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BY MANNY VILLAR
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Wednesday, November 8, 2017
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LACK of infrastructure is often cited as the primary cause of the traffic congestion in Metro Manila, but even a simple analysis shows that infrastructure should not be blamed entirely for the problem. I also think that it is too simplistic to say the problem can be solved just by constructing roads.
True, inadequate road infrastructure is a big issue behind the traffic congestion in the metropolis, but the inadequacy is brought about by other factors.
One is the economic boom — the Philippines is now among the fastest-growing economies in Asia — which means more Filipinos are able to buy cars.
Low inflation, low interest and easy access to credit enabled the domestic automotive industry to increase sales by more than 24 percent in 2016, with total sales of 359,572 units. For 2017, the industry is expected to sell as many as 500,000 units. The figures do not include motorcycles, the sales of which reached 1 million in 2016.
In 2016 a total of 11.2 million motor vehicles were registered with the Land Transportation Office (LTO), of which 2.5 million (28.7 percent) were in the National Capital Region (NCR) and 8.7 million (71.27 percent) were in other parts of the country.
The number of motor vehicles plying Metro Manila’s roads continues to increase, but the road network in the metropolis has hardly increased. According to some estimates, the NCR’s road network of 4,755 kilometers should be doubled to accommodate the vehicle population.
That means that the additional roads that are being built or widened are eaten up by existing demand, which continues to outpace infrastructure development.
Also, we are a flood-prone country because of the 20 or so typhoons that hit us every year. Metro Manila is particularly prone to flooding because of its low altitude. Everybody knows that even a light downpour floods many streets in the metropolis, resulting in stalled traffic. Add to this the narrowing of streets caused by illegal settlements or vendors.
Some government policies, or lack thereof, also contribute to the traffic problem. For example, it is only now that the government is raising taxes on cars, which will, hopefully, slow down car sales by some degree.
Under the proposed reforms, the vehicle excise tax would be doubled from 2 percent to 4 percent for vehicles worth P600,000 or below, or raised to P24,000 plus 40 percent of value in excess of P600,000 for vehicles worth P600,000 but not more than P1.1 million; and P224,000 plus 100 percent of value in excess of P1.1 million for vehicles worth over P1.1 million but not more than P2.1 million. The excise tax will also be at P1.224 million plus 200 percent of value in excess of P2.1 million for vehicles worth P2.1 million or higher.
Another problem is the development of vacant public lands, which the previous administration pursued as a revenue-generating measure. It seemed the government had declared a policy against making these vacant spaces into green public parks.
Selling vacant spaces to developers means transforming the vacant spaces into malls, office buildings and other commercial structures, which further aggravate the shortage in road infrastructure.
The government might have rejoiced in raising millions or even billions from the sale of the vacant spaces, but the amount could have exceeded the cost of road and other infrastructure that the government would have to build to serve the commercial projects. In other words, the government actually loses in the deal.
The Duterte administration is currently seeking approval of a tax- reform measure, which is designed to raise funds to finance a massive infrastructure program during its six-year term. I hope that the remaining vacant public lands will no longer be sold for commercial development, but for the development of open and green parks for the people.
Raising taxes on motor vehicles may be seen by some people as restrictive, but other countries with less traffic problems than the Philippines are actually imposing more restrictive measures.
Singapore, one of the most advanced countries in the world, and which probably has the most efficient and modern transportation system in Southeast Asia, announced last week that no more extra vehicles would be allowed beginning February 2018. The measure complements the government’s efforts to further improve the public transport system.
When the zero-growth policy takes effect, aspiring car buyers will have to wait for other drivers to surrender their certificates to apply for permission to buy cars.
The city-state is already one of the world’s most expensive places to own a car. At present, the Land Transport Authority (LTA) limits the annual increase in cars and motorcycles to 0.25 percent.
Under the current system, people who want to own a car in Singapore must buy a special certificate from the government, which are sold through auctions and can cost as much as $37,000.
The cost of the 10-year special certificate is in addition to various taxes and import duties, which can jack up the price of a small vehicle up to $74,000.
The new tax on cars proposed by the Duterte administration is far less severe than Singapore’s new policy, but it is a good step toward easing the traffic problem in Metro Manila.
Stopping the sale of vacant public lands for commercial development should also be part of the solution to the congestion, while the government implements road-infrastructure projects.
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This piece first came out in Business Mirror on Oct. 30, 2017 under the column “The Entrepreneur.” For comments/feedback e-mail to: mbv.secretariat@gmail.com or visitwww.mannyvillar.com.ph./PN
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