• The calamity right under our noses

    6

    IN our workplace, and we suspect the vast majority of others in Metro Manila, the most popular topic of conversation to begin or end a workday is the horrible state of the city’s transportation infrastructure.

    Every day, at least one of our staff will regale us with tales of a commute that rivals the Anabasis in terms of struggle; yesterday, it was one of our editors, who arrived at the office in a towering rage over having spent nearly four hours to reach his home less than 20 kilometers away the previous evening.

    Of course after venting about it, he and the rest of our colleagues regard the circumstances with amusingly sarcastic resignation, because none of us really has a choice but to grin and bear it. If one wishes to do business, attend classes, report for work, go shopping, take in a movie, or visit friends in another neighborhood, one must simply accept that just getting there will exact a heavy toll in time, peace of mind, and possibly personal safety.

    Last week, a visiting Australian trade delegation visited Manila and delivered a simple message: The Philippines needs to invest in infrastructure before it even so much as dreams of pursuing economic growth along other paths. And to reinforce the point, the Australian Trade Minister only invited executives from infrastructure-related businesses in Australia to accompany him on the trip.

    Filipino investor groups, economists, and consumers have been calling on President B.S. Aquino 3rd for the past five years to do exactly what the Australians are suggesting. Aquino has sometimes responded with the right words – this year’s General Appropriations Act provides for a considerable increase in the somewhat ill-defined category of “infrastructure spending” – and sometimes dismissed the country’s concerns with pathetic and embarrassing attempts at humor, such as suggesting that heavy traffic was a sign of a good economy.

    Despite the promptings by the public and competent observers for the government to boost spending on infrastructure, the first-quarter budget deficit figures released yesterday show that government spending increased only 4 percent, compared with an 18 percent rise in revenue collections.

    Seeing the missed targets, Nicholas Antonio Mapa, associate economist at the Bank of the Philippine Islands (BPI), tagged the government as the economy’s “weakest link.”

    Mapa said government spending continues to be a head-scratcher despite its more than 4 percent growth in the first quarter. Although he sees the increase as positive, Mapa said spending does not seem to demonstrate the resolve of the government to pump-prime the economy and prepare the Philippines to take the next step in its growth path.

    “Despite all their pronouncements and pledges, government spending remains lackluster and lackadaisical, devoid of the urgency that we had hoped they’d deliver. A true disappointment to say the least, in their five-year of operation,” the BPI economist added.

    Philippine infrastructure – roads, railroads, ports, and airports – is in a state of calamity, particularly in and around Metro Manila. Estimates of the financial cost of traffic gridlock in recent years are about P2 billion per day; several economic experts we talked to, however, are confident the cost is much higher than that. One way to sense the magnitude of the harm dysfunctional infrastructure is doing to the economy is to consider this: A worker who works a regular 8-hour work day but must spend 2 hours commuting in each direction is having his income, and consequently his spending power, reduced by a third. Multiply that by the estimated 2 to 3 million daily commuters around Metro Manila, and millions more in other parts of the country, and the scale of the lost economic opportunity is almost incomprehensible.

    The Philippines’ infrastructure calamity must be addressed, aggressively and immediately. Paying lip service to it is not enough. We suggest an approach such as that which was applied to the problem of port congestion at Manila last year, and which was ultimately effective: A focused, time-limited, multi-sectoral task force that includes representatives of all stakeholders and given enough authority to implement immediate short-term solutions while longer-term fixes are being developed.

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    6 Comments

    1. Di baleng walang infrastructure, basta walang sabit sa korapsyon. Yan ang motto ng mga Dilaw.

    2. While our daily travel or travail may be compared to the hardship of the Anabasis, some might compare their heroic leaders with ours.

      This is 100% errorneous. Our Dear Leader BS Noynoy the Thrd is as far from heroic as the dirt is fron the sky.

    3. It’s a simple proposition really:

      1 – Get government out of the infrastructure business.

      No matter how much you increase government spending – it will not improve infrastructure,

      2 – Liberalize the economy

      Allow ALL foreigners (such as the Australians referred to in this op-ed) to own up to 100% of a Philippine registered company that can undertake infrastructure projects – and COMPETE against Filipino firms instead of being FORCED to partner with Filipinos in a ridiculous 60/40 joint venture structure.

      3 – Privatize after liberalizing

      Privatization without liberalization only transfer the inefficient public monopoly to the private sector – but it still is a monopoly with all its inefficiencies.

      Privatization after liberalization – will allow all who are able to provide the service (regardless of national origin) to Filipino consumers.

      As government keeps on putting more regulatory hurdles for developers – it reduces the available supply base.

      No government summit can address the infrastructure gap – only FREE MARKETS can!

      By privatizing – we reduce the pressure to increase taxes that will fund the government spending. People who don’t use the infrastructure should not be paying for it. Those who use should pay. SUBSIDIES is a DIRTY WORD!

    4. One of the main policies of the previous administration of Aling Gloria Arroyo is to improve the infrastructure in the entire country. She did and started everything in the right footing but PNoy completely stopped the momentum. PNoy’s hatred personal or official is destroying him, after all.