Truck ban for APEC 2015 preps to worsen road, port congestion
Truck ban for APEC 2015 preps to worsen road, port congestion
The World Bank says solving congestion requires more investment in infrastructure

MANILA, Philippines – Limiting truck movement in preparation for the 2015 Asia-Pacific Economic Cooperation (APEC) meetings could worsen road and port congestion in Metro Manila, the World Bank (WB) said.

Several key issues remain unresolved that lead to the congestion in Metro Manila, WB said in its Philippine Economic Update.

The WB said the worsening congestion results in significant productivity losses for the economy.

Adding to the woes is the 6-month long truck ban recently imposed by the Metropolitan Manila Development Authority (MMDA) along Roxas Boulevard to ease holiday traffic and to prepare for the 2015 APEC meetings.

“As a third of trucks use this thoroughfare to reach the port, the flow of goods will again be severely compromised,” the World Bank said.

It also noted the growing concern about the government’s directive to phase out trucks older than 15 years, and such constitute around 70% of total trucks.

“As many of these trucks are still road-worthy, this move could paralyze the logistics sector,” the report said.

The World Bank also said that the complexity of securing import clearance certificates as a major concern.

“While processes in the Bureau of Customs (BoC) have been streamlined, processes in the Bureau of Internal Revenue (BIR) have seen little improvement,” the report said.

In particular, BIR noted that 7 redundant or cumbersome steps were identified in a process review, yet no action has been taken to address the finding.

Those steps identified were tax declaration; certified true copy of BIR certificate of registration; authenticated copy of income tax return; details of registration address; for individuals, personal profile with ID picture; for corporations, standard registration requirements from SEC; and for cooperatives, standard registration requirements from the Cooperative Development Authority.

The Washington-based agency also said that in the last decade, Metro Manila experienced high and sustained economic growth, but infrastructure deficits led to worsening road congestion.

This costs the economy around 8% of gross domestic product annually, the World Bank said.

Though the congestion do not translate into very high commuting costs, in part due to subsidies given to mass rail transport, it nevertheless manifests itself in a very long commute time and significant productivity losses, the World Bank pointed out.

To illustrate, World Bank said that workers living in northern Metro Manila and working in the Makati business district, which covers a distance of 20 km, spend up to 4 hours commuting per day.

Train congestion also worsened significantly in recent years, attributed to  long queues and slower trains, “the result of under-maintenance,” the report said.

According to the Japan International Cooperation Agency (JICA), road congestion costs the economy some P876 billion ($19.65 billion) annually, equivalent to about 8%of GDP, or P2.4 billion ($53.84 million) per day.

Such translates into a “productivity tax” of 10% to 30% per person, the World Bank said.

Invest in infrastructure

The World Bank said that solving congestion requires more investment in infrastructure.

There is an urgent need to expand and modernize the country’s mass transport system, including bus rapid transit systems, World Bank said. (READ: Remember the Love Bus? Might be time to have it back)

“Moreover, road connectivity between major business districts and residential areas needs to improve by investing in elevated expressways, as Bangkok and Jakarta have done,” the report said.

The World Bank acknowledged that the current effort to connect the north and south expressways is a step in the right direction.

“But more is needed, such as connecting the Port of Manila directly with the north-south expressway via a dedicated elevated expressway,” it added.

The World Bank stressed the need to decongest the Port of Manila by developing the nearby ports of Batangas and Subic.

The multilateral agency added that integrating the domestic and international berths will also help decongest the Port of Manila by avoiding inefficient transfers of goods between domestic and international ships and harbors.

Overall, complementary reforms are also needed to improve competition in domestic shipping, including the liberalization of the Cabotage law, the World Bank said.

The World Bank (WB) downgraded the Philippines’ annual growth outlook for 2015 to 6%, despite a helpful global oil price plunge, which the multilateral lending agency said is an advantage for developing countries. –

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