Too many cars


IT is a suggestion that borders on heresy here in the Philippines, but it is one that is fully supported by plain, painfully obvious reality: There are simply too many cars in this country, and no amount of road infrastructure development is ever going to be able to efficiently accommodate them all, or keep up with the growth of the vehicular population.

This reality is problematic in just about every possible respect. Automotive assembly over the last several years has been the go-to industry for policy efforts to expand the Philippines’ manufacturing sector, and because of very robust demand—which is attributable to a number of factors, not all of them positive—it is one area where economic development efforts have met with clear success.

The automotive industry here supports a large and complex supply chain. Apart from the direct employment and trade involving manufacturers, the parts and components industry is an active exporter. The automotive dealer network is growing—nearly every auto group is planning expansion in the coming year, including the introduction of a couple of new brands—and each one of those dealership facilities will employ several dozen people and generate hundreds of millions of pesos in commerce annually. Ancillary businesses, everything from the small mom and pop canteens and sari-sari stores that owe their existence to the automotive workforce to giants like utility companies, also contribute a significant amount to the national economy from their automotive sector-related business activities.

The economic health of even seemingly unrelated sectors like the media also relies on the continued good health of a growing automotive sector; auto manufacturers and dealers are among the media’s best and most reliable customers in terms of advertising and other media services. That is likely the reason a frank, objective discussion of what role the automotive sector should actually play in the Philippines is elusive; analyzing the industry in terms that do not conclude that unrestrained growth is a given and no real attempt to limit it should be made, is—from the media perspective—tantamount to burning one’s own paycheck.

And from my own perspective, the automotive industry provided me with a comfortable and rewarding livelihood for nearly two decades; admittedly, there is quite an emotional hurdle to considering it as anything less than a benefit to the culture and the economy.

But the reality is, there are simply too many motor vehicles in the Philippines now, such that it might already be impossible to build sufficient infrastructure to absorb them all, and given the rate of expansion of the auto market, it will certainly be impossible to catch up. It takes years to build a useful road, but in the Philippines a new car hits the street roughly every two minutes on average (based on 2015’s sales of 288,609 vehicles, it’s actually every one minute and 49 seconds).

There are two reasons for the almost cancerous growth of the auto sector in the Philippines. From an economic philosophy perspective, the very American idea that widespread car ownership is an important measure of living standards is part of the neoliberal canon that guides the world economy. That works in a country like the United States, which is relatively sparsely populated and has every possible material and intellectual resource it needs to make the automobile a mass commodity, but is not a good fit in every economy.

The second reason is the short shrift given to development of mass transit in the Philippines, a harmful omission that might also be blamed on the influence of American attitudes. Among developed countries, the US is a laggard in public transportation development, because it has never been as critically needed there as in some other countries. An ordinary worker might wait years for his city or state to building a light rail line or create a bus service, but if he has the means—which he likely does, given the relative affordability of automobiles—he can be driving his own vehicle in less than an hour. The existence of that option frankly saves governments a lot of time, effort, and money that would otherwise be spent in creating means to allow their citizens to move around, and so little attention is given to public transportation. As it is neglected, it eventually turns into the sort of unappealing mess the Philippines has now—dangerous, uncomfortable, inefficient, poorly planned and poorly regulated.

Development of public transportation must necessarily precede reducing the number of vehicles on the roads, and afterwards maintaining the vehicular population at an efficient level. There are a number of plans for public transportation services and facilities among the ideas for the Duterte administration’s “golden age of infrastructure,” and that is a positive sign. But it is probably not a solution; studies on the question (for example, one done about six years ago by the US Department of Transportation) have found that vehicle owners who were previously public transportation users tend not give up their cars and return to using public transit, even when presented with obvious cost and time savings of the option.

The inescapable conclusion, that which no one wants to talk about, is that at some time in the future once efficient public transportation options are available, people will have to be obliged to use them by having their cars taken away, or the use of them so restricted that ownership will become pointless for most. That will create huge losses in the economy if policymakers likewise do not find options other than relying on the automotive sector for an increasing contribution to GDP. But the alternative is just as ugly: A fully developed automotive sector facing collapse due to oversaturation of its market.


Please follow our commenting guidelines.

Comments are closed.