publicus js ncpag transport issues

8/3/2019 Publicus Js Ncpag Transport Issues

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Noriel Christopher C. TiglaoAssociate Professor, UP-NCPAG

Director, CPED


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Source:DraftNationalTransportPlan,14Dec.2009

Transport infrastructure investment of the nationalgovernment and government owned and/or controlled

corporations (GOCCs) was highest in 1999 at 1.3% ofGDP; the ratio fell to 0.4% in 2000, before reaching 0.8%in 2008 (against a government target of 5%).

Investment in Transport


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Source:DraftSituationalAnalysisReport,April2009

Public Investments in theTransport Sector, by Annual

Expenditures, Percentage ofGDP and Percentage ofInfrastructureProgram, 1997-2007


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REGION 1

P4.1 Bill ion

REGION 2

P4.1 Bill ion

CAR

P5.5 Bill ion

REGION 3P9.1 Bill ion

REGION 4-A

P6.9 Bill ion

REGION 4-B

P2.8 Bill ion

REGION 9

P6.2 Bill ion

REGION 10

P6.8 Bill ion

NCR

P3.7 Bill ion

REGION 11

P4.7 Bill ionREGION 12

P1.8 Bill ion

REGION 13

P5.2 Bill ion

REGION 8

P8.7 Bill ion

REGION 7

P3.9 Bill ion

REGION 6

P5.2 Bill ion

REGION 5

P7.6 Bill ion

2009 InfrastructureTowards Development

Roads, Bridges, Farm to MarketRoads, School Buildings, Classrooms, Flood Control, ports andAirports

Metro Manila


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Appropriate spatialframework for sectoraldevelopment

2005-2010 North Luzon

Metro Luzon

Urban Beltway

Central

Philippines

Mindanao

Cyber Super

Region

Super RegionStrategy


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ILOCOS

NORTE APAYAO

CAGAYAN

ABRA

KALINGA

ILOCOS

SUR ISABELAMOUNTAINPROVINCE

LA UNION

BENGUETNUEVA

VIZCAYA QUIRINO NORTH

AURORA

PANGASINAN

NORTH

ZAMBALESNORTH

TARLAC

NORTH

NUEVA

ECIJA

IFUGAO

BATANES

Salomague Seaport

Port Irene

Northern CagayanAirport

Basco, Batanes

Bagabag, NuevaVizcaya

San Fernando (PoroPoint Intl.) Airport

NORTH LUZON AGRI-BUSINESS QUADRANGLE

Casiguran, Aurora

Itbayat, Batanes

Dingalan Port, Aurora

Alaminos Airport

Airports Total (Components) = 21Ports Total (Components) = 6

Being the food basket of Luzon and MetroManila, with its agriculture and mariculturedevelopment, the region can further boost itsinvestment climate. This can be done byreducing the cost of transporting goods and

addressing social development concerns bymobilizing local resources and networks tofacilitate the implementation of NationalGovernments projects.


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South

Zambales

South

TarlacSouth

Nueva Ecija

South

Aurora

PampangaBulacan

Quezon

BataanNCR Rizal

LagunaCavite

Batangas

MarinduqueOr.

Mindoro

Occ.

Mindoro

Polillo Is.

Subic Bay

Seaport

NAIA Terminal 3

LUZON URBANBELTWAY

DMIA, Clark

Lucena Port

Cawit Port

BatangasPort

RAIL PROJECTS:

EDSA North Transit (Closing the Loop)

LRT Line 1 South Ext. (Baclaran to Cavite)LRT Line 2, Phase 2 (East Ext. to Masinag)Northrail-Southrail Linkage, Phase I

(Caloocan to Alabang)Northrail-Southrail Linkage, Phase 2

(Alabang to Calamba)Northrail Project Phase 1, Sections 1 & 2

(Caloocan to Malolos to Clark)MRT 7MRT 3 CAPEX

Airports Total (Components) = 5Ports Total (Components) = 8Railways Total (Components) = 9

One of the primary thrusts of the region isto decongest Metro by expanding the publictransport system. The efficient movementand seamless access of goods and people

will lead to a globally competitive UrbanBeltway. To achieve this goal, the NationalGovernment is continuously developing theClark-Subic Corridor, Southern LuzonCorridor, and Metro Manila, and is

addressing critical infrastructure bottlenecksalong national roads and bridges to speedtraffic out of Metro Manila.


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Central Philippines

Camarines

Norte

CatanduanesCamarines

Sur

Albay

Sorsogon

North Samar

Samar Eastern

Samar

Masbate

Leyte

BiliranAklan

Capiz

Antique Iloilo

Guimaras

Negros

Occ.Negros

Or.

Cebu

Bohol

Siquijor

Southern

Leyte

SiargaoCamiguin

Dapitan

Palawan

Kalibo Airport

Balabac Airport

Puerto Princesa Airport

San Vicente Airport

Iloilo Airport

Bacolod (Silay) Airport

Dumaguete Airport

Panglao Airport

Siargao Airport

Southern Luzon Intl.Airport

Guiuan Airport

Kabankalan Airport

Busuanga Airport

San Jose (Carabao Is.)Airport

Tacloban Airport

Cawayan Port

San Pascual Port

Aroroy Port

Claveria Port

Pantao Port

Sibunag Port

Jagna Port

Maasin Port

Limasawa Port

Naval Port

Maripipi Port

Guinsiliban Port

Southrail Project Ph1B & Ph II

Bulan Airport

Ubay Port

Siquijor Port

Balbagon Port

Bogo, Santander &

Daannbantayn Ports

Airports Total (Components) = 85Ports Total (Components) = 22Railways Total (Components) = 2

Through efficient transportation facilities likeroad links, RORO/boat links, feederairports, airstrips and ports for hard-to-reachareas, the region opens and promotes itself asthe countrys tourism center. The cost of doingbusiness in the region can be reduced byimproving ports and airport facilities toaccommodate increasing passenger and cargotraffic. Consequently, the region will be able todevelop its agribusiness, small and mediumenterprises (SMEs), and export potentials.


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9

Sarangani

Zamboanga

del Norte

Zamboanga

Sibugay

Lanao

del Norte

Misamis

OrientalMisamis

Occidental

Camiguin

Davao

Oriental

Davao

del Sur

Surigao

del Sur

Surigao

del Norte

Basilan

Sulu

Tawi-Tawi

South

Cotabato

Zamboanga

City

Cotabato

City

Davao

del Norte

Cagayan de

Oro City

North

CotabatoZamboanga

del Sur

Compostela

Valley

Agusan

del Norte

Agusan del Sur

Ipil

Pagadian

City

Dipolog

City

Ozamis

City

Iligan

City

Butuan City

Surigao City

Maramag

Kabacan

Gen. Santos

City

Tacurong Koronadal

Palimbang

Maitum

Mati

Lanao

del Sur

Tagum

City

Davao

City

SourceofBasicData:DPWH,CAAP,PPA

DIPOLOG

DUMAGUETERORO

MAMBAJAO

JAGNA

RORO

SURIGAOCITYLILOANRORO

ZamboangaLamitanRORO

ZamboangaSiasiRORO

ZamboangaBongaoRORO

ZamboangaSta.MariaRORO

WesternNauticalHighway

EasternNautical

Highway

CentralNauticalHighway

Bukidnon

Sultan

Kudarat

Mindanao Infrastructure Development

CORTESTANDAGMARIHATAG

MARIHATAG

HINATUAN

BISLIGSECTION

Airports Total (Components) = 67Ports Total (Components) = 4

Aims to establish an efficient food logisticssystem that links Mindanao to Manila. Farm-

to-market roads will link food productionareas with major roads leading to themarket, while regional and municipal portswith improved facilities will boost fisherydevelopment


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WESTERN NAUTICALHIGHWAY

PAN PHILIPPINEHIGHWAY

CENTRAL NAUTICALHIGHWAY

EASTERN NAUTICALHIGHWAY

STRONG REPUBLIC NAUTICAL HIGHWAY


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Sub-Sector Performance


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Road Transport


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Source: LTO

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2000 2001 2002 2003 2004 2005 2006 2007

Cars PUJ/UV Trucks PUB MC/TC Trailers

2000 2001 2002 2003 2004 2005 2006 2007

Cars 54,054 36,181 44,119 37,542 37,369 31,666 27,546 25,266

PUJ/UV 56,484 39,401 58,964 54,580 66,843 64,412 62,444 65,952

Trucks 6,657 5,599 7,072 5,587 6,624 6,270 5,467 5,138

PUB 11,287 8,232 11,251 8,413 10,754 9,285 7,623 7,341

MC/TC 54,058 51,968 54,306 55,471 61,173 67,098 65,971 62,171

Trailers 1,141 853 1,182 1,005 985 1,514 995 2,922

Total 183,681 142,234 176,894 162,598 183,748 180,245 170,046 168,790

Trends in Motorization - Metro Manila (for hire)


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Source: LTO

-

50,000

100,000

150,000

200,000

250,000300,000

350,000

400,000

450,000

500,000

550,000

600,000

2000 2001 2002 2003 2004 2005 2006 2007

Cars PUJ/UV Trucks PUB MC/TC Trailers

2000 2001 2002 2003 2004 2005 2006 2007

Cars 69,464 40,908 45,161 43,128 51,889 44,585 41,061 37,648

PUJ/UV 183,055 188,897 216,717 212,968 228,260 222,094 212,620 215,529

Trucks 17,991 17,032 18,306 16,872 18,229 17,325 18,144 16,919

PUB 29,833 27,632 30,069 26,987 28,644 25,992 24,118 23,142

MC/TC 491,113 517,087 537,811 527,561 555,340 584,698 588,695 591,254

Trailers 2,843 2,467 2,798 3,144 2,564 3,183 2,312 2,475Total 794,299 794,023 850,862 830,660 884,926 897,877 886,950 886,967

Trends in Motorization - Nationw ide (for hire)


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Source: Land Transportation Office (LTO)

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2006 2007 2008

NumberofUnits

Year

Cars UV SUV Truck Buses MC/TC Trailer

Nationw ide Motor Vehicle Registration,2006-2008


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In 2006, approx imately 1.7 b il lion passengers and 25.9million tons of freight were conveyed by roads - representinga 98% share in passenger traffic and a 58% share in cargo

traffic.

Traffic on the Roads

Number of motor vehicles grew by 6.0% annually from 2000to 2008 to reach 5.9 mil l ion vehicles, or 7 vehicles for every100 persons. Until 2004, util ity vehicles were

dominant, accounting for 41.8% of the total fleet of motorizedvehicles.

In 2005 onwards, the composit ion changed as motorcyclesand tr icycles increased more rapidly than the other vehicle

types, now accounting for almost half of all vehicles on roads. A total of 5.9 million motor vehicles were registered in the country in

2008, including trailers of the total vehicle population in 2008, close to2 million were motorcycles and tricycles, which recorded a substantial

annual growth at 11.6%. On the other hand, the number of buses usedfor public transport is declining at an average rate of 1.6% a year.


Road Transport


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The road netw ork has improved, but is stil l lagging As of the end of 2008, the Philippine road network had a total length

of 205,778 km. National Roads accounted for 29,650 km or14.4%, Provincial Roads 15.2%, City Roads 3.4%, Municipal Roads

7.7 %, and Barangay Roads 59.3%. The national roads, about 72% are paved with concrete and/or

asphalt. For local roads, only about 22% (or 44,000 km) are paved,while the rest are gravel-surfaced and earth roads.

The countrys road density is by 0.22 km of paved road persq. km. of land area and 0.73 km of paved road per 1,000population.

In 2001 to 2008, the percentage of paved National Roads increasedmarginally, from 70.7% to 73.1%. Over the same period, thepercentage of paved National Roads in good and fair condition (usingthe Visual Condition Rating) improved from 47% to 54.8%. As of the

end of 2006, the average International Roughness Index (IRI) ofNational Roads was measured at 6.8, which is in the poor category.


Road Transport


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Comparison of Road Indices w ith Other Countries

Sources: Compiled from CIA Factbook, DPWH, ASEAN and UNESCAP Yearbooks

Country Total km

Paved Ratio %

Km per 1,000 km 2

land area

Km per 10,000population

All Roads

Natl Roads

Japan 1,193,000 79.0 3,194.294.0

Vietnam 251,787 32.2 71 682.925.8

Indonesia 372,929 55.3 214.1 16.5

Thailand 217,708 82.0 97.2 424.338.4

Malaysia 77,695 76.3 298.936.3

Phil ippines 205,778 21.0 73.0 685.922.4

Road Transport


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Reforms in Governance

LGUs assuming full responsibility for financing andmanagement of local roads, w ith the DPWHfocusing on about 28,000 km of strategic nationalroads;

Establishment of a National Highway Authority;

Shifting road investments to regions with less density andlower road quality, with Mindanao getting a larger share

Wider implementation of RIMMS in 9 business processes

of DPWH. Not much has been achieved in these fourareas.


Road Transport


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Road Safety

The national cost of traffic accidents for the Phil ippines wasestimated at US$1.9 bi ll ion (or roughly 2.8% of the country's

GDP).

In the first three months of 2009 alone, the Philippine National Police hasrecorded more than 9,000 vehicular accidents compared to the historical

average of less than 4,000 and a record-high of 14,794 for the whole of2008. In terms of fatalities, traffic accidents average 2 fatalities for every 10accidents (compared to an average of 6 fatalities for every 10 maritimeaccidents).

In terms of number fatalit ies per m il lion vehicles, the Phil ippinesrecorded a better result at 215, against Malaysia (373), Singapore(250), Indonesia (261), Thailand (488), and Vietnam (558).


Road Transport


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Road Accident Rates in Selected Countries


Road Transport


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Revenues from the Motor Vehicle Users Charge (MVUC) collections

have increased from PhP6.65 billion in 2004 to PhP8.05 billion in2006. As of November 12, 2007, the Road Board has a totalavailable fund of PhP6.82 billion. There has also been a significantincrease in the release of funds - from PhP4.92 billion in 2004 to

PhP11.55 billion in 2006. The funds were used for maintainingnational, provincial and city roads nationwide, improvingdrainage, and installing adequate traffic light, road safety andpollution monitoring devices.

Motor Vehicle Users Charge (MVUC)

Road Transport


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MV Inspection and Maintenance

The development of motor vehicle inspection facilities in the Philippines started inthe early 1980s when the DOTC/LTO, in collaboration with the Japan InternationalCooperation Agency (JICA), introduced the first Motor Vehicle Inspection System

(MVIS) in the country. The plan envisaged the establishment of computerized motorvehicle inspection stations all over the country. The plan called for at least onestation to be operational in each region by 1990 to evaluate the roadworthiness ofvehicles prior to registration.

In 1985, the pilot MVIS was established at the LTO Compound in Quezon City. Withits limited capacity, it performed the inspection of taxis in Metro Manila.

In 1992, twe lve (12) MVIS lanes were donated to the LTO by theJapanese government and were installed in Luzon: Metro Manila, (North

MVIS & South MVIS w ith 4 lanes each), San Fernando, Pampanga (2lanes), and Lipa City, Batangas (2 lanes). Through time, however, theseMVIS faci l i t ies have deteriorated due to inabi l i ty of the government toprovide full resources for upkeep of the system.

Road Transport


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In 2006, revived the full utility of the existing MVIS facilities in view of thecontinuing deterioration of air quality in mega cities, using the Motor

Vehicle User Charges (MVUC).

The first phase of the plan, which is ongoing, covers the following urbancenters: Metro Manila (North and South), Lipa, Pampanga, Cebu, and

Davao Cities. There are 4 other phases which will eventually cover allregional sites in the country.

The current facilities in North & South Metro Manila, Davao, Cebu andLipa, are being operated by the LTO Regional Offices, as part of theirregular regional operations. Once

improved/expanded/rehabilitated, these MVIS facilities are planned bythe DOTC and LTO to be continuously managed, operated, and maintainedby the Philippine government through the Regional LTOs.

Road Transport


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The preference by DOTC for a business-as-usual scenario of theimproved MVIS facilities may be rooted in the need for a painless

transition. Perceived disadvantages of the current setup are the difficulty ineffecting new and improved procedures and performance standards. Aprivatization option is not being ruled out. In 2005-2006, the DOTCevaluated a couple of privatization schemes, which are cited in studiesdone by the USTDA (2004) and ADB (2005).

Vehicle testing for both emissions compliance and roadworthiness isconducted in the MVIS centers/facilities or the private emission testingcenters (PETCs), as part of the overall motor vehicle registration process

under the current LTO setup.

Road Transport


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Functions Progress Lead Agency

MV & Fuel StandardsDevelopment

Ongoing; DTI has organized TWGsfor standards formulation

DTI

MV Emissions Testing Ongoing, through MVIS & PETCs DOTC-LTO

MV Roadworthiness Testing Ongoing, through the MVIS LTO

Roadside Inspection toenforce emission standards e.g Anti-Smoke belch ing

Ongoing, through LTO, deputizedunits (DENR & LGUs); LGUs withordinances

LTO

MV Maintenance & RepairProgram

Voluntary basis by MV owners/PUVoperators

None yet

Accreditation of MV repairshops and private emissiontesting centers

Ongoing DTI

Authorization andperformance monitoring ofprivate emission testing

centers

Ongoing DOTC

Government Agencies Involved in Implementation of a nationalMotor Vehicle Inspection and Maintenance program

Road Transport

d


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Road Transport

R d T


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28

TSP Concentration Road Traffic-Related Monitoring Stations

Sources: Department of Environment and Natural Resources Environmental Management Bureau, Philippines (DENR-EMB), DENR National CapitalRegion, Philippines (DENR-NCR) and Partnership for Clean Air (PCA)

70% of the air pollution in

Metro Manila is attributedto transport

AirQuality

in

Metro

Manila

Road Transport


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29

R d T t


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30

Cost of pollution as a percentage of income ranges from2.5% to 6.1%

About 2,000 people die each year as a result of exposureto PM10. The model estimates an economic loss of aboutUS$140 million

About 9,000 people in these places suffer from chronic

bronchitis. The model estimates an economic loss ofabout US$120 million

Number of people suffering from PM10 relatedrespiratory symptoms is quite high. The model estimatesan economic loss of about US$170 million

Modeling by the World Bank on the effects of PM10 in Metro Manila, Davao, Cebu and Baguio

Source: http://www.adb.org/Vehicle-Emissions/phi/health.asp

Total economic cost of PM10 exposure in thesefour places: US$430 million

EconomicCosts

of

Air

Pollution

in

Key

Cities

Road Transport

R d T t


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Energy Consumption in Road Transport

The current estimate of the countrys on-road fuel economy is 14l i ters/100 ki lometers, way below Chinas rate of 9.5 l i ters/100

kilometers.

The transport energy use in the Philippines has increased significantly from1.9 MTOE in 1980 to 10.9 MTOE in 2008, about 6.4% per year. Over thatsame period, vehicle population expanded at 6%; while the global averageenergy use in transport grew by only 2.7%. With all the energy derivedfrom petroleum (where the transport sector accounts for 65.6% of total oilconsumption), increases in future transport energy use will translate intobigger emissions of carbon.


Road Transport

R d T t


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Road Transport

Source:DepartmentofEnergy(DOE)

R d T t


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The Road Users Viewpoint A survey conducted by Bantay Lansangan (560 random samples of road

users) showed a 25% satisfaction rating.

CriteriaSatisfied

%

Dissatisfied

%

Net Satisfaction

Rating

1. Overall rating of road services 59.5 34.9 +25

2. Road safety 41.8 32.9 +9

3. Flow of traffic 69.2 26.2 +43

4. Road surface 65.4 31.0 +34

5. Overall bridge condition 68.4 31.6 +376. Maintenance 35.0 33.0 +2

7. Overall performance of DPWH 48.0 38.3 +10

8. Integrity level of DPWH 91.4 8.6 -83

9. Sincerity in fighting corruption 38.2 42.3 -4

10. DPWH meets concerns of the community 88.9 11.1 +78

11. DPWH practices transparency 66.7 33.3 +33

Source: Roadwatch Survey, 2008

Road Users Perception

According to the first Road Sector Status Report Card (RSSRC), datedSeptember 2009, prepared by Bantay Lansangan, the average road user

cost in 2007 was PhP 21.17 per vehicle-km, which is 41% morethan the optimal road user cost of PhP 15.17. The road user cost in2007 was slightly higher than the PhP 21.13 in 2006.

Road Transport


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Maritime Transport

Ma itime T anspo t


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Sea Traffic

Cargo throughput for the period 1999-2008 hoveredaround 140 to 160 million tons per year. I t registereda high of almost 157.5 million tons in 2007, and thendropped again to below 150 mil l ion tons in 2008 .Attributing the fall to the global financial crisis of 2008 may

not be the only explanation, given the countrys relatively lowintegration with global trade.


Maritime Transport

Maritime Transport


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Domestic cargo traffic showed a moredramatic decline during the same period.

The volume of domestic cargo handled in2008 was even less than the volume in1999. This could be due to a change inrecording, since RORO traffic is notcaptured by the PPA data.

Cargo Traffic, 1999-2008

Foreign cargo continued to grow, withan 8-year average of 4.8% per year

punctuated by a drop in 2008. Thedecline was felt more in private ports,which posted an 18% drop. The privateports in Cagayan de Oro suffered themost as its foreign cargo throughput in

2008 was just a little over one milliontons compared to more than twelvemillion tons in 2006.Source:DraftNationalTransportPlan,14Dec.2009

Maritime Transport

Maritime Transport


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A declining trend isapparent. From a peak of24.6 million passengersin 2003, traffic droppedto 21.4 m illion in

2008, or 4% lower than2007 . While the figures arefor PPA ports only and donot capture the morenumerous small and feeder

ports, they are reflective ofthe overall situation in thetraditional port system of thecountry.

Passenger Traffic, 1999-2008

The drop in passenger traffic is more dramatic in the Port of Mani la from3.4 mil lion in 2001 to 2.3 mi llion in 2008.

Foreign container traffic has continued to grow from 1.75 m illion to 2.52mil l ion TEUs, or 6% p.a. over the last six years. In contrast, usage of

containers on the domestic trade declined by 3% during the same period.


Maritime Transport

Maritime Transport


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Sea Port System

There are more than 1,490 seaports in the Philippines, classified ascommercial , fishing, and feeder ports.

The public common-user ports totalled 331 (or 40% of the commercialcategory) as of 1997, the ports of importance in the domestic andinternational trade are those owned and operated by PPA and CPA.

In the last eight years, new port capacit ies and faci li ties wereprovided in Batangas Port (which was intended to provide relief toManila Port), Subic Container Terminal Port (an alternative to

Manila), and in Phiv idecs MICT (an alternative to Cagayan de Oro).


Maritime Transport

Maritime Transport


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Aids to Sea Navigation

There are 561 lighthouses distributed

throughout the coastline of thecountry. Out of this number, two areoperated by private owners. Many ofthese facilities have been built in thelast 8 years through financial and

technical assistance from Japan (MSIP I and MSIP B), the United Kingdom(MSIP II) and Spain (MSIP III).

Maritime Trunk RoutesSource:DraftNationalTransportPlan,14Dec.2009

Maritime Transport

Maritime Transport


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Level of Investments

The cumulative investments of PPA in the last 10 yearsreached about Php24 Bill ion, or an average of Php2.4billion annually. PPAs single biggest project is the Portof Batangas Development Project already in Phase IIand ODA-funded by JBIC (now JICA). The total

investment for this project amounted to almost Php8bill ion.

In addition, the development of small municipal ports, deemed

socially-important, yet mostly non-viable. The aggregateinvestment for these port projects totalled PhP 3.7billion from2000 2009.


Maritime Transport


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Maritime Transport


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The Nautical Highw ay From 63 RORO-capab le ports in 2002 when the Strong Republ ic

Naut ica l Highway Project (SRNH) was launched, the Road-RORO-Terminal System (RRTS) development during the last five years has

brought to 100 the number of ports equipped w ith RORO ramps (18base ports, 55 term inal ports, and 27 municipa l ports) or close to 65%of the target 155 ports for RORO port improvement.

The development of RORO routes in the country expanded the coverage of bus

and truck services to inter-island connections, thereby increasing the overallaverage distance traveled by these types of vehicles. Recent studies on inter-regional passenger and freight flows indicated that vehicle kilometerstraveled for cars, provincial buses and trucks have increased by asmuch as 20% since 2000.

The RORO routes comprise 919 kilometer (land) and 137 nautical miles (sea) thatconnect Luzon to Mindanao through several islands in the Visayas. Onegovernment report claimed a travel cost reduction by 37% to 43% forpassengers and 24% to 34% for cargo, compared to both conventional

sea and air travel; and travel time savings of 10 to 12 hours comparedto ordinary sea travel.


Maritime Transport

Maritime Transport


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Domestic Shipping In an inventory of routes and vesse ls in 1999, 16 of the 53

shipping companies were formed after 1992. Of the 75 companiesoperating before 1992, only 49% remained in operation by 1999.

The qual ity of cargo services has improved as a result of morechoices of carriers, the int roduct ion of RORO vessels, andincreased containerizat ion.

Competition on tertiary routes, however, has not intensified despiteliberalized entry. In these routes, service quality is still poor due to theprevalence of old wooden-hull vessels.

The quality of passenger service has shown dramatic improvements in the

primary and secondary routes. New facilities and amenities were introducedon board while passenger accommodation and ticketing and bookingfacilities were upgraded. Fast craft ferries became popular on the secondaryroutes in the Visayas seas, due to its shorter travel time. However, theoperations could not be sustained due to oversupply and high cost ofoperations.


Maritime Transport

Maritime Transport


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Domestic Shipping In 2004 study of the domestic shipping industry concluded that

the industry is highly concentrated, in the sense that the top fiveoperators accounted for more than 90% of the passenger and

freight volumes. Those operators were also found in most of theprimary routes; in about 50% of these routes, there was only oneservice provider. Competi tion is even weaker on the secondary andtertiary routes, where 59% , or, respectively, 78% , have only one

provider.

MARINA has kept the third class passenger tariff intentionally low, at belowcost, because the users are mostly from the low-income brackets. Theyconstitute about 70% of the total traffic. As a result, passenger operations

are cross-subsidized by cargo service in cases where a shipping lineprovides both services or operated combined cargo-passenger vessels.


Maritime Transport

Maritime Transport


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Indicator Philippines Other Countries

Stevedoring rates (per 20 TCL) $62.37 in NorthHarbor, ~$40 inMICT

$26.24 in Calcutta; $36.50 in Busan

Port tariff (1,100 TEU class ship) $32,437 in Manila $48,509 in Jakarta $99,419 in Singapore;$34,163 in Bangkok; $40,818 in Saigon Port;$129,026 in Hongkong

Logistics Cost for Export ($/TEU,inclusive of trucking, customsclearance, terminal costs,

miscellaneous fees)

Manila = $384 Hongkong=470; Singapore=239; Bangkok=345; Jakarta=410

Cargo handling charges ($/TEU) Manila= $40 to $60 Calcutta= 133; Busan = 82.80; Hongkong =Hongkong =141.20; Shanghai= 74.90;Belawang (Indonesia) = 81.00

Selected Performance Indicators in Ports, Shipping and Logistics

PPA is assured of continuing increase in its share of cargo-handling revenues. Shippingcompanies do not find their longer stay in ports expensive, since wharfage anddockage remained low, while some of them have ventured into the lucrative port-sidebusiness. The cargo handlers have received periodic increases in their tariff ranging

from 35% to 90% per year. The cargo handling cost have become a significant slice oftotal sea transport cost - ranging from 29% to 46% for break-bulk cargoes, and from10% to 43% for containerized cargoes.

Source: PPA and UNESCAP


Maritime Transport

Maritime Transport


46/125

Route $/ TEU VoyageTime (hrs)

Manila-Cebu 399 20

Manila-Davao 654 36

Manila-Zamboanga 387 33

Cebu-General 283 10

Route toFreight$/TEU

VoyageTime

(in hours)Singapore 550 96Hong Kong 350 48Klang, Malaysia 600 144Busan, Korea 850 120

Long Beach/LA 1,985 408Tokyo 780 20Taiwan 350 48Sydney 850 288 Antwerp 950 888

Note: Ratesport-to-port, discounted for volume shipments.Source: WGA, Cebu Ferries

Ratesport-to-port, discounted for volume shipments.Source: Direct Container Line Phils

The international freight rates are higher due to theneed for transhipment, but not unreasonable

Inefficiency has been an even greater problem for inter-island shipments, where unit costs are high and transit times, including time in port

The shipping cost differential between the domestic and international routes is duemore to a difference in economic structure, than to port inefficiencies. The average

vessel size in domestic shipping is less than 1,000 GRT against the 10,000 GRT average forocean-going vessels. The one-day dockage and usage fee for a 10,000 GRT vessel in aPhilippine port is less than the 12 hours charge in most Asian ports. Given the relatively smallvessel size, it is not surprising that inter-island shipping costs are relatively high. The relativelylong turnaround times in the domestic ports and their limited capacity offset any potentialsavings in capital costs most interisland vessels being fully written off- and due to low crewcosts.


Maritime Transport

Maritime Transport


47/125

Safety

The maritime sub-sectors record is alarming w ith an averageof more than 200 accidents per year over the last decade.

Year Number of Incidents Fatalit ies Accidents

2000 151 177

2001 168 59 ML Anahada (124 dead + 14 missing);2002 152 73 MV Carmella in April 2002 (30 dead)

2003 255 74 MV San Nicolas (43 dead + 21 missing)

2004 227 144 Superferry 14 bombed in Feb 2004 (116

dead)

2005 122 252006 114 62

2007 & later Princess of the Stars capsized in June 2008

(312dead + 461missing), MV Baleno

9, MV Catalyn B

Maritime Accidents

Source: Philippine Coast Guard

Maritime Transport


48/125

Maritime Incident and Lives Lost in 2008

Source: World Casualty Statistics 2008

Maritime Transport


49/125

Maritime safety and security measures are being implemented in thedomestic trade in compliance with the International Safety Management(ISM) and the National Safety Management (NSM) codes. Compliance with

Rule VI of RA No. 9295, An Act Promoting the Development of thePhilippine Domestic Shipping, Shipbuilding, Ship Repair and ShipBreaking, Ordaining Reforms in Government Policies Towards Shipping inthe Philippines, and for Other Purposes, is also being monitored.

The Japan International Cooperation Agency (JICA)-assisted ProjectEnhancement of Ship Inspection was likewise completed in 2005. Underthe project, trainings/seminars on the enhanced Ship Safety InspectionSystem (SSIS) were conducted with Maritime Industry Authority (MARINA)and Philippine Coast Guard (PCG) inspectors as participants.

The PCG has enhanced ship inspection with an annual average of 307,780Mandatory Pre-Departure Inspections (MPDI), 627 Emergency Readiness

Evaluations (ERE), 627 Port State Control Inspections (PSCI), 1,353 FlagState Control Inspections (FSCI), and 32,485 Safety of Life at Sea (SOLAS)Compliance Inspections.

Safety

Maritime Transport

Maritime Transport


50/125

In 2005, a Study on Wooden-Hulled Ships (WHS) was completed, whichrecommended standards, rules, and regulations for the continued operationof existing WHS and the construction, safety, and operation of new WHS.Through RA 9295 and its IRR, a Mandatory Vessel Retirement Program(MVRP) shall be implemented to modernize domestic ships by retiring allunclassed ships and retiring or replacing ships that have already reachedthe maximum allowable age as stipulated under the program.

The program will be facilitated by establishing a viable financing scheme tosupport local construction of needed vessels. Under EO588, Strengthening the Philippine Shipbuilding and Ship Repair (SBSR)

Sector and Instituting Measures to Promote Its Growth and Developmentissued on December 8, 2006, the MARINA, in coordination with theinteragency Ad-Hoc Committee and Technical Working Group, completedthe Comprehensive Development Plan for the Philippine Shipbuilding andShip Repair Industry on October 16, 2007.

Safety

Maritime Transport

Maritime Transport


51/125

The target to reduce maritime accidents by at least 50 percent by 2010 hasbeen exceeded as of third quarter 2007, with only 40 recorded maritimeaccidents compared with the 227 accidents recorded in 2004 despite

increased maritime traffic due to the development of the RORO system.

With respect to compliance with international safety standards, adherenceis being implemented by adopting the International Ship and Port Facility

Security (ISPS) Code. A Vessel Traffic Management System (VTMS) hasbeen installed in the Port of Manila to comply with security provisions ofthe Code. There are also plans to install the system in other major portsacross the country.

Safety

Maritime Transport

Maritime Transport


52/125

From 2004 to 2007, government worked to provide the needed transportinfrastructure that complements the roll-on roll-off (RORO) system and opens upnew economic opportunities, reduces transportation and transaction costs, andincreases access to social services.

The improvement of the nautical highway system maximizes the use of the Road-RORO Terminal System (RRTS) to transport produce from Mindanao through

Visayas to Luzon. It reduced travel time by 12 hours, and decreased transportcost by 37 percent to 43 percent for passengers and 24 percent to 34 percent forcargo.

The Maritime Equity Corporation of the Philippines under the NationalDevelopment Company (later renamed the NDC-Maritime Leasing Corporation orNMLC) was established in 2005 to facilitate the acquisition of maritime ROROvessels for leasing to qualified operators under a lease purchase agreement.

The government aims to complete the nautical highway by improving 837.8kilometers (km) of national roads along the Western Nautical Highway, 413.6 kmon the Central Nautical Highway and 76.4 km on the Eastern Nautical Highway.

Roll -On-Roll-Off (RORO System)

Institutional Strengthening

Maritime Transport

Maritime Transport


53/125

To enhance the countrys exports and private sector participation in port expansionand operation and maintenance, the modernization of the Manila North Harbor wasbid out to the private sector to finance, develop, manage, operate, and maintain thevarious facilities and services at the harbor.

The Philippine Ports Authority (PPA) issued Administrative Order (AO) No. 03-2004prescribing guidelines on developing, constructing, managing and operating ferryterminals under the RRTS. The AO also simplified the procedures in theprocessing/issuance of required Clearance to Develop/Permit to Construct, andCertificate of Registration/Permit to Operate.

In addition, to coordinate port development plans and ensure an integrated andefficient port system, AO 123 was formulated, authorizing the Secretary of theDepartment of Transportation and Communications (DOTC) to perform all necessarypowers and functions to connect the country by developing transportation networkssuch as the RORO system.

Roll -On-Roll-Off (RORO System)


Maritime Transport

Maritime Transport


54/125

Other Outcome Key reforms that were stated in the MTDP, but which were not

achieved, include:a) separat ion of port regulation and operat ion;

b) decentralizat ion of port management in preparation to portsprivatization; and

c) discontinuat ion of levies paid by private ports to PPA.

Two major container port projects outside its umbrella have taken off, with

substantial JBIC funding. These are the Subic Port (under SBMA) and theMindanao Container Port (under the Phividec Industrial Authority). The firstone could offer an alternative to the port of Manila, while the second is athreat to PPA domination is the port of Cagayan de Oro.

An alternative port system, the RRTS, was also launched in 2002 underExecutive Order No. 170. It promises to provide a lower-cost alternative (inthe absence of cargo-handling charges) to PPA ports in the short-distancemarkets, as well as time savings.


Maritime Transport

Container Throughput and Berth Length


55/125

Source: 1)Lloyd's List Port of the World 2008, 2) Containerization International Yearbook 2009, 3)International Transport Handbook 2009

g p gof 47 Designated Ports in ASEAN

Container Throughput of


56/125

g pASEAN Countries (2000 - 2007)

0

5,000

10,000

15,000

20,000

25,000

30,000

2000 2001 2002 2003 2004 2005 2006 2007

(1,0

00T

EU)

Indonesia

Malaysia

Philippine

Singapore

Thailand

Vietnam

Source: Containerization International Yearbook

Annual Average GrowthRate of Member States

8%

Batangas Port


57/125

Year

Container Cargo Volume (1000 TEU's)

Import Ex port EmptyTrans-

shipment To ta lVolumeIncrease

2010 4.4 3.7 1.8 0.2 10.0

2011 17.7 14.9 7.1 0.3 40.0 300%2012 31.3 26.1 12.4 0.3 70.0 75%

2013 44.7 37.2 17.6 0.5 100.0 43%

2014 49.2 41.0 19.4 0.5 110.0 10%

2015 56.8 47.4 22.4 0.6 127.2 16%

2016 62.1 51.7 24.5 0.6 138.9 9%

2017 69.6 58.1 27.5 0.8 155.9 12%

2018 80.2 66.8 31.7 0.8 179.5 15%

2019 98.7 82.2 39.0 0.9 220.8 23%

2020 112.7 93.9 44.5 1.1 252.1 14%

2021 124.8 104.0 49.3 1.2 279.2 11%

2022 134.1 111.7 52.9 1.2 300.0 7%

Projected Container Volume for 2010-2034 Cargo Forecast

Year

Container Cargo Volume (1000 TEU's)

I mport Export Em ptyTrans-

sh ipment To ta lVolumeIncrease

2023 134.1 111.7 52.9 1.2 300.0 0%

2024 134.1 111.7 52.9 1.2 300.0 0%2025 134.1 111.7 52.9 1.2 300.0 0%

2026 134.1 111.7 52.9 1.2 300.0 0%

2027 134.1 111.7 52.9 1.2 300.0 0%

2028 134.1 111.7 52.9 1.2 300.0 0%

2029 134.1 111.7 52.9 1.2 300.0 0%2030 134.1 111.7 52.9 1.2 300.0 0%

2031 134.1 111.7 52.9 1.2 300.0 0%

2032 134.1 111.7 52.9 1.2 300.0 0%

2033 134.1 111.7 52.9 1.2 300.0 0%

2034 134.1 111.7 52.9 1.2 300.0 0%

China-ASEAN Free Trade Agreement (from 1 Jan 2010)


58/125

Yunnan

45 mil Pop

Guangxi

50 mil Pop

g ( )Benefits: Increased trade, investment & market size

Strategic Geographical Location


59/125

BohaiEconomicZone

Yangtze River Delta

Pearl River Delta

Malacca Strait

?

Tokyo Bay


China Energy Security & Alternat ive Access


60/125

Time and costcompetitive

Economic andlogistics potentials

Relieving

congestion inStrait of Malacca

Intermodal

infrastructuredevelopment

gy yto Indian Ocean

Land Corridor


61/125

Land Corridor

A corridor is only as strong as the weakest link

Land Corridor

The Case of GMS-East West Economic Corridor


62/125

The Case of GMS East West Economic Corridor

Road Infrastructure is not a major issue but intra-connectivity within is.


63/125

Transport is a derived demand.Development of industrial/ economic

corridor generally dictated by the

private sector. Did w e set ourselves forfailure from very beginning???

The Case of Batangas Port


64/125

The Case of Batangas Port

Risks/ Challenges Response1. Low utilization of port facilities

- irregular port of call of containervessels

Logistic infrastructure development study Communication plan to achieve buy-in

support of stakeholders/locators

Convergence forum with stakeholders Explore possible assistance of dialoguepartner on the provision of vessel

Market/provide incentives to biginternational shipping companies to utilize

Batangas port as their maritime hub.2. Domestic Competition

- South harbour/ICTSI- Subic

Assist port operator with business plan- cargo consolidation/inland clearance

depot

- time/distance cost analyses- time/space analyses

3. Global/regional market competition Regional cooperation, including China,Japan, Korea and India

4. Lack of policy directions- Role of MICT, Subic and Batangas port Conduct SUMAC ports strategy study Build case with NCC


65/125

Civil Aviation

Civil Aviation


66/125

Air Traffic

Passenger traff ic has grown rapidly in the last seven years, withdomestic growth outpacing international. Cargo volume domesticand international, however, registered sluggish growth low er thanthe economys average rate of expansion.

2001 2002 2003 2004 2005 2006 2007 2008

Pax Domestic (000) 12,233 12,288 13,031 15,094 14,531 15,712 21,110 23,668

Pax Intl (000) 7,732 8,026 7,703 9,052 9,981 10,557 12,362 12,763

CargoDomestic (000

tons)

248 309 253 265 261 232 342 257

CargoIntl (000 tons) 261 287 280 318 310 307 317 280

Air Transport Traffic Statist ics, 2001-2008

Source: Civil Aviation Authority of the Philippines

Civil Aviation


67/125

Growth Rates in Air Cargo and Passenger

The 8-year year-on-year average growth rates in passenger volume were9.8% for domestic and 7.7% for international. In comparison, the economygrew by an average of 4.4% . In effect , the sectors performance wasconsistent with the industry s rule-of-thumb that demand for air travelgrows tw ice as fast as GDP.That it exceeded the expected growth in domestic airtravel can be explained by consumers positive response to the airlines marketing andlow-fare offerings. For air cargo, the comparative figures were only 2.4% and1.3%, respectively.


Civil Aviation


68/125

Domestic air traff ic was concentrated in 20 airports (out of 85). International traff iccentered on only five gateway airports (out of 10) of which 95.5% was accounted for by

Manila and Mactan (Cebu). The performance of Laoag International Airport (Ilocos Norte) surpassedthat of Davao in the south of Mindanao especially in cargo traffic. It would seem that Laoag benefitedfrom the open-skies policy, which had been adopted in the 1990s, but was limited only to Laoag.

Distribution of Air Traffic by Airports

Strong tourism traffic explains the substantial growths of the airports of

Kalibo, Caticlan, Laoag, Tagbilaran, and Puerto Princesa. Pagadian airports record, on the other hand, ispoor: In 1995, the airport recorded more than 50,000 arrivals and departures. By 2008, the traffic haddropped to zero.Source:DraftNationalTransportPlan,14Dec.2009

Civil Aviation


69/125

Air Infrastructure

The Ph ilippines has 254 airports, of which only 85 are publicand provided wi th paved runways. They have varying

degrees of compliance w ith international aviation standards.Ten airports are classified as international, of which seven areconsidered class 1. About half of the 85 top airports are classified ascommunity airports, which are small with short runways and serving

only general aviation. The middle category is occupied by 34 primaryairports of which 15 are rated as Class 1. Pagadian, which recordedzero traffic in 2008, belongs to this category. Seven of 19 class 2primary airports have very little traffic (less than 20 passengers a

week).


Civil Aviation


70/125

To be globally competitive andaddress safety issues raised by

tourists, the government is in theprocess of implementing theCommunications NavigationSurveillance/Air Traffic Management

(CNS/ATM) System in accordance withInternational Civil AviationOrganization (ICAO) standards.Furthermore, the Nationwide AirNavigation Facilities ModernizationProject (Phase 3), which aims toreplace ageing air navigationequipment, was completed in March2004.

Communication Nav igation Satellite/ Air TrafficManagement (CNS/ ATM)

Civil Aviation


71/125

Airline Services Air transport services have become competitive resulting largely from

Executive Order (EO) 219 issued in 1995. New players entered the domesticscene, such as Cebu Pacific, Air Philippines, Asian Spirit, Grand

Airways, Mindanao Express, Pacific Airways, Laoag International Airlines, andSouth East Asian Airlines. Consolidation and mergers since 2000 reduced thenumber of viable operators a pattern observed in many other countries thathave deregulated their aviation industry.

A research study of ten routes covering the period 19812003, concluded that airfare per k i lometer was 10% lower, onaverage, on routes w i th at least two airlines. Twenty-threeroutes, representing more than 90% of domestic airlinepassengers, have at least two airlines by 2003, indicating that mostpassengers benefited from lower fares, more frequent services, andmore consumer choices.


Civil Aviation


72/125

Sub-Sector Governance The proposal to corporatize the aviation administration took more

than 15 years to realize. It remains to be seen whether the newinstitu tion w ill live up to earlier expectations.

While it may be too early to evaluate the performance of the newbody, some features in its statute are contrary to good practices:

a. Board of Directors composed of five department Secretaries, who, becauseof existing prohibitions on multiple compensations, are likely to delegatetheir functions to lower-level officials;

b. The combination of regulatory and commercial powers within one agencylends itself to the risk of conflict-of-interests;

c. Failure to define the authoritys relationships with the autonomous airportbodies (over the international airports of Manila, Subic, Mactan-Cebu, andClark) and with the Civil Aeronautics Board.



73/125

Civil Aviation


74/125

Safety The FAA dow ngraded CAAP from Category 1 to Category 2 status on

04 January 2008, aviation capability in providing safetycertification and oversight for international carriers, citing among

others:- inadequate and, in some cases, nonexistent regulatory legislation;- lack of advisory documentation;- shortage of experienced airworthiness staff;

- lack of control on important airworthiness related items such as issuanceand enforcement of Airworthiness Directives, Minimum Equipment Lists,investigation of Service Difficulty Reports, etc.;

- lack of adequate technical data;- absence of Air Operator Certification (AOC) systems, and non-conformance

to the requirements of the AOC System;- lack or shortage of adequately trained flight operations inspectors includinga lack of type ratings;

- lack of updated company manuals for the use by airmen;- inadequate proficiency check procedures; and- inadequately trained of cabin attendants.


Civil Aviation


75/125

Consistent with the principle of separation of operation and regulatoryfunctions in the civil aviation industry, Republic Act (RA) No. 9497 was

enacted into law on March 4, 2008 creating the Civil Aviation Authority ofthe Philippines (CAAP). The CAAP handles technical regulation functionswithout diminishing the role of the CAB.



76/125


77/125

Railway Sector

Railway Sector


78/125

Railway Traffic


Rail transport used to be the dominant mode in Luzon up to the1960s, when the network comprised 1,140 track ki lometers.

The 448-km Manila South Line continued to operate from Manilato Naga up to September 2006, when a major typhoon cut theline to 40 km.

The South L ine was barely attract ive with dai ly passengervolume of less than 1,000. In the last tw o decades, three majorattempts and investments were made to rehabilitate the tracksand provide better trains; al l of which yielded only temporarygains fo l lowed by decl ine in patronage. Bus service on thecorridor, where PNR operates, is more attractive, despite thelower rail fares.

Railway Sector


79/125

Railway Traffic

Passenger traffic on the PNR Main Line South continued todecl ine from 374 thousand in 2000 to 137 thousand in

2006. In September 2006, the line was forced to close due totyphoon-induced damage on a railw ay bridge and tracks.

I ts commuter train operations, which serve main ly the

southern part of Metro Manila, also recorded cont inuingdecline in ridership from 3.5 mi llion in 2000 to 1.9 million in2007.


Railway Sector


80/125

2002 2003 2004 2005 2006 2007 2008

Line 1 107.0 107.24 98.86 104.41 111.08 119.12 138.04

Line 2 2.35 20.69 41.89 47.58 52.93 58.59

Line 3 102.4 112.65 122.61 127.79 122.97 142.69 149.58

Total 209.4 222.24 242.16 274.09 281.59 314.59 346.21

Urban Rail Ridership in Metro Manila:LRT Lines

Ridership has reached almost a million passengers a dayon all three lines, which is about 5% of total daily trips inMetro Manila.

LRT Line 2006 2007 2008

Line 1 61.5 66.5 62.4

Line 2 30.9 34.1 38.8Line 3 76.8 87.7 91.8

Average Load Factors (% )

The average load factors indicate overcrowd ing on Lines 3 and 1 , w i th sufficient capacity on Line 2. In an urbansett ing, where peak loading is the usual

pattern, an average dai ly load factor ofabove 60% is an indicator of congest ion.

LRT Line 2006 2007 2008

Line 1 1.52 1.49 1.56Line 2 1.10 1.02 1.03Line 3 0.96 1.07 1.08

Fare Box Ratio of Metro Lines

Despite the higher ridership on Line 3, its fare box ratio is

lower than Line 1 due to the formers high operatingexpenses under its Build-Lease-Transfer scheme.

LRT Line 2006 2007 2008Fare Subsidy Fare Subsidy Fare Subsidy

Line 1 14.362.67

14.34-4.06

14.22n.a.

Line 2 13.51 14.15 13.93Line 3 13.42 16.92 12.05 18.01 12.34 15.56

Average Fare and Subsidy Per Passenger

The average fare as well as the implicit subsidy per passenger


Railway Sector


81/125

Urban Rail Network

The urban rail network totals 45.8 km in length, consisting of 15 km elevated

Line 1 on a north-south axis, a 13.8 km Line 2 on an east-west axis, and17km Line 3 on a circumferential route. An additional 4km northernextension to Line 1 is under construction.

Ridership on the three Metro l ines continues to expand at 8.8%

yearly average w ith fares stagnant at its 2003 level while thoseof competing buses have increased several times.


Railway Sector


82/125

Governance of Rail Subsector There are several issues in the way the rail sub-sector is

managed, including:

- MRT 3 is operated by DOTC, employing casual employees since 2002,instead of consol idat ing the same with LRTA and al lowing a morepermanent tenure.

- The Northrai l Project is being implemented by an agency with no

business or franchise to engage in rail services.- The long-delayed extension to Line 3 is being built as an extension to

Line 1, w ith long-term consequences on future operations and networkefficiency.

- Line 3 was completed at a cost of $675.5 mil l ion. After eight years oflease payments, the balance on outstanding loan principals should beless than $500m. However, in 2009, the government bought out about75% of the interest of the original investors at about $800m , whichwould be equiva lent to an outstanding balance of $1,060 million.


Global Competitiveness


83/125


The Decline of the Philippines GlobalCompetitiveness Ranking (GCR) from 48 th in 2002

to 87 th in 2009. The fall was mirrored in the declineof the global index for Ease of Doing Business from136 th in 2007 to 144 th in 2009. In contrast, Thailand

which used to be at par with the Philippines in the 1970s -has advanced to the 36th position on the GCR scale.

p


84/125

Transport Infrastructure Rank ings in the GlobalCompetitiveness Report 2008-09


85/125

Source: World Economic Forum, The Global Competitiveness Report, 20082009.

Competitiveness Report, 2008-09

Logistics


86/125

Singapore topped the ranking with and LPI of 4.19. It is perhaps surprising that thePhilippines fared worse than Vietnam and Indonesia, despite the countrys acknowledgedadvantage in IT know-how.

Comparative LPI of Selected Countries


g

Logistics


87/125

The Philippines Logistic Performance Index (LPI) stood at 2.69, good enough for a65th position against other countries, in 2007.

CriteriaVietnam Thailand Malaysia Singapore Indonesia Philippines

Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank

Customs 2.89 37 3.03 32 2.99 35 3.90 3 2.73 44 2.64 53Infrastructure 2.50 60 3.16 31 3.20 30 4.27 2 2.83 45 2.26 86

International Shipments 3.00 47 3.24 32 3.31 28 4.04 2 3.05 44 2.77 63

Logistics Competence 2.80 56 3.31 29 3.40 27 4.21 2 2.90 50 2.65 70

Tracking and Tracing 2.90 53 3.25 36 3.37 31 4.25 1 3.30 33 2.65 69

Domestic Logistics Cost 3.30 17 3.21 28 2.97 72 2.70 113 2.84 92 3.27 19

Timeliness 3.22 65 3.91 28 3.68 36 4.53 1 3.28 58 3.14 70

Overall LPI 2.89 53 3.31 31 3.32 30 4.19 1 3.01 43 2.69 65

LPI Score of Selected Countries, 2007


Energy in Transport


88/125


Energy use in transport is grow ing at 6.4 % ayear, which exceeds the global average of 2 .7% , toreach 10.9 MTOE in 2008.

The estimated greenhouse gases (GHG) emissions in 2007is 29.3 MtCO2 of which road transport contributed about

24 MtCO2.

Maritime and aviation emitted a total of 5.3 MtCO2.


89/125

Civil Aviation


90/125

The FAA downgraded CAAP from Category 1to Category 2 status on 04 January 2008.The Consequences of downgrading intoCategory 2 includes no expansion/increaseof existing number of flights and routes for

Philippine carriers operating into USterritories and heightened operation andairworthiness surveillance by the FAA on

Philippine carriers operating in the USterritories.

Civil Aviation
http://images.google.com.ph/imgres?imgurl=http://www.af.mil/shared/media/photodb/photos/061113-F-9062T-001.jpg&imgrefurl=http://www.af.mil/photos/media_search.asp%3Fq%3Dconvoys%26page%3D3&usg=__bonIRHMRHE2wN32Fg7F7QMcEGu8=&h=1375&w=2182&sz=914&hl=en&start=14&tbnid=vT7i796_7ituRM:&tbnh=95&tbnw=150&prev=/images%3Fq%3DAir%2BCargo%26gbv%3D2%26hl%3Denhttp://images.google.com.ph/imgres?imgurl=http://www.trans-logistic.com/images/globeplane.jpg&imgrefurl=http://www.trans-logistic.com/air%2520freight.htm&usg=__fHesquJTPRQ2OWl9p66Y75LM144=&h=301&w=300&sz=21&hl=en&start=9&tbnid=maPmeay17oY86M:&tbnh=116&tbnw=116&prev=/images%3Fq%3DAir%2BCargo%26gbv%3D2%26hl%3Den


91/125

Filipino Airlines Suffering from Poor Aviat ionRating

Korean civil aviation officials had nixedPhilippine Airlines bid for a Cebu-Seoul route.

Saudi Arabia too may delay resumption of the

flag carriers Manila-Riyadh flights.

Authorities in Japan, HongKong, Singapore, and Australia have begun

inquiring about RPs aviation record andpolicies.

Revenues would be lost from the traditional

high-profit routes.


92/125

Magnitude of theEnvironmental problem

Based on the 2007 NationalEmission Inventory mobile

sources contribute 65%of

the air pollution loadnationwide

Scientif ic evidence suggests that a 450ppm CO2e pathway with over-shoot gives a 40-60% probability to limit global warming to 2 degrees


93/125

Global GHG emissions and pathways for GHG stabil ity

Probabil ity oftemperature

increaseunder 2oC

Expectedtemperature

increase

Source: IPCC WG3 AR4,, den Eizen, van Vuuren; Meinshausen; Global GHG Abatement Cost Curve v2.0, Catalyst analysis

* Climate impact estimates for current proposals calculated using C-ROADS model

17 Gt of reduct ions below BAU in 2020 are required for 450ppm:Current proposals put us on a 700-750 ppm path and 4 degree future


94/125

Global GHG emissions, Gt, CO2e per year

Source: McKinsey Global GHG Abatement Cost Curve v2.0; Houghton; IEA; US EPA; den Eizen, van Vuuren; Project Catalyst analysis

ITS IMPACTS WILL INCREASE,


95/125

ITS IMPACTS WILL INCREASE,BOTH IN STRENGTH & IN FREQUENCY.

It w il l get worse,before it gets better.

Non OPEC Oil Production Forecast


96/125

This is the 2004 CIA predictions of oil production of non OPECmembers and former Soviet Union.

The Road Users in the Future ??


97/125

Developments in the Regional Arena


98/125

Developments in the Regional Arena


99/125

ASEAN-China North-South Corridor-1 (ACNS-1)- China-Myanmar-Andaman Sea Corridor

ASEAN-China North-South Corridor-2 (ACNS-2)- China--Lao PDR/Myanmar-Thailand-Malaysia-

Singapore Corridor

ASEAN-China North-South Corridor-3 (ACNS-3)- China-Vietnam-Lao PDR-Cambodia Corridor

ASEAN-China North-South Corridor-4 (ACNS-4)- China-ASEAN Ocean Corridor

ASEAN-China East-West Corridor-1 (ACEW-1)

- The Straits of Malacca Corridor

ASEAN-China East-West Corridor-2 (ACEW-2)- Vietnam-Cambodia-Thailand-Myanmar

ASEAN-China East-West Corridor-3 (ACEW-3)- Vietnam-China-Myanmar-Bengal-India Corridor

List of Priority Projects of theASEAN-China Increased globalization and

competition for markets and

investment; Emergence of China as a global

economic player;

Increased collaboration ofASEAN withChina, Japan, Korea, and India;

China-ASEAN Free Trade Agreement (from 1 Jan 2010)Benefits: Increased trade, investment & market size


100/125

Yunnan

45 mil Pop

Guangxi

50 mil Pop

,



101/125

BohaiEconomicZone

Yangtze River Delta

Pearl River Delta

Malacca Strait

?

Tokyo Bay

Intermodal Transport Logistics Operations


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CHINAINDIA

Kunming

Nanning

Sittwe

Yangon

Mandalay

Bangkok

Vientiane

Hanoi

Ho Chi Minh

Phnom

Penh

Bhamo

Danang

Mawlamyine

Shenzhen

Landbridge for Global Maritime Shipping


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Economicbenefits

Logistics cost

impactsShippingroutingimplications

Infrastructuredevelopmentstrategies

Regionalcooperation

Multimodal

corridors

China Energy Security & Alternat ive Accessto Indian Ocean


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Time and costcompetitive

Economic andlogistics potentials

Relieving

congestion inStrait of Malacca

Intermodal

infrastructuredevelopment

Strait of Malacca -- Security, Capacity, Time


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Expected completion2014

48 pipeline of capacity

6 million barrels crude oilper day

Cut down tanker traffic in

Malacca Strait by 20%. Transport cost and time

implications

Intermodal Transport

China-ASEAN Port Cooperation


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Three ports in BeibuGulf for cooperation withASEAN:

Beihai Port FangchengPort

Qinzhou Port

Enhancingarchipelagic

ASEAN maritime

corridors

Trans-Asian Railway route map


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81,000 km, 28 countries

Missing links

Intergovernmental Agreement on the Trans-Asian Railway Network Adopted by the 62nd UNESCAP Commission (April 2006, Jakarta)

Signing ceremony during the Ministerial Conference on

Transport (6-11 November 2006, Busan)

Expected to enter into force in May 2009

Current Trends


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ECONOMICS Market integration Development of industrial/economic corridors

Internal Mobility/Connectivity Liberalised context Liberalisation of logistics services

SOCIAL Safety & Security Training/Skills development

ENVIRONMENTAL Pollution Carbon emission


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What does these developments in

Regional Arena mean for us???

What opportunities, including those interms of financial and technicalcooperation and assistance have been

opened or closed for us???


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We cant improve something w ithoutmeasuring!!!

Develop a rigorous economic geographymodel for predicting changes in the locat ionof population and industries across region

in the process of economic integrat ion.- IDE Geographical Simulation Model

determine the dynamic of location of population and industries in East Asia in thelong term.

analyze the impact of infrastructure

development projects on the regional economyat sub-national level.

Vietnam

Myanmar

Guangzhou

PXG

Hanoi China

Nanning


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VTE

Singapore

Kuala Lumpur

Phnom Phen

Malaysia

Bangkok

Ho Chi Minh

Laos

Danang

Cambodia

Hanoi

China

Thailand

ZVK

VTE

SURIGAO DEL NORTE

SURIGAO DEL NORTE

Sub-Regional RORO Prospect


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BUKIDNON

COTABATO

DAVAO

AGUSAN DEL SUR

MAGUINDANAODAVAO ORIENTAL

SULTAN KUDARAT

ZAMBOANGA DEL NORTE

SURIGAO DEL SUR

LANAO DEL SUR

DAVAO DEL SUR

SOUTH COTABATO

SARANGGANI

COMPOSTELA VALLEY

MISAMIS ORIENTAL

ZAMBOANGA DEL SUR

SULU

LANAO DEL NORTE

AGUSAN DEL NORTE

BASILAN

ZAMBOANGA SIBUGAY

DAVAO DEL SURSARANGGANI

MISAMIS OCCIDENTAL

ZAMBOANGA DEL SUR

SURIGAO DEL NORTE

TAWI-TAWI

DAVAO

CAMIGUIN

SURIGAO DEL NORTE

SULU

SULU

TAWI-TAWI

SULU

ZAMBOANGA SIBUGAY

SURIGAO DEL NORTE

TAWI-TAWI

TAWI-TAWI

TAWI-TAWI

TAWI-TAWI

TAWI-TAWI

TAWI-TAWI

BUKIDNON

COTABATO

DAVAO

AGUSAN DEL SUR

MAGUINDANAODAVAO ORIENTAL

SULTAN KUDARAT

ZAMBOANGA DEL NORTE

SURIGAO DEL SUR

LANAO DEL SUR

DAVAO DEL SUR

SOUTH COTABATO

SARANGGANI

COMPOSTELA VALLEY

MISAMIS ORIENTAL

ZAMBOANGA DEL SUR

SULU

LANAO DEL NORTE

AGUSAN DEL NORTE

BASILAN

ZAMBOANGA SIBUGAY

DAVAO DEL SURSARANGGANI

MISAMIS OCCIDENTAL

ZAMBOANGA DEL SUR

SURIGAO DEL NORTE

TAWI-TAWI

DAVAO

CAMIGUIN

SURIGAO DEL NORTE

SULU

SULU

TAWI-TAWI

SULU

ZAMBOANGA SIBUGAY

SURIGAO DEL NORTE

TAWI-TAWI

TAWI-TAWI

TAWI-TAWI

TAWI-TAWI

TAWI-TAWI

TAWI-TAWI

Mindanao connectivity under BIMP-EAGA

Sea Linkages

Air Linkages

Logistic Development Framework


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Liberalization of Logistics Services Maritime Transport Services Air Freight Services Rail Freight Transport Services Road Freight Transport Services

Enhancing Competitiveness of Logistic Services

Providers through Trade and Logistics Facilitation Trade and Customs Facilitation Logistics Facilitation

Expanding Capability of Logistics Service Providers Human Resource Development

Enhance Multi-Modal Transport Infrastructure andInvestment

Governance


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The Philippine Economic Boat andThe Global Recession


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The Philippines is notbadly affected because wesaw the global storm andour boat stayed in port.

Dr. Josef T.Yap, president, Philippine Institutefor Development Studies at conference on the global recession.February 17, 2009

The Philippines is not badlyaffected because our boat

did not leave the port.

Attributed to Dr. Felipe M. Medalla, UPeconomist & former NEDA DirectorGeneral

The Philippines is not badlyaffected because our boat

has not been built.

Manuel V. Pangalinan, chairman PLDT, MAP speech, February 11, 2009


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The World Is ChangingAre we on board?


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THE WAY FORWARD ??


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Transport Issues

Early Realizations


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119

Early Realizations The country did not have a truly integrated

strategy for the transport sector

Although we may have the best and technically-exceptional plans and projects, we areconstrained with the absence of capable

institutions who will implement the plans

Philippine Transport StrategyStudy (PTSS)


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120

Study (PTSS) Commissioned to develop the Transport Agenda

for the next 6 years (1999-2004) in line with the

Medium-Term Philippine Development Plan(MTPDP)

Issues identified by PTSS


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121

Issues identified by PTSS

Politics intrudes extensively in the sector toointrusively. The results is that just abouteverywhere is a development priority, and littleattention is paid to economic efficiency;

The institutions of Government are now ill-suitedto the task ahead change is needed;

There is inadequate funding to meet the sectors

needs; The private sector is, incorrectly, seen as the

(easy) answer to this funding problem;

Issues identified by PTSS (2)


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122

Issues identified by PTSS (2)

There is no transport policy and strategy that isowned by the agencies of government;

In many areas, there is inadequate understandingof the potential of transport strategy;

Attention focuses on projects, not institutions or

policies which are now more important; There are few prepared good projects that are

implementable surprisingly few;

Many projects are simply unrealistic, orunaffordable.

Key Characteristics of FutureAgenda


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123

Agenda

Much reduced government and a much increase role

for the private sector; Sustainability of policy in the medium and long-term;

Transport policy that is responsive to demands for

quality service, driven by increased incomes and therequirements of global competitiveness, improvedefficiency and innovation.

PTSS Recommendations


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124

PTSS Recommendations PTSS has underscored the urgent need to

improve existing Government processes in

relation to the transport sector PTSS recognizes that there is little need for

new infrastructure. There is a large road

network, an extensive railway, that is under-used, probably too many ports and manyairports. The primary need therefore is tomaintain, rehabilitate and upgrade theinfrastructure that exists.


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publicus js ncpag transport issues

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