• The traffic and economic progress



    The number of new vehicle registrations is boasted about, for there has apparently been a four- or five-fold increase in the rate of new vehicle registrations over the last five or six years, which has “surprised” the authorities. The Metro Manila traffic situation is cited as a sure sign of the country’s economic progress. Travelers must just be patient until things are sorted out in the transportation infrastructure area.

    It is difficult to build new roads in Metro Manila and there is no question that there are not enough existing roads. As I recall, there was awful traffic in 1992 and little has been done in the way of new road construction in the region aside from Skyway. There are more people, more vehicles and the same rail systems as there were then, 23 years ago.

    So Metro Manila traffic jams are a reflection of a robust economy? But the economy was just as robust in 1992 but the traffic problems then were the same as now or worse then than they are now. But something must have changed because now there are lots more vehicles–the rate of increase of new registrations has shot up but the traffic situation is not, say ten times worse, it is about the same degree of awfulness as it was 23 years ago – many were the times when I abandoned the car and just walked to my destination.

    The significance of the number of new vehicle registrations to the national economy is an interesting one. Bank loans for new cars beget high levels of monthly repayments, with P30,000-40,000 a month for a fairly average car about the usual. It used to be reckoned that a loan for a house should be no more than 2.5 times a person’s or couple’s annual salary.

    Extending the same principle to buying a car, then a salary of P100,000 a month would be needed to support a loan for an average car. Are there that many people with a salary of that level? The answer is no, there are not, however the employment benefit of a soft car loan is common practice and it is my bet that it is the ever widening availability of these soft loans (in the BPO sector, for example) that are a significant factor driving up new car registrations. Deposits or down payments on new cars are at a very low level now, the banks have more money than they know what to do with and they like assets like land, houses and cars, things that they can repossess. They are keen to lend and with their lending imagination able to stretch no further than hard fixed assets they must have relaxed their criteria with the result that there are now real indications, from the spike in the number of new car purchases (and for that matter houses and apartments) of a coming consumer credit bubble.

    So contrary to seeing the number of new vehicle registrations as an indicator of a buoyant economy, I read it as an indicator of a “la la land” economy in which financially engineered publicity is displacing reality. The banks no doubt enthusiastically encouraged by the BSP and Department of Finance are using gullible consumers to buy imported vehicles in unprecedented quantities in order to boost consumer spending and support the miraculous GDP figures. Problem is that many of the consumers will not be able to sustain the loan repayments, leading to repossession and a good market in second-hand vehicles–but it will take a year or so for that to work its way through the system, by which time it will become somebody else’s problem! Messing up the reforms of the previous administration.

    Anyway after that diversion, back to the traffic. It is bad but it has been bad for years. It is difficult and enormously time-consuming to build new roads. Numbers of vehicles are increasing fast. Easy to say but of course it is a planning problem, which in this politically-driven society with six-year terms for an administration and thousands of politically nominated senior government employees, cannot ever be properly solved without a carry-over of transportation policies and plans from one administration to another–and such cooperation is far from common practice in this neck of the woods! It is also sad to say it is once again a manifestation of corruption: regulatory capture, people get to build new shopping malls anywhere they feel like it regardless of traffic complications, the mushrooming growth of “un-intelligent” (simple time delay based) traffic lights, the mechanics of obtaining and retaining franchises for buses on EDSA and the lack of the even-handed enforcement of driving regulations (including the necessity to take and pass proper driving tests).

    To eradicate such ingrained systemic corruption requires fundamental societal change, and at the end of the day that’s what is needed to sort out the traffic–but please don’t tout the chaos as an indicator of a booming economy when it actually indicates a dysfunctional and carefully crafted economy!!

    Mike can be contacted at mawootton@gmail.com.


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    1 Comment

    1. In my opinion, here are some of the culprit on our traffic mess:
      1. There is no “in charge” in traffic management in metro manila (MMDA).
      2. No proper planning in terms of widening/ clearing of roads, constructing new road, bridges, flyovers, etc (MMDA/DPWH).
      3. The unregulated developments of malls,commercial centers schools all around metro manila (MMDA/DILG)
      4. Outdated bus & jeepney routes. (LFTRB)
      5.Problem on public transport (people/workers tend to buy cars even 2nd hand because our MRT/LRT & buses are unreliable). (DOTC)
      6. Traffic enforcers are no help (they allow public vehicles to stay longer on road corners & bus/jeepney stops). (MMDA/City Govt.)
      7. Allowing Establishments/Schools to operate even they dont have enough extra lanes & parking space for their customers & students. (DILG/DEpEd).

      Traffic in Metro Manila is major problem that need a single full time “in charge” leader who can plan & implement policies independently without bothering by other govt. agencies.