conclusion one can make is that local roads are generally of poor quality and condition.”
“This is indicative of the inability of local government units to maintain local roads, which hampers local growth and development,” he added.
“A severe underinvestment in good quality roads has certainly contributed to the high cost of doing business in the country,” he stressed – Rappler.com

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