WITH the legal obstacles removed, the authorities are poised to increase the toll at the South Luzon Expressway. And beginning October 1, motorists will start paying the 12 percent value added tax (VAT) for using expressways. The courts and legal experts may have cleared the way for these rate increases, but the toll hike still makes for bad policy.
We hope that the Aquino government reflects on the likely consequences of the toll adjustment. Because it will increase transportation costs, commuting to work in Metro Manila will be more expensive – at least for those passing through expressways. This will hurt the dwindling middleclass and many more in lower socio-economic classes who find living within Metro Manila too expensive. Because of the toll increase, it might compel some to relocate within the metropolitan city limits. Such a move is likely to worsen congestion in Metro Manila, as well as weaken the viability of real estate development outside the metropolis and set back rural development.
Roads and highways leading out from urban areas encourage development to spread to the countryside. Besides people, highways also carry commodities and other goods produced in rural areas – spawning livelihood and jobs in the countryside. But higher tolls undermine that.
High tolls also make it harder to find affordable homes. Those who can afford typically buy homes within the city limits. Consider that the most exclusive villages in the Philippines are located within Metro Manila – unlike in other countries, like the United States, where the gated communities are typically in the suburbs. Filipinos look at housing development in the outskirts where a house and lot is more affordable. But more costly tolls (coupled with rising fuel prices) may offset the savings made from buying homes in the outskirts.
Another argument against the toll increase is the inflationary pressures it causes. Food items and commodities consumed by Metro Manila residents come from adjacent provinces and other areas that must pass through expressways. With inflation at a mere 4.7 percent, however, we can understand how policymakers and economic managers are probably not worried about this factor.
We hope that they remember that the low inflation reflects the weak economy, which grew a measly 3.5 percent in the second quarter, suggesting that people are struggling harder now. Worse, inflation might rise in the coming months. The Aquino government, having been criticized for underspending, was supposed to have begun to increase public spending. Also, consumer spending will likely increase as the Christmas season draws nearer. When inflation goes up, the impact of the toll hike might become more acute.
Poor alternatives
Some proponents of the toll increase argue that motorists unwilling to pay a toll can always take alternate routes. But the proponents forget that the alternate routes they are recommending are already congested. Using them can be costly as well because motorists consume more fuel when traffic is worse.
Even with the option of using toll roads, an hour of commuting each way to work is not uncommon. And with fuel prices rising steadily, every motorist avoids traffic and, as mentioned earlier, not just because of the inconvenience. So the alternative routes that proponents of toll increases have mentioned are not viable, practical or economical.
Granted, the Aquino government is under pressure to raise tax revenues. Collection targets have, so far, continued to elude the authorities. One alternative is for lawmakers to raise “sin taxes” imposed on cigarettes and alcohol. Also, the government could simplify the tax rules in order to close loopholes and make collection easier. The point is there must be other ways to raise tax revenues without imposing a heavier burden on those already struggling to get by.
