Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4134-PH PHILIPPINES URBAN TRANSPORT SECTOR REVIEW Volume II: Annex October 11, 1983 Urban and W4ater Supply Division Projects Department East Asia and Pacific Regional Office This document has a restricted distribution and may be used by recipients on their official duties. Its contents may not otherwise be disclosed without Y4 PHILIPPINES: URBAN TRANSPORT SECTOR REVIEW CURRENCY EQUIVALENTS Currency Unit = Peso (P) 'S$ 1 = P 11.0 Pesos 1 = US$0.0909 MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer = 0.62 mile (mi) ABBREVIATIONS AND ACRONYMS BLT - Bureau of Land Transportation BOT - Board of Transportation CHPG - Constabulary Highway Patrol Group CVUP - Central Visayas Urban Project LRT - Light Rail Transit (System) LRTA - Light Rail Transit Authoriry MCLUTS - Metro Cebu Land Use and Transportation Study MLG - Ministry of Local Government MMC - Metro Manila Commission MMTC - Metro Manila Transit Corporation MMUTIP - Metro Manila Urban Transportation Improvement Project MMUTS1RAP - 'letro Manila Urban Transportation Strategy Planning Project MOTC - Ministry of Transportation and Communications MPWH - Ministry of Public Works and Highways NEDA - National Economic and Development Authority NTPB - National Transportation Planning Board PC/INP - Philippine Constabulary/Integrated National Police RCDP - Regional Cities Development Project PNR - Philippine National Railways TEAM - Traffic Engineering and Management Unit (Manila) a FOR OFFICIAL USE ONLY PHILIPBINES URBAN TRANSPORT SECTOR REVIEW MAIN REPORT Table of Contents Page No. PRINCIPAL FINDINGS AND RECOMMENDATIONS . . . . . . . . . . . . . i - vi 1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . 1 A. The Importance of Urban Transport . . . . . . . . . . B. Urban Travel Characteristics and Trends . . . . . . . 3 C. Key Urban Transport Issues . .. . . . . . . . . . . . . 5 2. URBAN ROAD SYSTrEM. . . . . . . . . . . . . . . . . . . . . . 6 A. Road System Overview . . . . . . . . . . . . . . . . . 6 B. Urban Road System Deficiencies . . . . . . . . . . . . 7 C. Proposed Remedies . . . . . . . . . . . . . . . . . . 10 3. PUBLIC TRANSPORT . . . . . . . . . . . . 19 A. Description and Evaluation of the Existing System. . . 19 B. Bus-Jeepney Regulation and Route Rationalization in Metro Manila . . . . . . . . . . . . . . . . . . . 21 C. Rail Mass Transit. . . . . . . . . . . . . . . . . . . 14 D. Role of Public and Private Sectors . . ..28 E. Urban Public Transit Taxation and Fare Policies . . 29 F. Addressing the Traffic Congestion Problem. . . . . . . 30 4. SECTOR INSTITUTIONS. . . . . . . . . . . . . . . . . . . . . 33 A. Principal Institutions and Agencies. . . . . . . . . 33 B. Urban Transport Policy Formulation . . . . . . . . . . 38 C. Urban Transport Planning and Programming . . . . . . . 39 D. Infrastructure Design and Construction . . . . . . . . 41 E. Traffic Management . . ... . . . . . . . . . . . . . . 41 F. Traffic Enforcement. ... . . . ... . . . 43 G. Road Maintenance . . . . . . . . . . . . . . . . 45 R. Regulation of Public Transport . . . . . . . . . . . . 45 I. Staff Development and Training . . . . . . . . . . . . 49 This document has a restricted distribution and may be used by recipients only in the performance of their official dudes. Its contents may not otherwise bt disclosed without World Bank authorization. Page No. 5. EXTERNALITIES . . . . . . . . . . . . . . . . . . . 51 A. Energy ....... . . . . . . ... 51 B. Motor Vehicle Manufacturing . . . . . . . . 52 C. The Environment . . . . . . . . . . . . . . . . . 53 MAP IBRD 17234: Principal Cities of the Philippines PRINCIPAL FINDINGS ATrl REC OMYENDATIONS 1. This report presents the findings of an urban transport sector review which consisted of mission investigations /l and analyses of relevant documentation produced by the Philippine Government and its consultants /2 over the period Summer 1981 through Spring 1983. The purpose of this review was to analyze key urban transport issues facing Government as a basis for determining possible courses of action for improving upon current conditions and for addressing future problems posed by projected substantial increases in urban travel demand. More specifically, the review concentrated on the following key issues: (a) methods for addressing traffic related problems, especially traffic congestion; (b) methods for improving public transport services; (c) techniques for planning and financing needed infrastructure construction and maintenance; and (d) organization and development of key institutions in the sector. The principal. organizations reviewed were the Ministry of Transportation and Communicat.ons (MOTC), the Ministry of Public Works and Highways (MP14H), and the urban transport institutions in Metro Manila and Metro Cebu. This review is the first comprehensive study of the urban transport subsector conducted by the Bank in the Philippines. It was conducted in parallel with and provided inputs to a comprehensive review of the entire transport sector in the Philippines./3 2. Current Conditions and Trends. The urban transport problem in the Philippines is a real and growing one. Traffic related problems of conges- tion, high accident rates, poor pedestrialn conditions, poor pavement condi- tions, and adverse environmental impacts are already serious in Metro Manila and Metro Cebu and are spreading to other cities. The following summary of traffic conditions on major travel corridors in Metro Manila is indicative of the problems which other principal Philippine cities may face in coming years. Travel speeds along nearly one-fourth of the primary road network are less than 15 kph; many streets in the city center and on approach routes experience speeds of 10 kph or below - only twice the speed of walking. /I The Following individuals contributed to the sector review through mission activities: Messrs. Richard Podolske (Urban Planner), David Jarvis (Economist), Jack Kay (Traffic Engineering Consultant), and Ronald Kirby (Public Transport Consultant). Nonna Ponferrada and Shirin Velji also assisted in the preparation of this report. /2 Among the more important recent reports are Transportation Strategy for Metro Manila, Draft, D.J.W. Roberts, April 1982; Metro Manila Capital Investment Folio Study, Final Report, Metropolitan Manila Commission and Halcrow Fox and Associates, November 1982; Investment Planning Aspects of Metro Manila Transport, Working Paper, DCCD Engineering Corporation and Pak-Poy & Kneebone Pty. Ltd., January 1983; and Metro Manila Urban Transport Strategy Planning Project - Part A, Final Report, DCCD Corpo- ration and Pak-Poy Kneebone Pty., Ltd., Arpil 1q83. /3 See "The Transport Sector in the Philippines," Report No. 3916-PTT, September l%83. - ii - These conditions are caused largely by inadequate traffic enforcement, an incomplete secondary arterial road network, and application of traffic management measures on only a small part of the total road network. Sidewalks are either non-existent or in poor condition along 42% of Manila's primary arterial street system, and sidewalks along only 5% of the system are rated good or better illustrating the poor pedestrian environment. Nationally, motor vehicle accident rates are high averaging at least double comparable accident indicators in developed nations. In Metro Manila, nearly half of those seriously injured in motor vehicle accidents and about three-fourths of those killed are pedestrians. 3. If current population, vehicle ownership, and travel trends continue over the next 20 years, the strain on the existing urban transport infrastructure and on the financial and professional/managerial resources of Government to cope with the problem will be substantial. Urban population would increase, over 60%, vehicle ownership would triple, and motorized person-trips would double. With expanding city size, average trip lengths would increase, possibly resulting in a tripling of person-kilometers of travel. Aggravating the problem is the trend of individuals to use more convenient and comfortable but, unfortunately, less space efficient low occupancy vehicles, placing even more strain on the infrastructure for a given level of person-km of travel. While these growth trends could prove to be too high, even if motorized travel attained only half of these levels, the strain on existing infrastructure and Government resources would be unprecedented. 4. However, the overall urban transport picture is not all bleak. The public transit user - accounting for over three-fourths of all motorized trips - receives a service which for convenience and comfort compares favorably with almost any other nation in the developing world and with many in the developed world. Jeepney and bus service is frequent (waiting times of 3-5 minutes or less are common), routes cover most areas of cities and, with the exception of selected congested corridors in Metro Manila and Metro Cebu, travel speeds are acceptable. Public transport is reasonably affordable and, since it has been essentially privately supplied, the need for utilizing scarce Government resources for this purpose has been minimized. 5. Government has begun to take steps to organize and staff special- ized organizations to address the rapidly emerging urban transport problem. MPWH has developed an urban roads projects office; MOTC is in the process of organizing to address urban transportation planning needs. Traffic manage- ment units have been established and are in operation in Metro Manila and Metro Cebu. The Traffic Engineering and Management (TEAM) unit in Metro Manila has successfully implemented a series of traffic management measures that have proven their utility by increasing speeds and reducing accidents while at the same time increasing traffic flows. Since its inception in 1980, MPWH has placed greater emphasis on urban road maintenance, and these efforts, especially in Metro Manila, are showing substantial results. - iii - 6. A Strategy for Addressing the Problem. Given the serious array of transport problems needing attention in the principal Philippine cities which will be compounded by projected irLcreases in transport demand, a governmental response emphasizing the provision of capital intensive urban transport infrastructure to meet this demand cannot be realistically con- sidered. Such a strategy could divert clready scarce Government resources from other important sectors. The following strategy is accordingly recommended to Government as a means of coping with the emerging urban transport challenge within its available resource base: (a) Increase the traffic carrying capacity of the existing road system through improved traffic management and enforcement. First priority should be directed at getting the most output from existing infrastructure. Low-cost traffic management schemes where applied have proven successful in Manila. However, the only professionally trained urban traffic manage- ment units in the nation are in Metro Manila and Metro Cebu, and these units are understaffed and not attached to local units of Government. Urban traffic enforcement is currently marginally effective at best; the need to strengthen and rationalize this activity is substantial. Among all urban transport strategy elements, :Lnvestments directed at improving traffic management and enforcement are likely to have the highest short-term benefits al: the least cost. (b) Shape travel demand through public policies that favor efficient users of road space and discourage inefficent users. It should be recognized that by far the most inefficent user of transport infrastructure is the automobile which typically consumes 5 to 10 times more road space per passenger than alternative public transport modes of travel. Travel demand management policies should be advanced in the foLlowing three categories recognizing the substantial public cost oE accomodating the low occupancy vehicle (LOV): (i) increases in taxes/fees at the time of vehicle purchase; (ii) increases in annual taxes/fees on vehicle ownership, and (iii) restrictions and charges to discourage LOV use (and give priority to public transit) in specific areas at specific times. The third category listed above should include more rigorous parking restrictions and enforcement, special public transit lanes and streets, and (to the extent politically feasible in Metro Manila) charges for LOV travel in specific city districts or along street segments that are heavily congested. The first two categories of policies will conflict with the Government - iv - objective of spurring the local motor vehicle assembly industry and this may be very difficult to implement. Similarly, the third category, which contains the most precise remedies, is also likely to be resisted by influential car owners. Never- theless, in the long run these policies, if implemented, are likely to have the most beneficial impact on the urban trans- port sector among all possible Government initiatives. (c) Selectively increase investments in urban road construction and maintenance. While the exact level of investments cannot be readily determined, there is no question that continuing motorized travel growth will require increased expenditures on the urban road network, even with improved traffic management and enforcement and implementation of travel demand policies. These expenditures will need to be directed toward improving road maintenance, upgrading selected roads, and constructing new roads in rapidly urbanizing areas. While in the short term, the dominant level of funding will necessarily come from the central Government, the larger city and municipal govern- ments should be encouraged to assume a greater proportion of the total funding responsibility. Although funding levels for urban transport infrastructure should increase, it will be necessary to guard against untimely or uneconomic investments such as premature or overdesigned urban roads. Underpinning these efforts should be stronger national programming to assure balancing of urban transport funding among urban areas, and regularly updated comprehensive transport plans and rolling five-year capital investment plans in all principal cities. (d) Keep Government investments to a minimum in the provision of public transport services. Given that urban transport demand could easily justify investments on economic grounds well beyond the likely fiscal resources of public agencies, Government should concentrate investments in urban transport where the private sector cannot reasonably be expected to contribute--principally the road system--and refrain from making investments in public transport. The essentially privately owned public transit system provides a generally good level-of-service. Urban residents are offered good spatial coverage, high frequencies, and generally affordable service all at virtually no public cost. Given this situation, Government should resist the temptation to directly invest in public transport. Instead, improved use of regulatory and enforcement functions would be more appropriate to create an improved climate for private transport operations with fewer traffic induced side effects, especially traffic congestion and accident rates. For the foreseeable future Government should not expand investments in the light rail transit system, should not expand Metro Manila Transit Commission operations, and should keep investments in the heavily subsidized Philippine National Railways (PNR) commuter - v service to a minimum with a possible view to discontinuing the commuter services on the north and east lines out of Manila. No Government investments in in:ra-urban public transport systems should be considered outside Metro Manila for the foreseeable future. At the present time Government policy appears generally consistent with these guidelines. MMTC operations are not being substantially expanded and private bus operators are being encouraged to increase service. Further investments in the LRT system are being deferred pending a careful analysis of the actual ridership and financial performance of the initial LRT system. (e) Reform the public transport regulatory process through concen- tration on fewer objectives and phased decentralization to local units of Government. The current regulatory process is so all encompassing and burdensome that the net effect is a near total collapse of the regulatory system. Steps should be taken to concentrate on those primary objectives which are in the public interest. A priority area should be the improvement of public safety through strict driver licensing (with first priority placed on public transit drivers) and vehicle inspections. Conversely, the current restrictive controls on market entry, route assignments, and fares need to be relaxed to legally allow a more responsive system. Decentralization of the regulatory process to BOT regional offices and to local units of government would further enhance regulatory responsiveness to local needs. Recent proposals to eliminate truck entry and pricing regulations, and decentralization of tricycle regulation to local units of Government are steps in the right direction. (f) Proposed regulatory policies in Metro Manila favoring bus opera- tions and constraining jeepney operations should be initiated with considerable caution. The multi-ownership jeepney operation has been critized as being chaotic, congestion inducing, and very difficult if not impossible to regulate. Various schemes have been proposed over the past decade to bar or sharply constrain the jeepney operations in favor of a bus transport system with fewer owners. There are a number of reasons why this approach should be attempted with caution and may need to be only selectively applied. First, the jeepney dominated public transport service has worked remarkably well, offering good accessibility to most parts of urban areas at reasonable speeds and at acceptable prices. Second, the public in recent years has chosen the jeepney over busing, apparently considering the service for the price superior. Accordingly, the principal Government strategy regarding jeepneys should be directed at improving those aspects of jeepney operations found to be undesirable rather than significantly reducing their overall operations. Priority attention should be focused on enforcing - vi - existing traffic regulations especially congestion-inducing illegal stopping, providing adequate stopping areas and terminals, giving priority to all public transport vehicles on congested streets, and encouraging development of a stronger jeepney collective organization with a view to stronger internal regulation among jeepney operators. Along portions of some major arterials jeepney operations contribute significantly to traffic congestion, and selective rerouting or setting ceilings on operations would improve conditions. However, setting rigorous city-wide ceilings on jeepney registrations or complete Government planning and regulation of all routes is not recommended. Given both the technical and political problems associated with restriction of jeepney operation on congested streets, a careful step-wise approach is recommended in which the impacts of Government policies can be tested and modified as necessary. (g) Clarify jurisdictional responsibilities. There is a substantial amount of jurisdictional overlap and corresponding uncertainty of responsibility in almost all critical urban transport functions. At the national level, national policy development, assistance to local units of Government for-transport planning and traffic management, and traffic enforcement need particular attention. At the local level, road construction and maintenance responsibilities among MPWH, the cities, and the barangays need to be clarified. Given the current staff weaknesses of the principal agencies operating in the sector, resolution of these jurisdictional problems is particularly critical. (h) Strengthen the principal urban transport institutions. The MOTC, MPWH, and enforcement agencies all need to be substan- tially strengthened to address emerging urban transport prob- lems. This will have to be accomplished by improved staff reten- tion policies and continuing strong training programs. Recognizing the current national shortage of qualified personnel with appropriate training and experience, development of solid core groups in appropriate parent ministries to assist and develop staffs of local units of Government is particularly important. This outreach capability should emphasize planning (MOTC), traffic management (MPWH), and urban road design and maintenance (MPWH). Government should also take steps to coor- dinate these three functional specialties, especially when major urban transportation investments are being planned for urban areas. The recent creation of the Urban Transportation Project Management Office (UTMPO) in MOTC appears to be an appropriate step in furthering outreach coordination. Given that Govern- ment may not be able to retain seasoned engineers, a strategy encouraging the development of a local consultancy industry which could be tapped by Government also should be pursued. 1. INTRODUC"ION A. The Importance of Urban Transport 1.01 The means by which the steadily .increasing demand for urban transport services will be accommodated is rapidly emerging as an important concern in principal cities of the develop:ing world. If demand is fully accommodated by construction of high cost road and rail systems - as has been typical in many developed nations - the cost in relation to other sectoral demands on national resources may be prohibitive. Conversely, if the challenge is not met, increasing traff:Lc related problems could result in substantially reducing the efficiency of urban areas as they assume ever increasing roles in national economies. In general, the importance of urban transport as a sector increases as (a) a nation becomes increasingly urbanr- ized; (b) city size increases; and (c) family incomes rise. All of these factors are contributing to making urban transport an important sectoral concern within the Philippines./l 1.02 Urban Population. The Philippines urban population in 1980 was estimated at about 16.4 million people, approximately 34% of the total national population of 47.9 million (Table 1.1). Metropolitan Manila domi- nates the Philippines urban scene with approximately 5.9 million persons, or 36% of the total urban population and 12% of the national population. The only other major urban center is Metro Ceblu with a population approaching one million persons. There are five additional cities with populations ranging from 200,000 to 600,000 (Table 1.2) and a further 20 urban centers with over 100,000 persons (Table 1.3)./2 1.03 Between 1960 and 1980 the urban population more than doubled, increasing at an average annual rate of above 3.6% as compared to 2.9% for the total national population. Within the next 20 years the population of the Philippines will grow to approximately 80 million people, nearly a 70% increase. At least half of this added population may have to be absorbed in urban areas even under optimistic projections of rural employment. 1.04 City Size. As a city grows, trip-lengths generally increase and its central area attracts more office and commercial development resulting in greater demands on available transport Lnfrastructure and public trans- port services. Often inhabitants of larger cities have higher incomes, /1 For a global perspective of the urban transport situation, see "Urban Transport Sector Policy Paper", World Bank, May 1975. /2 Many of these cities include extensive rural areas which are not truly urban; all population figures are preliminary 1980 census findings. All urbanized areas with over 50,000 population are cities with the exception of municipalities that are contiguous to the metropolitan areas of Manila and Cebu (Table 1.3). further increasing travel demand. These phenomena are already realized in the Philippines and result in an urban typology of transport problems as follows: (a) Metro Manila - Metropolitan Manila, consisting of the City of Manila, 3 additional cities and 13 municipalities, stands out as a major metropolitan area ranking among the 25 largest in the world. This urban agglomeration is experiencing most of the serious transportation problems -- severe traffic congestion on most principal streets, long travel times, and air and noise pollution -- to be expected of a city of this size. (b) Metro Cebu -- The only other Metropolitan area in the nation is the Metro Cebu agglomeration of three cities and seven municipalities. This emerging metropolitan area is experiencing significant congestion on some of its major arteries and in the central business district. Travel times, especially for commuters, are becoming lengthy. (c) Principal Cities -- The cities of Bacolod, Cagayan de Oro, Davao, Iloilo, and Zamboanga could all be classified as principal cities having populations in 1980 in excess of 200,000 persons and exhibiting a highly urbanized character. These cities are beginning to experience traffic congestion in their central business districts. (d) Other Selected Centers -- There are about 40 additional cities over 50,000 population that have reached a size where urban traffic problems, including localized congestion, are beginning to emerge. These smaller cities are also at a threshold where public transport begins to he important since trip lengths for many trip purposes become too long for pedestrian travel. 1.05 In summary, the principal Philippine urban transport problems are currently concentrated in Metro Manila and Metro Cebu. As the urban population increases the severity of the problem is likely to increase in these cities, and gradually spread to smaller cities. The analysis and findings of this report are, accordingly, concentrated on conditions in Manila and Cebu. 1.06 Urban Income. Family income profiles are particularly important at the upper and lower ends of the income spectrum as they determine the accessibility of persons to private and public transport respectively. The potential for increases in private car ownership is important since ownership of these vehicles is highly related to the likelihood of traffic congestion and the consequent need to make considerable investments in urban roadways. At the other end of the spectrum, the ability of lower income people to pay for urban public transport is equally significant for, if these persons cannot afford this service, they will he dependent on walking which will sharply constrain their place of residence. Based on available income and expenditure data, urban Filipinos can be divided into three broad - 3 - groups: (a) car dependent families accounting for less than 10% of the population; (b) public transit oriented families accounting for about 60% of the population; and (c) walking dependent families accounting for about 30% of the population. However, among the walking dependent families it is estimated that most could afford to send one or more family members to work daily by public transport if all other travel (school, shopping, business, social-recreational) was by walking (See Annex A). B. Urban Travel Characteristics and Trends 1.07 Vehicle Ownership. A useful (and the most readily available) indicator of the level of transport demand within the Philippines is the number and types of vehicles in use. In comparison with other countries of South East Asia, the Philippines has a relatively low level of per capita vehicle ownership. In 1980, there were only about 20 motor vehicles per 1,000 persons in the Philippines as compared to about 160 in Malaysia, 39 in Thailand, and 23 in Indonesia (Table 1.4). The Philippine 1980 motor vehicle fleet consisted of about 1.1 million vehicles of which approximately 40% were cars, 21% motorcycles and tricycles, 27% trucks and vans, and 12% public transport vehicles (principally jeepneys and mini-buses) (Table 1.4). 1.08 In common with many developing countries, there has been a signi- ficant increase in the Philippine vehicle fleet over the past 15 years. Overall annual growth during the period 1965-1980 has been about 9%, or about triple the rate of growth of the national population (Table 1.5). However, in each of the last 5-year segments, there has been a decline in the rate of vehicle growth. Most significantly the annual growth of private cars has fallen from 14% per annum in the five year period 1965-70, to 8% in 1970-75, and to only 3.3% in 1975-80; the growth in the absolute number of cars registered in the last five-year period was half that of the five previous years./l 1.09 The reasons for the decline in vehicle growth generally, and of cars in particular, are not entirely clear, but several factors probably contributed. Among them are sharp increases in fuel prices, increases in Government taxation on fuel and auto sales, high interest rates and the progressive car manufacturing program which has required higher domestic inputs and thus increased costs. (See also paras. 5.07-5.10 for a further discussion of this matter). Motorists not able to purchase automobiles are apparently turning to motorcycles, a less expensive form of private vehicle ownership. Motorcycles are increasing a.t an annual rate nearly double that /1 Based on preliminary figures, there was an actual drop in vehicle registration between 1980 and 1981. This is consistent with industry figures which show a substantial drop in motor vehicle sales during the period. However, the drop may be due to a different method of record keeping instituted by the Bureau of Land Transportation. -4- of cars, and in 1980 accounted for 21% of the motor vehicle fleet as opposed to only 10% in 1965. A positive trend is the substantial growth in regis- tration of both jeepneys and freight vehicles indicating a strong national demand for both public transport and goods movement. 1.10. Spatial Variance in Motor Vehicle Ownership. Consistent with conditions in many developing nations, the National Capital Region dominates the spatial distribution of the motor vehicle fleet. With only 12.4% of the national population, Metro Manila has over 40% of the motorized vehicles in the country and over 57% of all automobiles (Table 1.6). Car ownership (45 per 1,000 persons) is nearly five times the national average, and overall vehicles per capita (75 per 1,000) is over three times the national level (Table 1.7). Despite this dominance, car ownership levels in Manila are low in relation to other principal Asian countries, such as Bangkok which has a similar level of income. Outside Manila, principal urban areas have between two to five times as many vehicles as their corresponding regions. This evidence suggests that at least 80% of all vehicles in the Philippines are based in urban areas. 1.11 Mode of Travel. Public transport, especially the jeepney, is the dominant form of urban travel in the principal cities. The jeepney alone accounts for about 60-80% of all motorized person-trips in the larger urban centers (Annex B, Table 4). In smaller cities the motorized tricycle provides a similar role in conjunction with the jeepney. In no city does car travel account for more than 20% of all motorized travel. Walking is a significant mode of transportation in the principal cities making up between 25-30% of all trips. Bicycle usage is insignificant in most cities. 1.12 There is a considerable variation in modal composition of traffic between specific streets in the cities (Annex B, Tables 8-12). Some streets carry very high levels of private car travel; others are almost exclusively used by public transport riders. This phenomenon is significant when traffic management measures are being considered and has implications for public regulation of transit routes. 1.13 Goods Movement. The movement of goods vehicles in urban areas is important because of their impact upon pavements and traffic flow - they contribute greatly to the wear of roads, and generally slow up traffic. Goods vehicles comprise over 20% of the vehicle fleet in Metro Manila and 30% in Metro Cebu. However, they are less significant in terms of vehicle flow, representing only 17% of motorized trips in Cebu and 2-6% of flow on major corridors in Manila./l 1.14 Future Trends in Urban Travel. The future level of urban travel demand in the Philippines is closely related to the population and economic /1 This may be due in part to the banning of goods vehicles on selected principal arterials of Metro Manila between 6-9 a.m. and 4-8 p.m. - 5 - growth of the country, and to the related trends in family incomes./l Assuming no major unanticipated changes in the current trends, the following general predictions can be made for the next 20 years: (a) urban population will increase at least 60% and, combined with increased real incomes, vehicle ownership will at least double and more likely triple (see Annex B, Table 13); (b) motorized trips would more than double and, with expanding city sizes, trip lengths would increase resulting in at least a trip- ling of person-kilometers of travel; tc) without restraints on the use of the private automobile a higher percentage of the additional person-km of travel would be accommodated by this less efficient user of road space, thus requiring more vehicle-km of travel and further straining the road infrastructure;/2 and (d) while motor vehicle travel will increase substantially, pedes- trian travel will remain a significant form of urban transportation due to a large remaining low-income population and an urban land-use pattern in which places of residence, work, and school are in close proximity to each other. While these growth predictions could prove to be too high, even if the growth attained was only half of these levels, major improvements to exist- ing infrastructure and substantially increased government resources will be required to cope with the emerging urban transport problem. C. Key Urban Transport Issues 1.15 While addressing a number of concerns, this report concentrates on the following key issues: (a) how to address traffic related problems of increasing congestion, high accident rates, and poor pedestrian conditions; /1 For a discussion of possible alternative futures on Metro Manila's Development see Chapter 3, "Development Scenario", Metro Manila Urban Transportation Planning Project, Final Report, DCCD Engineering Corpo- ration and Pak-Poy Kneebone Pty, Ltd for MOTC, April 1983. /2 Illustrative of the trend from high occupancy to low occupancy vehicles, the share of motorized person-trips accommodated by the automobile increased from 20% to 26% in Metro Manila between 1976 and 1980 repre- senting a shift away from public transport. Bus usage in Metro Manila declined 41% between 1976 and 1980 in favor of the lower occupancy jeepney. -6- (b) how to plan for and finance urban transport infrastructure to accommodate increasing travel demand; (c) how to improve urban public transport services including appro- priate roles for various vehicle types, the type and amount of public investments, and public transport regulation; and (d) determination of appropriate organizational structures and development of key institutions to address the emerging urban transport problem. 1.16 These issues are addressed throughout the report. Chapter 2 - Urban Road System - addresses principally the first two issues; Chapter 3 - Public Transport - addresses the third issue; and Chapter 4 - Sector Institutions - addresses the fourth issue. Chapter 5 - Externalities - addresses issues that are related and important but transcend the urban transport sector focus. 2. URBAN ROAD SYSTEM A. Road System Overview 2.01 The urban road system accommodates virtually all intra-urban travel in the Philippines. An insignificant amount of urban travel is provided by the Philippine National Railways (PNR) within Metro Manila; there is no other intra-urban rail travel within the Philippines. A 16 km first-stage elevated light rail system is under construction in Metro Manila operating on a north-south alignment; this system is not scheduled to be completed until 1984-85./I There is no significant intra-urban water-borne transport system in any Philippine city. 2.02 The Philippines had 152,000 km of roads at the end of 1980, of which approximately 20,000 km (13%) are classified as urban. Approximately 25% of the urban system (5,000 km) is paved (Table 2.1). Nearly half of the paved urban road system is concentrated in Metro Manila. 2.03 Roads are classified by the Ministry of Public Highways in three categories: (a) national; (b) local: (provincial, municipal and city); and (c) barangay. While not always the case, the most important roads in urban areas in terms of volume carried are usually national roads. National roads form about 40% of paved urban road length; since urban traffic typically concentrates on one-third or less of total street kilometerage, the domin- ance of the national road system becomes apparent. While barangay roads constitute about two-thirds of urban road kilometerage, most are unpaved, are located on the rural fringes of urban areas, and are not significant in terms of traffic volume. Provincial and municipal roads, while significant /l Patronage on this system will not exceed 4% of motorized person-trips in Metro Manila. from a national perspective, generally do not serve the principal urban areas of the nation./l B. Urban Road System Deficiencies 2.04 Traffic Congestion. Traffic congestion has become a serious proh- lem in Metro Manila and Metro Cebu and is beginning to be a concern in the central business districts of larger secondary cities. This problem is due to sharply increased use of road space by a growing number of motor vehicles which has not been matched by a corresponding increase in road construction and improved management of traffic on existing road space. Further accent- uating the problem is a lack of well planned and developed secondary arterial and distributor road systems to support the reasonably good primary arterial systems in most cities (see also paras. 2.10-2.13). There are several missing links in the road systems and connecting streets constructed with widely differing traffic carrying capacities. These deficiencies result in a high percentage of all travel being concentrated on a very few streets. 2.05 Travel speeds on the principal arterials are slow over a large portion of the day in both Manila and CebtL. Illustrative of the general trend in deteriorating travel conditions, essentially one in four primary road links in Manila already have speeds of approximately 15 kph or less during most of the day. Travel speeds are 10 kph or lower over extensive portions of the business district, in market areas, and along principal radial roads./2 A recent survey has indicated 46% of primary street network links are operating with traffic volumes exceeding their rated capacity./3 The overall primary road system is operating at 96% of capacity, indicating that most of the principal network is approaching saturation under current operating conditions./4 Even small increases in travel without corresponding /t Exceptions are Metro Manila and Metro Cebu where highly urbanized municipalities located outside of the central cities do provide substan- tial paved road networks (Table 2.2). /2 See Annex B, Table 7 for a summary of travel speeds by bus and jeepney for major zones of Metro Manila. /3 Metro Manila Urban Transportation Improvement Project (MMUTIP), June 1981. /4 A further indicator of the level of congestion may be drawn from a review of the peak hour traffic percentage on principal streets in Manila. (The peak hour percentage equals the i:raffic volume in the peak hour divided by the daily traffic volume total). If traffic were the same during all 24 hours of the day, the percentage would be 4.17. According to data extracted from MMUTIP Data Base Report: D-3, Road Traffic Data, approximately one-half of the evening peak hour percentages on arterial road links in Manila were below 6.0%. This indicates that traffic is heavy as many as 14 or 15 hours per day. The peak hour percentage on relatively uncongested networks is usually about 8-10%. - 8 - increases in capacity will cause much more of the Manila road system to be moderately to severely congested./l While congestion conditions in Manila are presently serious, it is important to note that congestion has become steadily worse over the last ten years. Between 1971 and 1981 the share of arterial road links with public transport speeds less than 15 kph has risen from 15% to 23%; the share of links with speeds under 30 kph has risen from 70% to 81% (Annex B, Table 6). However, efforts by TEAM in traffic manage- ment (see para. 2.17) and MPWH in road maintenance and selected road widening (see para. 2.09) are beginning to show positive results. Travel speeds have improved on selected major streets even with the accommodation of increased traffic volumes. 2.06 High Accident Rate. By analysis of limited accident data it is clear that there is a serious traffic safety problem in Philippine urban areas. Even discounting possible large discrepancies in reporting proce- dures, urban areas suffer from very high accident rates. Recent World Health Organization data show that the Philippines has about double the traffic accident casualties on a per capita basis most developed nations experience (Table 2.3). A further survey by the Manila Traffic Engineering and Management (TEAM) unit indicates the comparatively high death rates in the Philippines in comparison to motor vehicle registrations (Table 2.4). It appears that the traffic safety problem is not limited to Manila and Cebu but is a problem in all Philippine cities. A very important step in mini- mizing this problem would be to improve collection and analysis of data to better understand the causes and frequencies of various types of urban accidents./2 2.07 Poor Pedestrian Conditions. The pedestrian fares poorly in many parts of the larger Philippine urban areas. Along principal arterial streets, where pedestrian protection needs to be the greatest, not enough attention has been directed toward constructing and maintaining continuous pedestrian travel networks. The result is that in many locations pedes- trians are forced to mix on streets with moving vehicular traffic to the detriment of the pedestrian and motorist alike. At intersections, crossings are generally not well marked and motorists seldom yield to pedestrians unless congestion or loading causes the vehicle to stop. Given the low density of traffic signals, an insufficient number of "safe" pedestrian crossing locations exist. All of these factors have resulted in pedestrian accident rates which are far above that experienced in many countries. /1 The sensitivity of the road system capacity to actual traffic volumes is illustrated by the substantial drop in travel speeds on congested streets when only slightly higher traffic volumes are experienced. This unreliability of travel speeds forces many travellers to plan their activities utilizing only the lower speeds. /2 A highway safety study, being considered under a proposed Bank supported highway project, could assist in this matter. - 9 - These adverse conditions are serious since walking trips make up a major part of travel demand in the Philippines -- from at least 30% of all person-trips in Manila to higher percentages in the smaller urban areas. 2.08 Pedestrian conditions in Manila are particularly unpleasant and hazardous. Sidewalks, where they exist, are often narrow and poorly main- tained. Sidewalk conditions along primary arteries in Manila were recently rated "good" on only 5% of the links; nearly half (42%) of the primary links either have no sidewalk or are in poor condition (Table 2.6). Analysis by the TEAM Unit in Manila has shown that a disproportionate share of traffic victims are pedestrians. Approximately 45% of those seriously injured and 75% of all those killed by traffic accidents in the city are pedestrians./l 2.09 Poor Pavement Conditions. UJp until the creation of MPWR in 1982 with a mandate to improve infrastructure maintenance, insufficient resources were directed at urban road maintenance. Illustrative of the problem was a January 1981 MMUTIP study finding that approximately 87% of Metro Manila's main streets were in "fair" or worse condition and that 24% were in "poor" or worse condition (Table 2.7). By June 1983 a MMUTIP study update found that only 46% of the Metro's main streets were in "fair" or worse condition and only 10% were in "poor" or worse condition, reflecting a sharp improve- ment in less than 1-1/2 years. While most of this improvement can be attributed to the Ministry's 5-year road upgrading program started in 1982, much remains to be accomplished. Road pavement conditions vary considerably within and among Philippine cities. Secondary streets in many cities are in a particularly poor state of repair. Continued emphasis on road maintenance is needed to reduce vehicle operating costs, to improve road safety, and to protect considerable existing capital investments in urban roads. 2.10 Unbalanced Road Development. There is a problem with the planning and programming of road development both within and among Philippine cities. Many cities have a good primary arterial road network, but a very limited or poorly developed secondary network with conseauent overtaxing of the entire network. Furthermore, the quality of the urban road system is highly variable among Philippine cities, even among those in the same size class exhibiting similar traffic problems. This suggests that there is a strong need to improve both the planning and budgeting for these systems to meet relative system needs. The unbalanced level of road development among principal Philippine cities is shown by a few indicators presented below. 2.11 Percent of Roads Paved - The percentage of paved roads in selected larger cities varies widely, as exemplified by a high of 85% in Metro Manila and a low of only 1570 in Davao (Table 2.8). However, these figures can be somewhat misleading in as much as extensive portions of some cities are rural in nature. /1 Stanley A. Mack, paper presented to 11th National Road Safety Convention, Manila, May 26-27, 1981. - 10 - 2.12 Paved Roads Per Capita -- This is a relatively good index assuming that each city should over time inherit an improved system roughly proportional to population. Among the cities investigated there was a reasonable correlation but ranges in kilometerage of over 2 to 1 were found (0.69 km/l,OO0 persons in Bacolod to 0.33 km/1,000 persons in Davao). 2.13 Paved Roads per 1,000 Motor Vehicles -- This is perhaps the best single available indicator (short of actual traffic counts on specific street segments) that relates the supply of developed road space to the demand placed on it by motorists. There is considerable variability among cities of the same population class, for example 15.4 km/1,000 vehicles in Bacolod vs only 6.9 km in Cagayan de Oro. In general, it can be expected that cities with the lower ratios are experiencing more traffic problems. C. Proposed Remedies 2.14 There are a number of measures that can be utilized to address the current deficiencies in urban road systems. Among them are (a) improved traffic management and enforcement; (b) improved transportation planning and investment planning; (c) clarification of jurisdictional responsibilities; (d) continued improvement in road maintenance; and (e) increased funding for road construction. These proposed remedies are discussed sequentially below. Improve Traffic Management and Enforcement 2.15 The traffic congestion, high accident rates, and poor pedestrian and environmental problems described above are all symptomatic of the indequate level of traffic management measures implemented in principal Philippine cities. While some streets are well designed from a traffic management perspective, inadequate intersection design, lack of intersection control, inadequate street signing and marking, and poor lighting conditions are the rule rather than the exception. Moreover, deficiencies in traffic management are aggravated by the general lack of discipline on the part of both motorists and pedestrians. This behaviour stems in part from the low level of enforcement of existing regulations. With the exception of TEAM in Manila and MCLUTS in Cebu, no Philippine urban area has a staff of trained traffic engineers who concentrate on traffic management problems. (See paras. 4.25-4.27 for discussion of recommended institutional strengthening measures). 2.16 Traffic Signalization. Since traffic signals control conflicting traffic flows at intersections, which are the weak link in most urban road systems, the number and condition of these installations is an especially good indicator of the adequacy of traffic management in principal urban areas. Traffic signals are generally installed only at the most critical junctions in major Philippine cities and where installed are often in poor repair, sporadically used, or completely out of order. (See Table 2.9 for a tabulation of traffic signal installations in principal Philippine cities.) - 11 - Many additional high volume intersections do not even have fixed signs to assign the right-of-way. This results in traffic delays as well as hazardous driving and walking conditions. Traffic signals are often poorly timed with extremely long cycle lengths (which reduces traffic flows) and are often manually operated by the police during rush hours indicating a lack of confidence in automatic operation. 2.17 Indicative of the potential of traffic signalization has been the relative success of the "TEAM." Project in Metro Manila which began in 1977./l The centerpiece of this operation is a centrally controlled traffic signal system with associated minor civil works and road marking. Tentative results are impressive; although the traffic signal system is not yet fully installed, traffic speeds have been increased by as much as 25% and acci- dents have been reduced by 30% along the affected streets while traffic volumes have increased by 10%./2 The traffic signal control and inter- section improvement project has moved into a second stage to cover an additional 140 intersections. 2.18 Parking. Curbside parking is prohibited throughout the day on all main routes in Manila and this rule is well enforced with very positive traffic flow benefits. However, there is generally no regulation of parked vehicles on secondary roads causing serious congestion in the central area, especially when combined with the loading of public transport vehicles. Intersection capacities are often adversely affected by parking of vehicles right up to the junction. While not yet a major problem, the availability of parking spaces in central Cebu and Manila will have to be addressed or *there is likely to be an increased incidence of illegal parking on already congested arterial streets. 2.19 Travel Demand Management. While rudimentary traffic management has been successful in Manila, more sophisticated demand management approaches aimed at assigning priority tc more efficient users of road space and deterrents to less efficient users has not been systematically tried or successfully implemented. For example, special traffic lanes for public transit vehicles were introduced in 1979 but are not as effective as origi- nally anticipated principally due to a lack of legal underpinning and enforcement. Proposals for pricing or otherwise restraining cars from entering the congested inner portions of the city have been considered in Metro Manila but there is a general consensus among Government officials that current practical and organizational problems must be solved before such a /1 TEAM was partially financed by the First Urban Project in the Philippines (Loan 1272/1282-PH). /2 Before and after study on effects of new signal installations at Espana and Taft Avenues, Traffic Control Center, Ministry of Public Highways, July 1981. - 12 - system could be implemented successfully./l Overall these more complicated "demand management" measures are in their infancy in Philippine urban areas. (Specific proposals for travel demand management are presented in para. 3.25 as part of a proposed strategy for addressing the congestion problem.) 2.20 Traffic Enforcement. Enforcement of existing traffic laws is noticeably deficient in Manila and in other Philippine cities. Among the more serious problems are: non-observance of traffic signals, lack of lane discipline, picking up/discharging public transit passengers in the roadway, and non-observance of pedestrian crossings. Given the importance of enforcement in improving the efficiency of the road network, the strength- ening of existing traffic enforcement units in Metro Manila and Metro Cebu should he a Government priority. (Specific remedial measures are presented in paras. 4.28-4.30 as part of the discussion of institutional aspects of traffic enforcement.) Improve Transport Planning and Investment Programming 2.21 Unbalanced road development both within and among Philippine urban areas is due in large part to weak national and local level transportation planning and programming. At the national level there is no systematic assemblage of urban transport infrastructure expenditure data and no stated strategy for investments in urban areas. Investments are typically on a project-specific basis rather than as ongoing programs. This has led to the wide diversity in the level of expenditures among principal Philippine cities. At the local level, comprehensive transportation plans have been developed only for Metro Manila, Metro Cebu, and Davao. While these plans, all prepared with the assistance of foreign consultants, are having a noticeable impact on subsequent investments (see Annex C) there has not been a consistent and coherent follow-up in which transportation plans (or modi- fications to these plans) have been systematically translated into ongoing investment programs. Part of the problem has been that all three plans made investment recommendations that were well beyond the capacity of national and local governmental funding capacities. Furthermore, in Metro Manila, there has been a proliferation of studies, the results of which have not been consistent or complimentary. More specifically, there has been conflicting advice on (a) levels of transport investment, (b) rail mass transit, and (c) the type and amount of needed road construction. Consolidated capital budgeting, including proposed expenditures of all national and local govern- mental agencies, has been attempted through the Capital Investment Folio (CIF) process; but to date this has had a tendency to be a "wish list" of projects desired by the several central governmental line agencies with /1 However, restraint of private motor vehicle use in Metro Manila would be compatible with Government policies. Resolution No. 1, l982 of the Metro Manila Transportation Policy Committee (consisting of the Ministers of MPWH and MOTC, the Vice Governor of Metro Manila, and Chief of the PC/INP) states that "restriction of entry of privately owned vehicles used for personal transportation into congested CBD areas is needed". - 13 - little discipline over actual expenditures. An important first step in establishing a consolidated Government position in Metro Manila is the current Metro Manila Urban Transportation Strategy Planning Project (MMUTSTRAP) housed in MOTC and directed by a steering committee composed of MPWH, MOTC, Metro Manila and PC/INP representatives. The initial study /1 established a unified transportation policy and investment strategy framework for Metro Manila taking into account past transportation studies for the Metropolitan area and emerging Government policies in urban transportation. Attention to important planning standards, including right-of-way and roadway widths, provision of sidewalks, and other details has been inadequate in urban transport plans to date. 2.22 Based on these conditions the following measures are recommended: (a) The Committee on Transportation Planning constituting the principal agencies concerned with urban transport (MPWH, MOTC, and NEDA) should continue meeting regularly to set investment policies and priorities./2 These decisions should be made on the basis of a systematic needs analysis (see paras. 4.18-4.20 for discussion of the institutional aspects of this body). (b) At the national level, there is a need on the part of the key line agencies (MPWH and MOTC) to recognize the growing impor- tance of urban transport as a specific problem, and to start aligning their planning and budgeting processes to deal with this. At present, planned highway investments are categorized by region and by road category; introduction of an urban/rural differentiation would be useful from the point of view of analysis and planning. Since urban areas constitute 34% of the nation's population, and well over half of the motor vehicles, an important first step in improving the urban transport investment process would be the systematic assemblage of records regarding urban investments. (c) The MPWH needs to put its urban transport investments on more of a programmatic basis rather than on the present "lumpy" project-oriented system which tends to be inefficient and dis- courages steady rational budgeting. Urban highway investments are currently based upon a rolling five year program in the MPWH, but the program does not appear to relate closely to comprehensive needs analysis, or to comprehensive transport plans. Part of the /1 Metro Manila Urban Transportation Strategy Planning Project (MMUTSTRAP), Part A Final Report, by DCCD Engineering Corporation and Pak-Poy and Kneebone Pty. Ltd. for MOTC, April 1983. /2 Set up under Executive Order No. 658 on February 28, 1982. - 14 - problem has been the lack of funds available for urban road investments (see para. 2.33) making it difficult to establish rolling programs in secondary cities. (d) Comprehensive transport plans should be developed for all major cities (say, over 100,000 population) and should be regularly (5-10 years) updated; less ambitious plans should eventually be developed for all cities down to a population of about 50,000 persons. (See also paras. 4.21 and 4.22 for discussion of institutional aspects of urban transportation plan preparation.) (e) All significant cities (say, over 50,000) should have consoli- dated rolling 3-5 year capital investment programs that place proposed urban transport investments in context with other proposed investments and available funds. (f) Urban transportation plans should specifically set standards for: (i) right-of-way widths for public and private roads; (ii) roadway construction including pavement types and cross sections; and (iii) appropriate provisions for pedestrian protection along and across principal streets. The production of an urban roads design manual by MPW- should be considered as a means of furthering this objective. Clarify Jurisdictional Responsibilities for Construction and Maintainance of Urban Road Systems 2.23 The substantial variance in the development of urban road systems among cities was described in paras. 2.10-2.13. Even greater variance in road system development among cities is exhibited when considering jurisdic- tional responsibilities. For example roads under city jurisdiction consti- tute only 14% of all paved roads in Iloilo but 53% of all such roads in Bacolod; national roads constitute as little as 23% of total paved roads in Bacolod and 51% of all such roads in Davao (Table 2.8). A surprising find- ing is that barangay roads constitute over half of total road kilometerage in Philippine cities when considering unpaved road segments. In some cities barangay roads are also significant in terms of paved road links, such as in Iloilo where 42% of paved road kilometerage are barangay roads. In most cases the barangays do not have the technical and financial means to deal with their extensive urban network. In some cities subdivision (private) roads also constitute a significant proportion of total street kilometerage. In many cases, these roads are built to sub-par standards with unsatisfac- tory connections to the public road system, thus making it difficult to incorporate them into the publicly owned system at a later date. 2.24 Based on the considerable observed disparities in jurisdictional responsibilities among major Philippine cities, the following remedial measures are recommended: - 15 - (a) existing road systems in all cities should be subjected to a standardized functional classification scheme in order to systematically assess needs and to assign responsibilities (especially funding) for road construction and maintenance/I; (b) based on the findings of the functional classification exercise, an action program for reassigning jurisdictional responsibilities should be developed; (c) refined criteria for determining jurisdictional responsibilities for financing new road construction should be developed; and (d) local governments should be more assertive in setting and enforcing construction standards for privately provided roads (see also para. 2.22 above) and in planning their integration with the publicly provided strieet system. Improve Urban Road Maintenance 2.25 The financing of urban road maintenance is heavily controlled by the MPWH. The Ministry disburses budgeted funds through its 13 regional offices which, in turn, pass the funds to the districts and cities. Actual maintenance work is carried out by distr:ict and city engineering offices almost entirely by force account. The aLlocation of MPWH maintenance budgets to cities for roads under their jurisdictions is very small cons ti- tuting only about 2% of the MPWH road ma;Lntenance budget (Table 2.10). 2.26 The allocation mechanism to local units of government is based on a per kilometer funding system. Cities receive only one third of the estimated total cost of road maintenance,, as compared to other jurisdictions who receive more, principally on the rationale of their greater relative ability to pay (Table 2.11). In practice, however, the one-third allowance (matched with two-thirds local funds) for maintenance of city streets is insufficient; cities generally concentrate their annual maintenance budgets on small portions of their overall networks to more adequately maintain critical segments of the network, and to rehabilitate those portions in the worst condition. 2.27 Since barangay roads constitute: a significant percentage of total road kilometerage in some cities, they detserve particular attention. Since 1980 responsibility for funding barangay roads has been transferred to the Ministry of Local Government (MLG). Unfcrtunately, neither the MLG nor the /1 MPWH has agreed to begin this exercise under a proposed Bank sponsored highway project. - 16 - barangays have experienced staff or adequate equipment to satisfactorily manage the construction or maintenance of these roads in urban areas. While the City Engineer's Office has no official role in maintaining barangay roads, it is often requested to provide technical and equipment assistance to inadequately staffed and poorly equipped barangay units. Overall, the application of this dual jurisdictional system does not appear appropriate in urban areas. It would appear that the city government should assume responsibility for maintaining and improving barangay roads in at least the urbanized portions of the territory under their jurisdictions./l 2.28 While central Government funding of local road maintenance is not adequate, selected studies suggest that local road maintenance budgets could be less than half of the total needed amount./2 Cities typically have inadequate or poorly maintained equipment to conduct appropriate road main- tenance. Due to lack of funds, maintenance tends to involve costly remedial measures on deteriorated road sections as opposed to concentration on less costly preventative measures. City maintenance staffs lack training and morale is often low. 2.29 Based on the above observations it is recommended that (a) MPWH and particularly the cities allocate more money to maintain urban roads, (b) cities establish carefully designed routine maintenance programs, and (c) the role of barangays in urban road maintenance be reviewed with a view to a reduced (or eliminated) role, and (d) a nation-wide program be developed under MPWH leadership for training municipal officials in road maintenance. (See also para. 4.31 for a recommendation on maintenance train- ing programs for Philippine cities.) Increase Central and Local Government Funding of Urban Road Construction 2.30 Systematic data on expenditures for urban transport infrastructure has not been kept by MPWH and cities and, therefore, is very difficult to extract. (See Annex H for a review of past and proposed investments in Urbai Transport.) However, it is clear that the MPWH has made the majority of all capital investments in urban roads. Cities and municipalities by comparison contribute very small sums to road investment. Even in the National Capital Region, where municipal finance is the strongest, municipal/city capital investment has been, until recently, less than 20% of the total metro area road construction budget (Table 2.12). /1 Several cities have extensive rural areas within their territorial jurisdictions. Barangay roads in these rural areas could continue to be maintained by the barangays. /2 Maintenance of Roads and Drainage, Cagayan de Oro and Davao; Cowiconsult December 1981. - 17 - 2.31 Investment in Metro Manila. Given Metro Manila's one-third share of the total urban population, its 40% of all vehicles, and its contribu- tions to the national economy, this area deserves especially careful transport investment consideration. The great bulk of urban transport spending up to 1980 has been on roads wit:h lesser investments in the bus and rail systems./1 It appears that over the past several years the Metro Manila region has received about 10% of t:he MPWH highway investment for the country as compared to its 12.4% share of the total population (Table 2.12). From an investment per motor vehicle perspective Manila is receiving about only one-quarter as much as the rest of the Philippines. While it could be justifiably reasoned that rural areas have a less developed infrastructure, have less ability to pay, and that rural areas need more road infrastructure on a per capita basis, it does not appear that Manila has been receiving a disproportionate share of the total national road budget. In fact, if this modest level of investment (which has been declining substantially in real terms) is sustained much longer, traffic conditions will severely deterior- ate and the basic road system will not be adequately developed on the urban fringes./2 An important positive trend, which should be encouraged, is the increasing share that local (city and munLicipal) governments are contribut- ing to urban road construction in Metro Manila (Table 2.13). During the 1977 to 1980 period the share of total road construction expenditures by local units of government rose from 15% to 31% in Metro Manila. 2.32 Needed road investment activities beyond low-cost traffic management measures in Metro Manila include: (a) upgrading portions of the primary arterial system including selective widening, junction improvements (including grade separations in some cases), anc. pavement improvements; (b) constructing missing road links in the primary arterial system within the urbanized portion of the Metro area; (c) upgrading selected links in the secondary arterial/collector road system to improve connectivity between major arterials; and /1 Port and airport investment is treated here as a national rather than as an urban investment. This pattern has recently changed with the commencement of the Light Rail Transit System in Manila. /2 Recent indications are, however, that; Government is preparing to spend only marginally more on urban transport in Manila. The 1982 Capital Investment Folio Study projects P 2.4 billion for the 1983-87 period (in 1981 pesos) as compared tco only P 1.6 billion for the comparable 1978-82 period (in current pesos). - 18 - (d) constructing new roads in rapidly urbanizing areas. This latter item is particularly important in view of Metro Manila's current 4% annual growth rate which would result in doubling its population over the next twenty years and a similar doubling of its urbanized area./_ 2.33 Investment in Principal Cities outside Metro Manila. Outside Metro Manila MPWH urban road investments in principal Philippine cities have tended to be small over the last several years. Furthermore, these invest- ments have tended to occur in "lumpy" project-oriented investments rather than sustained programs (Table 2.14). Overall investments in these cities are well below investments in Metro Manila and the national average by almost any indicator. On an expenditures per capita basis, national road investments were at least 20 times higher than the secondary cities studied, and at least 14 times higher on an expenditures per motor vehicle basis. Overall, the case for increased investments in urban roads in principal secondary cities outside Metro Manila appears to be very strong. (See Annex C for presentation of proposed investments in Metro Cebu and Davao.) 2.34 Summary on Road Construction Funding. Investment in transport infrastructure was clearly one of Government's top priorities in the 1970s; however, this is no longer the case, and the transport share of total Government investment is declining (Table 2.15). Much of the past emphasis has been on inter-regional and rural road development -- the increasing infrastructure needs brought about by the rapid growth of the main Philippine cities have yet to be fully recognized and policies devised to meet them./2 Continued funding of urban transport at the current low level in the nation's larger cities is bound to have considerable adverse conse- quences in a few years. If investments (especially for roads which require new or wider rights-of-way) are not timed appropriately, the subsequent cost of providing these facilities in real terms is bound to rise substantially. /1 If important rights-of-way are not secured soon and a phased construc- tion program begun on the developing fringe of the metropolitan area, ultimate development costs (caused by costly right-of-way acquisition) will be much higher and desired road alignments may have to be com- promised or forgone with consequent adverse traffic impacts. In some cases, where advancing urbanization threatens to block needed rights- of-way, purchase of key land parcels may be appropriate with road construction undertaken at a later date when funds are available. /2 The Government's program of inter-regional and rural development has been substantially assisted by bilateral and multilateral aid/lending agencies (including the World Bank) without corresponding assistance in urban roads. - 19 - While the need for urban transport funding is greatest in the nation's largest cities, these cities also have the potential to raise considerably more revenues for urban transport and should be encouraged to do so./1 In summary, both MPWH and city expenditures on urban road development will have to be sharply increased in coming years to meet increasing demand. 3. PUBLIC TRANSPORT A. Description and Evaluation of the Existing System 3.01 The urban public transport system in the Philippines is one of the most unusual in the developing world. A dominant proportion of all person- trips in principal cities is provided by jeepneys, most of which are operated by drivers who rent the vehicle on a daily basis from numerous independent jeepney owners. In secondary cities, tricycles combine with jeepneys to provide a similar role. The only intra-city bus services operating with standard size buses (40-60 seats) serving fixed routes are in Metro Manila where the Metro Manila Transit Corporation (MMTC) and several private bus companies provide service; but their total combined patronage is less than half of the jeepney operators./2 (See Annex D for a more complete descrip- tion of public transport in Metro Manila and Metro Cebu.) 3.02 The urban public transport system in the Philippines is over- whelmingly a private enterprise operation. The only publicly owned services are the relatively small 848 bus MMTC system and commuter rail system opera- ted in Manila by the Philippine National Railway (PNR). Together these publicly provided services account for about 7% of the 8 million daily public transport trips in Manila and will account for about 11% of such trips after the opening of the light rail transit (LRT) system. Private taxi service is available in Manila and in principal secondary cities but is too expensive for everyday use by the general public. 3.03 Assets. By most standards the urban public transport system must be considered good. Public transport is generally convenient (good system coverage, high frequency of service, and reasonable speeds in most loca- tions) and is affordable by the majority of the population. Furthermore, /1 One possibility to encourage greater city expenditures would be the use of Central Government matching grants with Government providing funds as a prescribed function of city expenditures. /2 Only MMTC provides significant intra-urban service penetrating into the center of Manila in direct competition with jeepneys; while providing some radial routes private bus companies concentrate most of their intra-urban services in outlying portions of the metro area and along the Manila ring road (EDSA) where jeepneys are banned. - 20 - the system is provided to the general public almost entirely by the private sector with very little governmental subsidy. The service coverage area is especially good by any basis of comparison./1 For example, essentially all residents of the built up area of Davao are within 250 meters of jeepney routes and most routes are served at headways of one minute or less. The same is true for most of Metropolitan Manila and Cebu. In less dense areas, tricyles provide a feeder service to the jeepney or bus routes, bringing public transport almost to the "door-to-door" level. 3.04 Liabilities. While the general level of public transport mobility appears to be high, a number of major problems limit the performance of the public transport system. The emergence of moderate to severe traffic congestion on selected major arteries and intersections, which increases travel times and limits capacity, is a major concern. Other problems which have been mentioned by Government officials are long travel times (in Metro Manila and Metro Cebu), too many transfers (time and cost concerns),/2 lack of comfort (especially on longer trips), excessive fuel consumption (impact on balance of payments), unsafe driving of operators, "ruinous" competition among operators, selective overcharging and route cutting and an excessively fragmented ownership system that is difficult to regulate. Air and noise pollution is cited by the National Pollution Control Commission (NPCC) as a further problem. While public transit is affordable to most families, fare levels restrict the frequency of use of the system by the urban poverty group which constitutes about one-third of the urban population. 3.05 Emerging Issues. To further assess the urban public transport system the following five emerging issues are sequentially addressed: (a) the appropriateness of bus-jeepney route rationalization in Metro Manila as a means of reducing congestion and energy consumption and improving service to the general public; (b) the role of rail mass transit in Metro Manila; (c) the future role of the public and private sectors in public transit; (d) the establishment of an urban public transit fare policy; (e) the traffic congestion problem. /1 In Manila, jeepney route coverage is particularly extensive, operating on almost twice as many kilometers of roads as buses, utilizing over 600 officially designated routes and possibly over 740 official and unofficial routes. /2 The 1980 M124TIP survey indicated that 37% of jeepney passengers and 49% of bus passengers had to transfer one or more times per trip. - 21 - An important and highly related issue -- regulating public transport -- is discussed in Chapter 4 due to the institutional focus of this subject. B. Bus-Jeepney Regulation and Route Rationalization in Metro Manila 3.06 The Ministry of Transportation and Communications (MOTC) and its associated Board of Transportation (BOT) are continuing to investigate the possibility of "rationalizing" the route structures of the various public transport modes in Manila to address problems caused by "the lack of func- tional coordination among these modes that creates chaos and inefficiency in the mass transport system." The specific objectives of these investigations are: (a) to define complementary roles between buses, minibuses, and jeepneys; and (b) to determine the required number of public transport vehicle units on each of the proposed routes. The essence of emerging proposals are as follows:/l (a) placing a ceiling on jeepney franchises at or near the currently registered levels; (b) allowing existing jeepney operators to select from a "menu" of Government prescribed routes;/2 (c) changing the current identical bus/jeepney fare structure to a structure which favors jeepneys over short distances and encourages bus transport for trips over 5 km in length; and (d) consolidating the many bus companies into fewer (currently 14) and (hopefully) stronger consortia, and strengthening the jeepney cooperative system to reduce excessive competition and to facilitate regulation. /1 For the most recently emerging Government policy see Final Report, Metro Manila Urban Transportation Strategy Planning Project - Part A - DCCD Engineering Corporation and Pak-Poy Kneebone Pty. Ltd., April 1983. See also Table 3.1 for a summary of existing and proposed Government policies and mission recommendations in public transit regulation. /2 Jeepneys would be allowed to operate anywhere between 10:00 p.m. and 5:00 a.m to allow a more demand responsive system during these low- travel hours. - 22 - The net effect would be to evolve bus services from combined short- and long-haul operations to primarily long-haul operations. Jeepney operations would evolve to provide bus feeder services and to service trips shorter than 5 km. Overall, there would be a drop in jeepney operations on primary arterial streets with corresponding increases of bus services on these arteries. Existing jeepney operators would be allowed to increase services on secondary arterials and local streets. 3.07 A major reason for attempting to shift more public transport service to the bus in Metro Manila is derived from the recognition that public transport modes have different passenger carrying capacities per unit of road space utilized. The table below shows that, based on TEAM estimates, fully loaded buses are about twice as efficient as jeepneys in utilization of road space. PASSENGER CAPACITIES PER PASSENGER CAR UNIT (PCU) FOR PUBLIC TRANSPORT MODES Typical Crush PCU Seating Typical Typical Crush passen- Seats passen- Transport equiv- capac- load occu- capac- gers per gers pe Mode alent ity factor pancy ity per PCU PCU PCU Jeepney 1.5 15 60% 9 20 6.0 10.0 13.3 Minibus 1.8 35 56% 25 50 13.8 19.4 27.8 Bus 3.0 55 53% 29 90 9.7 18.3 30 Automobile 1.0 5 - 1.5 6 1.8 5.0 6.0 Source: TEAM and MOTC; mission estimates for the automobile. 3.08 An additional objective of the route rationalization effort is to reduce the fuel consumption associated with public transport travel. The higher capacity public transport modes (principally buses) consume less fuel per passenger-kilometer when operating at their seating capacities than do mini-buses and jeepneys. Higher speeds also reduce fuel consumption per passenger-kilometer. Consequently, it is reasoned that shifting passengers to higher capacity modes on congested corridors should reduce the road space required per passenger, thus increasing traffic speeds and reducing the fuel consumption per passenger-kilometer of travel. 3.09 The proposed route rationalization schemes in Metro Manila (but with obvious application elsewhere) may indeed increase passenger-carrying capacities in the affected corridors, and if adopted extensively throughout - 23 - Manila might save up to 2% of national transport based fuel consumption (see also para. 5.05). However, these benefits come at the cost of restricting from these routes an immensely popular, efficient, and self-supporting mode -- the jeepney./l This vehicle has been popular because of high quality service (very high frequency, good seat availability, and good penetration into neighborhoods). Extensive rationalization is likely to mean less frequent service, more standing, and possibly more transfers (which may mean higher costs to patrons)./2 There is danger in replacing a system that, while having some deficiencies, is generally successful in serving the public and is financially self-supporting, in favor of a system which may be less popular and less profitable (if not unprofitable)./3 Any public transport scheme which has the effect of even marginally reducing existing levels of service is likely to be strongly resisted by the general public and, in fact, runs counter to long-term trends of gradually providing higher levels of service (faster, more comfortable, fewer transfers, and more direct) as incomes rise. 3.10 In view of the above observations, the following conclusions are offered: (a) A complete restructuring of jeepney operations to complement line-haul bus services on principal streets by acting as a feeder service is likely to be too abrupt an evolution at this stage in Manila's public transport development. The resultant decline in service will be too sharp in relation to likely congestion reduction and fuel savings benefits. (b) Prior to initiating measures sharply restraining jeepney operations on given streets, measures aimed at increasing the road capacity and restricting low-occupancy vehicle use -- principally auto- mobiles -- should be attempted (see para. 3.25). (c) Only when it is established that such remedial measures will not sufficiently reduce congestion to acceptable levels should the number of jeepney operations be restricted in favor of /1 The jeepney share of total public transport trips increased from 76% in 1971 to 86% in 1981; whereas bus passenger trips increased only 5% over the period, jeepney patronage more than doubled. /2 It is also possible that some rerouting could reduce the percentage of patrons needing to transfer. /3 The recent leasing of 1,500 buses to the private sector through MMTC is apparently proving to be financially unsatisfactory. Bus operators do not appear able to compete with jeeprneys on the same routes with the same fare structure with their relatively more costly vehicles. As of early 1983 there also appears to be an overconcentration of buses on a few routes resulting in an oversupply and consequent unprofitability. - 24 - encouraging higher occupancy buses to increase the efficiency of available road space. Given the technical and political problems associated with restricting jeepney operations on congested streets, a careful stepwise approach in which the impacts of Government policies are tested might be the most practical approach. (d) Along routes or in the areas where congestion is not a substantial problem, allowing entry to all qualified jeepney operators appears appropriate. The resultant strong competition should encourage retention of low fares consistent with the need to serve the urban poor at the lowest possible rates (para. 1.06). The argu- ment that this will result in ruinous competition does not appear to be supported by current conditions under which jeepney patronage is growing, illegal operations exceed legal franchises by a wide margin, and those wishing to become jeepney drivers substantially outstrip available positions. (e) High priority should be directed at addressing the currently ".chaotic" aspects of jeepney operations, especially congestion - causing illegal stopping and hazardous driving, through (i) provision of complementary traffic management measures (see para. 3.25 (c)(d)); (ii) improved traffic enforcement (see also paras. 4.28-4.30); and (iii) development of organized cooperatives or associations to evoke industry self-discipline./l (f) The proposal for slightly adjusting the fare structure to rein- force the jeepneys' competitive advantage over buses for short distances and encouraging bus transport over 5 km appears to be reasonable incremental strategy which could be tested at limited risk. C. Rail Mass Transit 3.11 History of Proposed LRT System in Manila. Since the late 1960s a number of alternative proposals have been considered for expanding the capacity of Manila's public transport system by providing monorail, heavy rail, or light rail transit (LRT) services. The most recent comprehensive transport study for Manila was the Metropolitan Manila Transport, Land Use, and Development Planning Project (MMETROPLAN), completed in September 1977. After reviewing several mass transit proposals, the MMETROPLAN study rejected all options proposed for a segregated right-of-way concluding that: any ... fully segregated public transport system, whether light rail or busway, would ... be uneconomic. As such systems would require the appropriation of most, if not all, of the /. Public transport cooperatives have been successfully developed in several major cities including Bogota and Buenos Aires. - 25 - available funds for all transport (including highways) in Metro Manila for the foreseeable future, and as there is no... rationale for their implementation, they have been rejected from further consideration." /1 3.12 Along with pricing restraints on private cars and express lanes for high-occupancy vehicles, the MMETROPLAN study recommended a European- style street-level LRT system with overhead electric power and at-grade intersections controlled by traffic signals. The cost of constructing such a system was estimated at P 4 million/km in 1977 prices. Four corridors were identified as promising locations for such LRT services: Rizal Avenue, Quezon Avenue-Espana, Shaw Boulevard and Taft Avenue. The main ration"ale presented for this type of system was its high passenger carrying capacity per unit of road space: "... it occupies the same amount of road space as a single bus lane but has at least the capacity of a double lane" and "it achieves the same journey speeds as buses and jeepneys in priority lanes." 3.13 After extensive review of the MMETROPLAN recommendations, in early 1979, a technical working group in the then Ministry of Public Works, Transportation and Communications (MPWTC) adopted a recommendation for the construction of a first-stage LRT along the Taft Avenue-Rizal Avenue corri- dor. This proposal differed from the MMETROPLAN proposals in recommending that certain intersections with principal streets were to be elevated./2 In November of 1979 the newly created MOTC completed another evaluation of the Taft-Rizal line, and concluded that the entire 15 km line should be elevated, at a 1979 cost of P 135 millior/km. 3.14 The elevated double-track system is being constructed on single concrete columns in mid-street, with 18 stations located every 600-700 meters and connected by stairways to street level./3 Total costs for the Taft-Rizal line were estimated in 1981 to be P 2.1 billion, including possible cost escalation and contingencies: P 1.1 billion for the civil works, and P 1 billion for the electromechanical equipment and track. Construction commenced in mid-1981 and the line is scheduled to begin operations in 1984-85. /1 Metro M4anila Transport, Land Use and Development Planning Project, Final Report -- Summary and Recommendations, Freeman Fox and Associates, July 1977. /2 This recommendation was based on calculations that showed the need for substantial traffic signal preemptioni of side street traffic. /3 The civil works construction is being carried out by the Construction and Development Corporation of the Phlilippines (CDCP), and the system will be operated by Meralco Transit Organization, Inc. (a subsidiary of the Manila Electric Company), under contract to the Light Rail Transit Authority (LRTA). - 26 - 3.15 System Financing. Financing for the P 1 billion electromechani- cal portion of the project has been arranged through state and buyers credit loans with the Belgian suppliers. This financing is in two parts: a state loan of P 250 million provided over a 30-year period with no interest and a 10-year grace period on principal payments, and a buyers' credit loan of P 750 million over a 15-year period at 7.75% interest, with a 6-year grace period on principal and interest payments, and the interest over the first 6 years being capitalized. In mid-1981 MOTC began construction with an interest-free loan of P 200 million provided by the Philippines Govern- ment, with the source of the remaining civil works financing not secured. As of November 1982, remaining funds for constructing the LRT system were obtained from the national budget, the Hong Kong commercial market, and from the Central Bank. 3.16 System Patronage and Financial Status. With 64 railcars the initial capacity of the system is estimated to be 20,000 passengers per hour per direction or in the range of 400,000 to 700,000 total passengers per day. While the LRT system can be expected to attract longer trips by virtue of higher travel speeds, jeepneys will continue to attract most of the shorter trips in the corridor. 3.17 System patronage and overall LRT financial status is likely to be highly dependent upon the fare levels set for the LRT. Current Government estimates are that the fare should be in the range of P 1.0 to P 1.5 (compared with P 0.65 for the existing basic bus and jeepney fare) in order to balance the objectives of maximizing profits and patronage. Numerous studies have been conducted to estimate LRT finances based on various patronage, fare, and financing cost estimates. The most recent estimate is that a P 100 million annual subsidy may be required for the first 10 years of operation./l 3.18 Even if the LRT sytem could be shown to have a positive financial and economic rate-of-return, the relative economic benefit of this system in relation to other needed transport investment in Metro Manila should he questioned. For example, the originally estimated P 2.1 billion cost of the first phase system is equivalent to about 10 years worth of road construction (using inflation-adjusted expenditure trends for the 1977-82 period) in Metro Manila (see Table 2.12). When completed, the LRT system will at most attract 5% of all motorized person-trips as compared to the road system which will have to accommodate virtually all other motorized travel. 3.19 LRT Extensions. With the Taft-Rizal LRT line under construction, LRT planners have studied a number of potential extensions to this first line, both on radial and circumferential routes. However, further invest- ments in the LRT system are being deferred pending a careful analysis of the actual patronage and financial performance of the initial LRT system. /l Metro Manila Urban Transportation Strategy Planning Project - Final Report, Part A, page 71, April 1983. - 27 - 3.20 Philippine National Railway (PNR) Commuter Rail Service. The PNR currently provides commuter service as frequently as every 15-20 minutes during peak travel periods. (See Annex D). The potential for upgrading PNR commuter rail service in Metro Manila is under active study. Currently, the service is a low volume, high cost operation with 20-30% of its costs being recovered by fares and freight revenues./l About 88% of total daily patronage of 26,000 passengers is on the south line, with the rest on the under-utilized north and east lines. Overall PNR assets and services have been in decline for over two decades. Substantial investments would be needed to upgrade its operations for commater rail service. It is unlikely that the PNR on present alignments can ever play a significant role in Metro Manila Transit, particularly considering the option of improved express bus service./2 3.21 Rail Mass Transit Conclusions. The following considerations are recommended regarding investments in rail mass transit within Metro Manila: (a) Now that the Taft-Rizal LRT line will be completed in 1984-85 current MOTC efforts toward minimizing the substantial financial losses the system is likely to incur should be strongly supported. Among the possibilities to be explored are: (i) potentials to pro- vide feeder-bus and/or feeder-jeepney services, (especially to the north and south terminals of the LRT system); (ii) careful studies of fare levels in relation to patronage in order to maximize revenues; and (iii) the potential for increasing patronage by encouraging construction of major employment, commercial, and residential concentrations at or near new stations. (b) Consideration of investments irL additional at-grade or grade-separated rail systems should be deferred pending a re-examination of the financial, and economic feasibility of system expansion, especially with regard to alternative traffic management and infrastructure options. Manila is at an important crossroads with regard to public transport policy. The uncer- tainties surrounding the long-term viability of current rail transport proposals are sufficiently great to warrant a careful /1 PNR reported accumulated losses of P 264.7 million as of December 31, 1981 or an increase of over 79% from 1978 to 1981. Over the same period it received an equity infusion of P 3173 million from the National Treasury. /2 For supporting evidence see section 10.2 Final Report Main Volume METROPLAN Freeman Fox and Associates, July 1977 - which explicitly ruled out on economic grounds upgrading of the system to either a "rapid tran- sit" or "suburban standard," arguing that road-based public transport could more economically provide the service. - 28 - re-examination before final decisions are made. It is logical to consider high capacity rail transit systems as potential solutions to mobility problems in large and growing cities like Manila, where traffic congestion is a problem and travel demand appears to be increasing steadily. However, every major intra- urban passenger rail system in the world to date has required substantial levels of public funding to support construction, maintenance, and operations. Present indications suggest that rail transit proposals for Manila would also require substantial and continuing public funding support. There is a substantial risk that such projects will place considerable strain on the nation's financial and technical resources without generating commensurate economic benefits. It is unlikely that any LRT transit investment can be justified over the next several years. (As indicated in para. 3.19 further investments in the LRT system are being deferred pending a careful analysis of the actual ridership and financial performance of the initial LRT system). (c) Given its limited potential, no major investments should be made in the PNR commuter rail system unless it can show that the decline in its operations is arrested and some improvement in both operations and traffic has been achieved./l Efforts should be focused on improving management efficiency and maintenance, and low-cost rehabilitation. Given the low patronage on its northern and eastern lines, discontinuing commuter services on these lines should be considered. D. Role of Public and Private Sectors 3.22 The above issues only indirectly addressed the question of the degree to which urban public transport systems in the Philippines should be publicly or privately operated. Based on the preceding analysis of current urban transport conditions in principal Philippine cities, it was concluded that: (a) Government has to face a major financing challenge to adequately maintain and upgrade existing roads and to construct new roads in rapidly urbanizing areas; and (b) jeepneys (or similar vehicles) can provide the bulk of public transit service for the foreseeable future. Consequently, there appears to be a strong case for minimizing future Government invest- ments in public transit. It is recommended that: (a) no additional publicly owned intra-urban transport systems (bus or rail) should be ini- tiated in the near future; (b) the publicly owned MMTC should be assisted in /1 Similar findings are expressed in Transport Sector Report (No. 3916-PH). - 29 - maintaining a profitable operation of its bus fleet /1 while remaining at approximately the same scale of operations;/2 and c_) the principal Governi- ment effort in public transit should be imLprovement of its regulatory and associated enforcement functionis. (See paLras. 4.32-4.39 on regulatory pro- posals.) Current Government policy is generally consistent with these guide- lines. Further investments in the LRT system are being at least deferred (para. 3.21(b)); MMTC operations are not being substantially expanded and private bus operators are being encouragedt to increase service; and a substantial reexamination of the Governmeit's role in Public Transport regulation is being conducted under the cuirrent Metro Manila Transportation Strategy Planning Project./3 E. Urban Public Transit Taxation and Fare Policies 3.23 Government's policy decisions in setting public transit fares are particularly critical in view of the desirability of permitting reasonable access to public transit services by low income families. While it is tempting to offer some form of relief to -this group, no city-wide urban transport subsidy system targeted at specific income groups is known to be operationally successful without substantial abuse,/4 and across the board fare subsidies would prove to be very costly. Furth-ermore, a major subsidy program would likely require the abolitiona of the existing relatively efficient private sector operated system. To permit fares to remain as low as possible, it appears that the best Governinent strategy would be to assist /1 By virtue of a concentrated managerial effort, for the first time in its seven years of operations MMTC reported a profit of P 2.2 million on total revenues of P 136.3 million in 1982. However, MM4TC is still far from eliminating the aggregate loss of P 137.4 million it has accumu- lated since it started operation in 1975. In 1980, its capitalization was increased from Pl 125 million to P 500 million through Govern- ment's conversion of MMTC-s debts into shares in equity. /2 However, the MMTC could serve a useful role in experimenting with innovations that might not be tried by the private sector because of the financial risks involved such as: (a) high-capacity/low-cost bus service (para. 3.23); (b) higher quality express services using mini-bus or air-conditioned bus vehicles; and (c) feeder services to the LRT system (para. 3.21). /3 The so-called "B-I" study under an Australian aid grant which commenced in July 1983 will particularly address a number of public transportation regulation issues. /4 However, special low-income user grot.ps, such as students and the elderly, have been successfully accommodated. - 30 - private operators in reducing costs and increasing efficiencies. Among the proposals considered by MOTC that appear to have particular merit are: (a) abolition of the common carriers tax, which applies to bus and jeepney operators (as well as truck operators). This tax is set at 2% of gross revenues and, apart from the revenues generated, does not appear to have much justification;/l (b) experimenting with high-capacity/low-fare bus service to reduce the cost to urban poor. This type of service would be restricted to the highest volume travel corridors in Metro Manila and would feature very high passenger load factors with minimal seating; and (c) experimenting with a maximum fare system. Under this approach all operators would be legally allowed to cut fares below maximum levels. F. Addressing the Traffic Congetion Problem 3.24 In preceding sections of this chapter the utilization of system-wide bus-jeepney route rationalization schemes and investments in light rail tran- sit were not recommended as appropriate methods to deal with the traffic con- gestion problem in Metro Manila, or any other Philippine city, at the current stage of transportation system development. System-wide route rationalization is not recommended due to likely disbenefits to the transit user, and rail transit is not recommended due to high publicly-borne capital and operating costs which are not justifiable by attractive economic returns. The question remains - what is the solution to the congestion problem? 3.25 It is recommended that Government proceed in a careful stepwise manner placing much greater emphasis on basic traffic engineering and enforcement, complemented by travel demand management measures that give priority treatment to public transit vehicles, and selective improvements and additions to the urban road system. More specifically, the problem might be addressed as follows: /1 Apparently the gross revenue tax is particularly difficult to collect from jeepney operators. The loss in revenue by eliminating this tax on buses and jeepneys could easily be recovered by marginally increasing the gas tax or by increasing annual registration or licensing fees on automobiles (and/or other vehicles) with the rationale that they are the most inefficient users of road space (see paras. 5.02-5.06). - 31 - (a) Highest priority should be given to continuing and expanding basic traffic engineering measures. Such techniques as traffic signalling, pedestrian barriers, and parking restrictions should be universally applied in principal cities. This approach, pioneered by TEAM, is urgently needed on a much larger scale in both Metro Manila and Metro Cebu, and within a few years will need to be widely applied in other Philippine cities. TEAM has clearly demonstrated the considerable impact that these relatively low cost measures can have on in improving traffic performance. (b) Introduction of improved enforcement measures to increase the effectiveness of traffic management schemes deserves similar high priority. Reorganization of enforcement functions to rationalize the roles of the Constabulary Highway Patrol Group (CHPG), the Board of Transportation (BOT), and local traffic police is an essential step toward resolving the enforcement problem. This should be combired with training and efforts to reduce enforcement anomalies. (See paras. 4.28-4.30 for further description of these measures from the institutional perspective.) (c) Provision of additional and improved jeepney/bus loading and unloading areas and off-street terminals combined with rigorous enforcement should be part of an early action program to reduce congestion in Manila and Cebu. Based on field observations, the lack of these facilities and corresponding enforcement efforts is unquestionably a major source of congestion on traveled streets. Provision of many more bus/jeepney shelters would also help to make public service more attractive to the traveling public. (d) Provision of additional exclusive public transit lanes and enforcement of existing lanes appears to be an appropriate early action strategy. While results from experimentation with bus/ jeepney lanes have not been conclusive due to poor enforcement, the potential benefits, as exemplified .by Bangkok and other cities, suggest the need for an even larger exclusive lane system and a better enforced program./1 The possibility of transit-only streets should also be investigated. /1 Bus lanes in Bangkok have resulted in higher speed for both public transit and private vehicles through reduced traffic weaving among these modes. In Manila, spot studies by TEAM indicated that public transit lanes contained an average of 15% non-transit vehicles. See Marler, N.W. "The Peformance of High Flow Bus Lanes in Bangkok," Transport Research Laboratory Report 723, 1982. - 32 - (e) Shape travel demand through public policies that favor efficient users of road space and discourage inefficient users. It should be recognized that by far the most inefficient user of road space is the automobile which typically consumes 5 to 10 times more road space per passenger than buses and jeepneys (see table after para. 3.07). Travel demand management policies should be advanced in three categories recognizing the substantial public cost of accommodating the low occupancy vehicle (LOV): (i) increases in taxes/fees at the time of purchase (see also para. 5.10); (ii) increased annual registration or licensing fees on ownership; and (iii) physical restrictions and charges to discourage LOV use and encourage transit use in specific areas at specific times. The last of these measures should include more rigorous parking restrictions and enforcement and (to the extent politically feasible) charges for LOV travel in specified city districts or along street segments during specific periods of the day (the latter restricted to Metro Manila)./1 While many of the above policies will be politically difficult to implement, and may conflict with other Government objectives, it is restrictions on passenger cars that, among all possible initiatives of Government, are likely to have the most beneficial long-term impact on reducing traffic congestion. (f) Selectively increase investments in urban road construction and maintenance. While the exact level of investments cannot be readily determined, there is no question that continuing growth in motorized travel will require increased expenditures on the urban road network, even with improved traffic management and enforcement and implementation of travel demand policies. These expenditures will need to be directed toward improving road maintenance, upgrading selected roads, and construction of new roads in rapidly urbanizing areas. (g) The need to accommodate anticipated future travel demand in all major travel corridors should be weighed against investment costs. The emerging Government public transport strategy for coping with congestion appears to be dominated by the desire to increase system capacity in relation to demand on all travel corridors. Thit approach is based on the assumption that the existing urban areas /1 See MMETROPLAN and recent reports by D.J.W. Roberts and DCCD/Pak-Poy for explanations of several possible strategies. - 33 - will continue to grow very rapidLy, and that traffic growth will occur primarily along high density corridors radiating from the central area. Little consideration is being given to encourag- ing a more decentralized or multi-centered type of development through complimentary urban transport investments. (A prime example of this phenomenon is the development of Makati in Metro Manila)./. Public transport planning needs to be coordinated more closely with land use and development planning to explore these possibilities. This issue is particularly important when costly major urban infrastructure investments are contemplated, such as the proposed LRT system and the upgrading of the Philippine National Railways (PNR) passenger lines serving Manila. An important lesson derived from transport planning in the developed countries over the past 30 years is that existing growth trends do not necessarily have to be accommodated. Where, for financial or political reasons, increased transport capacity was not provided, travel growth did not cause crippling congestion but was simply diverted elsewhere, usually to circumferential routes and to new suburban development. Conversely, where new capacity was provided, induced demand often brought renewed congestion after a few years. Major rail transit projects in particular have been accused of increasing street congestion rather than reducing it. This apparent anomaly can be explained by the fact that rail transit systems typically spur increased land-use intensities and thus generate substantial additional travel in the corridors (especially at stations) where they are located. Even if the rail system attracts a substantially higher percentage of total travel, the total magnitude of on-street travel by low occupancy vehicles -- principally automobiles -- can increase substantially causing even worse on-street traffic congestion. Even if a rail system can be shown to benefit overall travel in a given parti- cular corridor, the cost of this investment should be weighed against potentially less costly road investments encouraging less concentrated land development and travel in other corridors. 4. SECTOR INSI'ITUTIONS A. Principal Institutions and Agencies 4.01 The organization of national agencies dealing with urban transport has been rapidly evolving over the past several years. Transport planning, /1 See Annex E for further discussion of land-use planning as a means to reduce traffic congestion. - 34 - regulation, enforcement, and project execution and construction were inte- grated in the Ministry of Public Works, Transportation and Communications (MPWTC) until 1974. All governmental transport enforcement functions were consolidated under its Bureau of Transportation, and transport regulatory functions were integrated in the Board of Transportation (BOT), also attached to the Ministry. Responsibility for the construction and maintenance of roads and bridges was under the Bureau of Public Highways (BPH). A 1974 Presidential Decree elevated the BPH into a new Ministry of Public Highways (MPH) to facilitate the planning, construction and maintenance of the national road network. In 1979 the MPWTC was further split into two minis- tries: the Ministry of Transportation and Communications (MOTC) and the Ministry of Public Works (}PW). Two years later, in July 1981, a Presidential Order was issued merging the MPW7 and the MPH into the Ministry of Public Works and Highways (MPWH). 4.02 The urban transport functions in the Philippines are, therefore, principally under MOTC and MPWH. The National Economic and Development Authority (NEDA) also serves as a key program review and coordinating agency. More specifically, NEDA is responsible for macro-level sectoral planning to assist in defining what major infrastructure investments should be given funding priority in competition with needed infrastructure in other sectors. There are additional ministries and agencies, such as the Ministry of Budget, which have a significant role in funding urban transport. At the city level the city engineer's office acts as the key unit for constructing and maintaining local roads, assisted in some cases by the city planning office and the Mayor's office in project planning. (See Annex F for a more comprehensive discussion of agencies involved in urban transport.) 4.03 Ministry of Transportation and Communications (MOTC). The MfOTC is designated as the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity of the executive branch of the Government in the development and regulation of a network of trans- portation and communications systems. The Ministry is composed of the Ministry proper, an Administrative Service, a Financial and Management Service, a Planning Service, and four Bureaus: the Bureau of Land Trans- portation (BLT), the Bureau of Air Transportation (BAT), the Bureau of Telecommunications (BUTEL) and the Bureau of Posts (BUPOSTS). (See Organizational Structure of MOTC in Chart 1.) The Board of Transportation (BOT) and the National Telecommunications Commission (NTC), are also under the administrative supervision of the Ministry. 4.04 Regulatory responsibility for public transport in the Philippines is presently centralized in the Board of Transportation (BOT) which is responsible for franchising public transport vehicles and setting routes and fares; and the BLT which is responsible for vehicle registration, driver licensing, and enforcement for both its own rules and those of the BOT (see Chart 2). 4.05 The BOT is directed by a Board comprised of a Chairman and two full time Commissioners, all three of whom are presidential appointees. - 35 - (The Director of the BLT is an ex-officio miember of the BOT Board). BOT has a staff of approximately 200 regular employees and about 50 casual employ- ees, all but 30 of whom are located in Metropolitan Manila. The BOT budget passes through the MOTC but, because the commissioners are presidential appointees, the BOT is not fully under MOTC' direction./l 4.06 The BLT has a staff of approximately 2,450 persons, about 360 of whom are located in the central office in Manila. Unlike the BOT, the BLT has an extensive regional and field staff to carry out motor vehicle regis- tration, driver licensing and enforcement. There are 13 regional offices each with at least LOO staff members and about 160 additional field and extension offices. 4.07 Six agencies are also attached to the Ministry: the Metro Manila Transit Corporation (MMTC), the Light Rail Transit Authority (LRTA), the Philippine National Railways (PNR), the Maritime Industry Authority (MARINA), the Philippine Aerospace Developl2ent Corporation (PADC), and the Philippine Ports Authority (PPA). MMTC provides public transit services in Metro Manila, and was originally envisioned to become the sole bus carrier for the Metro Manila area. Although operating as an essentially independent Government corporation, MMTC's activities are also under the overall supervision of MOTC. LRTA has been established under MOTC to design and build a comprehensive light rail transit system in Metro Manila. The PNR plays a minimal urban transport role in Metro Manila, while MARINA, PADC, and PPA have no significant intra-urban transport role. 4.08 Ministry of Public Works and Highways (MPWH). The planning, design, construction and maintenance of national roads are the responsibility of MPWH. The MPWH is headed by a Minister who is assisted by three Deputy Ministers: (a) for Planning, Finance and Administration; (b) for Construction and Quality Control, including Bank-financed projects; and (c) for Design, Equipment and Maintenance. In addition, MPWH has six services (headed by Assistant Ministers) and five bureaus. The MPWH organization is function-oriented rather than output-oriented, and the same concept prevails in its field organization which consists of 14 regional offices and 94 district offices. 4.09 The MPWH was created mainly to assure better cooperation of Government staff and to avoid duplication of field organizations. MPWH has merged the former separate field offices of Public Works and Public Highways into one office effective January 1, 1982. In the Government's view, the merger of the two Ministries was justified. because nearly all important infrastructure projects in the Philippines have been completed and emphasis hereafter will be on maintenance of the completed projects. /I The BOT was formerly part of the Public Service Commission which is responsible for all utilities; the BO0's procedures follow the practices of this body. - 36 - 4.lO National road projects are initially identified by MPWRVs Planning and Project Development Office (PPDO) in cooperation with the National Economic and Development Authority (NEDA), with very little participation of the regional or district offices. In selecting projects, the PPDO usually considers the recommendations of the Philippine Transport Study,/1 its evaluation of relative priorities, and, in some cases, the priorities expressed by the Regional Development Councils. 4.11 Design and supervision of construction for Government-funded highways and streets are carried out mainly by the MPWH regional offices, often through their district and city organizations./2 Most of the actual construction work is carried out by contract, generally in small contracts let to local firms after local competitive bidding; some minor projects are executed by force account. Externally assisted projects are implemented by the MPWH Special Project Offices (SPOs). At present, MPWH has five such offices, one for each major source of financing: the Bank, the Asian Development Bank (ADB), the Overseas Economic Cooperation Fund (OECF), the Philippine-Australian Development Assistance Program (PADAP), and the Other Foreign Projects Office. These SPOs report directly to the Deputy Minister for Construction and Special Projects. 4.12 Maintenance of national roads, which continues to be a serious problem, is handled at the MPWrH district or city office level under the control and direction of the appropriate MPWT regional office. After approval of the MPWII annual budget, maintenance funds are sub-alloted by MPWH to its 13 regional offices using an allocation system based on an equivalent maintenance kilometer (EMK). The regional offices, in turn, allocate the funds to the various districts and cities on the same basis. 4.13 Enforcement Agencies. There are four principal Government agencies enforcing urban public transportation and traffic laws, rules and regulations: the Philippine Constabulary (PC), the Integrated National Police (INP), the Constabulary Highway Patrol Group (CHPG), and the Bureau of Land Transportation (BLT) (see Chart 4). Barangay leaders also assist in traffic enforcement and, in Manila, the Metropolitan Command (METROCOM), has /. This Bank-financed study was carried out by the METRA-SAUTI in l970. Another Bank-financed study, the National Transport Planning Project (NTPP), was completed at the end of 1982. /2 The MPWH usually delegates minor construction and most road maintenance to the city engineers office with corresponding funding. The city engineer is typically designated by MEWff with the concurrence of the mayor and city council. In essence the city engineer has both a national and local function. - 37 - a significant role. When martial law was ,leclared in 1972, all police and armed forces functions including the Air Force, the Navy and Coast Guard, were centralized under the Ministry of National Defense (MND). Within Metro Manila, in accordance with a Presidential Memorandum dated June 21, 1976, arrest or apprehension of violators of land transportation and traffic laws, rules and regulations has been confined to (a) agents assigned by METROCOM (members of the local police force); and (b) the CHPG (dealing specifically with offenses on national highways). 4.14 The BLT has the responsibility of enforcing both its vehicle and operator licenses as well as all of BOT regulations. While BLT has a sizable staff (see para. 4.06), for enforcement purposes it is given only 35 persons in the central office and typically one person per field office -- a hopelessly low number of personnel tco accomplish the job./l BLT can and does share its enforcement responsibilities with the Constabulary Highway Patrol Group (CHPG) of the Integrated National Police (INP) and, in Manila, with the Traffic Aides of the Metropolitan Manila Commission (MIC). However, this overlapping responsibility between BLT, CHPG and MMC produces a rather fragmented approach to enforcement which appears to be unsatis- factory for all the parties involved. Some rationalization of the enforcement functions is needed. 4.15 Cities and Municipalities. As seen from the preceding discussion, most policy, planning, construction, regulation, and enforcement activities related to urban transport systems are handled by national Government agencies. Cities and municipalities have a role in planning, construction and maintenance of streets under their jurisdiction but, as established in para. 2.03, these streets typically are not the key traffic arteries nor are cities currently expending significant amounts of their own funds for street construction. The cities are called upon to advise the BOT on regulatory aspects of intra-urban public transportation but have no official function in this matter. 4.16 The dominance of separate national agencies in urban transport is bound to become an increasing problem as urban areas grow in size and com- plexity. The extreme example of urban transport institutional fragmentation is in Metro Manila. The MOTC group regulates public transport (BOT), runs /1 BLT also needs equipment for driver testing, for vehicle inspection, and for efficient record keeping and proc:essing. Facilities are needed to conduct visual tests on drivers, and vehicles are needed to conduct road tests. Manual record keeping is not capable of keeping up with the numerous registration changes, particularly minor changes such as engine substitutions. BLT is currently introducing new coded number plates which will help to monitor vehicle registrations. All vehicles were to have the new plates by the end of 19132. These plates will help to identify jeepneys operating in the wrong metropolitan area, as all those registered in Manila will have plates beginning with the letter "M". - 38 - the public bus system (MMTC), will run the light rail transit system (LRTA); and assists in enforcement (BLT). The NPTWH constructs and maintains most major roads and currently is in charge of traffic management (TEAM). The Ministry of Defense handles most enforcement (PC/INP and CHPG). Further adding to the complexity are four cities and 13 municipalities in Metro Manila plus the Metro Manila Commission. Both Manila and other larger cities will need to assume a greater role in the development and operation of their urban transport systems in order to assure a coordinated and balanced approach to resolving existing and anticipated problems. 4.17 Analysis of the Institutional Framework. Because of the rapidly evolving nature of the organizations being developed to address transporta- tion in general, and urban transportation in particular, the respective roles of all agencies in the sector have not yet been clearly defined. Furthermore, sufficient numbers of adequately trained and experienced tech- nical staff have not yet been developed to fill the needs which currently exist. The key urban transport institutions -- MOTC and MPTJR - have grown from agencies which were not developed around urban transport problems. MPWH, for example, has historically dealt principally with inter-city and rural road building objectives. Their structures, therefore, do not currently fully reflect urban needs. Furthermore, urban transport problems are specific to each urban area and are difficult to deal with in a cen- tralized structure. The following, therefore, appear to be the most important areas for institutional improvement in the urban transport sector: (a) clarifying the roles and responsibilities of the key agencies; and (b) developing professional staff in these key agencies. The following analysis of eight key functions provided by urban transport institutions -- policy formulation, transport planning, infrastructure design and construction, traffic management, traffic enforcement, road maintenance, public transport regulation, and staff development and training -- should be considered in light of the above two findings. B. Urban Transport Policy Formulation 4.18 Given that most investment and regulation of urban transport is controlled by central government agencies, there is a substantial need for improved development and coordination of urban transport policies at the national level. This function is needed to provide the general framework against which plans of line agencies may be evaluated and overall efficiency achieved. Examples of the activities required at this level are (a) estab- lishing general investment levels for urban transport; (b) setting spatial priorities for investment among urban areas; (c) reviewing the national/ local financing mix for transport infrastructure construction and mainte- nance; (d) clarifying/resolving areas of jurisdictional overlap or omission; (e) setting training priorities; and (f) coordinating between design, regulatory and enforcement agencies. - 39 - 4.19 At present, most urban transport policy is generated by individual agencies with only minimal informal coordination at the national level. Steps are being taken, however, to meet this need. A ministerial level committee, the National Transport Planning Board (NTPB), has been established to serve as the needed policy body. The Board includes the Ministries of MOTC, MPTH, NEDA, and the Ministry of Tourism; the chair Ministry is MOTC. 4.20 The following are institutional recommendations to strengthen and improve national urban transport policy formulation: (a) The MOTC should continue to strengthen its role as the secretariat to the National Transportation Planning Board (NTPB). The NTPB will need strong technical support through a secretariat in order to function most efficiently. The MOTC, by virtue of its multi-modal transport planning responsibilities, is the natural agency to provide this technical support. The MOTC will accordingly need to continue the development of its policy planning staff. (b) Consideration should also be given to including a representative of the enforcement agencies on the NTPB. Enforcement is critical to successful urban transport regulation and traffic management and, at present, is a major problem area. Including the enforce- ment function at this level might provide the support and direc- tion needed to more fully integrate enforcement goals with transport goals. C. Urban Transport Plaiming and Programming 4.21 The planning of urban transport:ation investments and policies for specific urban areas is currently conducted by both MPWH and MOTC and their attached units./l This fragmentation in urban transportation planning has the potential for causing inconsistent, conflicting, or otherwise wasteful investments or programs. Furthermore, a-; indicated in paras. 2.12-2.22, there is a need for a much stronger urban transport planning effort. 4.22 The following institution strengthening proposals are recommended with regard to improving urban transport planning: (a) Given their current respective mandates MPWH and MOTC will need to share and coordinate assistance to local units of government in producing urban transport plans and programs. Vhile MOTC has the /I For example the recent Mletro Cebu Land Use and Transportation Study (MCLUTS) was conducted under MOTC auspices while the Davao City Land Use and Transportation Study (DCLUTS) was administered hy MPFWI. - 40 - prime responsibility in preparing multi-modal transport plans, MPWH has important responsibilities in road programming, design, construction, and maintenance. While MOTC could initiate the urban transportation planning process, MPWH would need to become heavily involved as the process moves towards funding and implementation. This sequential approach would likely prove to be awkward and could result in the implementation agency - in the most cases MPWH - questioning assistance rendered by MOTC. A more pragmatic approach would be to have both ministries jointly involved in the planning and programming exercise from the inception. (b) Joint MOTC and MPWH technical assistance teams may be the best way to provide comprehensive transport planning and assistance to local units of government. As a practical matter, MOTC may not (and probably should not attempt to) attract all the profes- sional talent necessary to develop comprehensive transport plans for Philippine urban areas especially in detailed road planning and traffic management planning. A more pragmatic solution may be to provide joint MOTC/MPWH technical assistance planning teams to assist urban areas under overall MOTC guidance. The existing Manila TEAM unit (attached to MPWH) might provide specialized traffic management input. The recent creation of the Urban Transportation Project Management Office (UTPMO) in the MOTC is an appropriate first step (See also 4.22(d) below). (c) Urban transport planning should gradually shift from the national to the local level. Urban area transport planning should be res- ponsive to unique urban area needs and eventually should be a local government function. The shift from national to local con- trol may be accomplished in several ways. One example is the MCLUTS experience where a speciality project team was assembled on-site with a significant component of locally recruited staff. The MCLUTS project serves as a training mechanism for the local staff which can ultimately be absorbed by local government and become operational in the given urban area. A second model is being applied by MOTC in Baguio where MOTC provides the project director and limited technical support with local staff performing much of the work. Again, the project is intended to leave behind a trained staff capable of transportation planning for the urban area. In both the MCLUTS and Baguio examples, local coordination and cooperation was achieved by using a steering committee. Because of the importance and complexity of Metro Manila and Metro Cebu, steps should be taken to institutionalize transportation planning in these areas with full time professional staffs in the near future. (d) The recent creation of a "Metro-Manila" urban transport group in MOTC to coordinate transport planning and operations is - 41 - endorsed. When MMC's role as an operational agency has become more clearly defined, a traffic planning and operations group should be established in MMC, possibly using staff from MOTC and MPWH as key staff for recruiting and training others. For the near term, however, it is suggested that the national agencies perform a role in Metro-Manila similar to their national roles (see also para. 4.27(b)). The recent creation of the Urban Transportation Project Management Office (UTPMO) in the MOTC should enhance inter-agency urban transportation coordination in the Metropolitan area. D. Infrastructure Design and Construction 4.23 The design and construction of urban transport infrastructure is currently concentrated in MPWH./1 Capabilities also exist in varying degrees at the local level in the city engineers' offices. Design of major projects in urban areas requires significant skills because of the complex right-of-way, utility, and interagency coordination problems. MPWH has recognized these special problems by assigning a design team to work specifically on projects for Metro-Manila. This team, called the Urban Roads Projects Office, has also been designated as the nucleus for a nationwide urban projects office. 4.24 Given these positive steps, it is recommended that the Urban Roads Projects Office should be strengthened tc provide urban road design assis- tance to all urban areas. A process similar to that noted for transport planning in MOTC should be used. A core-group within the Urban Roads Projects Office should be strengthened arLd trained first; this group should assist in training field office staff of MPWH and local city engineering offices, and the function should gradually devolve to the local level with monitoring and support from the national level core group. E. Traffic lIanagement 4.25 Since traffic management is an on-going activity, and is directly related to solving specific problems in given urban areas, the serving institution should be locally based. Un:zortunately, however, traffic engineering is a speciality skill that al: present is in short supply in the Philippines. The only in-country traffic management units are TEAM in Manila and MCLUTS in Cebu, neither of which is fully capable of operating without expatriate assistance. TEAM is currently attached to MPWH and MCLUTS is being funded and monitored by IIOTC with some assistance by NEDA. In essence, no permanent institutional structure exists at this time since both units are project entities, not operational agencies. Proposals have been /1 The only significant exception is the Light Rail Transit System being constructed under LRTA which is attached to MOTC. - 42 - made to operationalize TEAM for Metro-Manila by assigning it to IIMC. Consideration has also been given to using MCLUTS as the core for forming a Metro-Cebu traffic management authority./l On the surface, both proposals appear reasonable and should be considered as ultimate goals. 4.26 Two major concerns exist, however, for using the current Government proposals as a basis for institution building and staff development. First, since traffic management is important to all urban areas of the Philippines and technical resources are limited, it would be inefficient at this time to concentrate skills in single urban areas. Secondly, and of equal concern, the fact is that traffic management is highly operations oriented. Signs, signals and markings must be designed, installed and maintained. Minor roadway reconstruction and channelization must be completed quickly and coordinated with infrastructure improvements; i.e., traffic management must be "built into" new streets or when major reconstruction occurs. These two points argue for initial institution building and staff development to occur in the MPW4H as the national agency with the implementation capabilities and budgetary access to build and maintain roads. 4.27 The following institution strengthening proposals are recommended with regard to improving urban traffic management: (a) Consideration should be given to using TEAM as a national core group for traffic management. Emphasis should be placed on TEAM staff development and training as the national core group. TEAM staff members could then be assigned to given urban areas and MPWR district offices to train local staff as part of ongoing operations or projects. The ongoing work could be accomplished locally with the TEAM core group providing technical support. Since comprehensive urban transport plans should be developed in the larger urban areas, the TEAM group might work with MOTC in developing the traffic management aspects of the plan. (b) TEAM should not be transferred to the Metropolitan Manila Commission (MMC) at this time. While the logical institutional "home" for TEAM is the MMC, this move is not recommended at this time on three grounds: first, it would be difficult for TEAM to provide outreach technical assistance to other urban areas in the nation; second, TEAM would be institutionally separated from MPWH which is in the best position to assist in implementing TEAM proposals; and third, the MMC has not demonstrated sufficient financial and administrative "maturity" to assure a stable platform upon which TEAM might develop. In short, the idea is good but the timing is not. W4hen (or if) TEAM is /t During July 1983 a memorandum signed by the Ministers of PWJH and MOTC effectively transformed MCLUTS into the Metro Cebu Transportation and Traffic Engineering Office (MCTTEO). This same memorandum provided for joint NPWH and MOTC funding of MCTTEO along with a limited implementation mandate. - 43 -- incorporated into MMC, MPWH will need to develop another traffic management core unit, which might he attached to or become part of the Urban Roads Projects Office. (c) Some traffic management functions currently undertaken by police should he transferred to civilian hands as capabilities increase. Outside of Metro Manila a substantial proportion of traffic management activities, including traffic signal installation, operations and maintenance, as well as some street signing and marking, is handled by police. This arrangement is not satisfactory because: (a) police are not formally trained in this function; (b) the career track for police does not encourage specialization in this function; and (c) traffic management design functions should ideally be part of overall road design functions handled by one agency. Within urban areas alL traffic management functions should eventually be concentrai:ed in the city engineer's (or equivalent) office with the po:Lice retaining traffic direction and enforcement functions. F. Traffic Enforcement 4.28 The need for improved urban traffic enforcement in the Philippine urban areas is obvious and crucial, especially in the congested metropolitan areas of Manila and Cebu. The number of violations of general traffic laws, as well as ROT and BLT regulations, is very serious. The enforcement problem is essentially three-fold: (a) lack of clear institutional responsibility; (b) severe undermanning; and (c) widespread corruption. Several agencies are involved in traffic enforcement in the Philippines with overlapping functions, principally the CP/INP, CHPG, and BLT (paras. 4.13-4.14). It is particularly difficult to maintain coordination between these agencies and MOTC, MPWH, and local authorities. Staff resources in the CHPG and BLT are so restricted that it is difficult to assume that significant enforcement is possible. An equally serious problem is the reported corruption of the officers involved in day-to-day enforcement. The problem has reportedly become so prevalent that it has become "institutionalized" and appears to have become a way of increasing the low pay of many police officers./l /I For example, relatively fixed rates, such as P 1.50 per jeepney per route terminus, are reported to allow drivers to stop as long as they want to pick up passengers. where this is occurring, essentially no enforcement is provided. The extent of this institutionalized corruption problem cannot be verified in an overview study such as performed for this report. However, the obvious lack of enforcement at locations where police are present lends credibility to the findings. - 44 - 4.29 The highly fragmented ownership pattern of public transport operators adds to the problem of enforcing public transport regulations and traffic laws. Traffic violations are assessed against the driver and no direct penalties are assigned to the vehicle owners. In fact, the current pattern, whereby the driver pays the owner a minimum flat rate per day for use of the vehicle, encourages reckless driving, illegal stopping, and route cutting and alterations. Enforcement of BOT violations is similarly difficult because each individual owner must be contacted and prosecuted separately which can become a cumbersome process. 4.30 The consequences of non-enforcement are particularly critical as most physical traffic management measures -- such as traffic signals, street signing and marking -- are heavily dependent on enforcement to be fully successful. Since enforcement is critical to the success of traffic management and public transport regulation, it is imperative that the enforcement function be improved. The following suggestions are offered for consideration: (a) There must be an awareness that (i) there is a severe traffic enforcement problem in principal Philippine cities; (ii) if the enforcement problem is not resolved, additional unnecessary capital investments will be required; and (iii) the enforcement problem can and must be solved. In terms of payoff per peso of investment, improved traffic enforcement would probably have the highest short-term dividends -- even higher than improved traffic management or road maintenance -- in the major metro areas of Manila and Cebu. (b) Consolidation of the special force units assigned to traffic enforcement in Metro Manila should be considered. This has, in fact, already been tried through the application of "flying squads". These groups could be expanded substantially either by recruitment or transfer of selected PC/INP traffic bureau officers to the specialty group. While the parent ministry of the traffic enforcement group would have to be determined, the most important aspects of the process would be to (a) identify the specialty forces; (b) eliminate the group's overlap with other enforcement functions; and (c) establish effective monitoring and control procedures to minimize anomalies in the enforcement system. Based on positive results of the Manila experiment, the consolidation might be tried in other cities. (c) Consider shifting enforcement functions of BLT to CHPG. As indicated in para. 4.14, the BLT does not have sufficient staff to adequately enforce either BOT or its own regulations. Furthermore, BLT does not have the authority to enforce traffic violations and conversely the CHPG does not have authority to - 45 - enforce BOT/BLT regulations without deputization. It would appear that the best long-term solution would be to consolidate RLT enforcement functions in the CTIPG. This recommendation is under active review by the GoverTnment. (d) The utilization of owner-organizations as an enforcement technique should be considered. The current fragmented owner- ship pattern of public transport operators makes enforcement of regulations and traffic laws especially difficult. Establishing formal cooperatives or owner-organizations in cities (or sectors of larger cities) should be explored as a means of improving enforcement. Fines and penalties might be assessed against the associations for violations or improper performance of its members; the association in turn could discipline its membership according to its own rules. This approach would, in effect, shift much of the enforcement burden to the association. G. Road Maintenance 4.31 Technical and institutional matters regarding maintenance of roads have already been covered in paras. 2.25-2.29. A major identified weakness is the lack of well trained city staffs tc maintain local road systems. To rectify this problem, it is recommended that MiPWH increase operations and maintenance training of its regional office staff and that it also extend its training program to municipal and city engineers offices. H. Regulation of Public Transport 4.32 Perhaps the most complex set of urban transport issues are those which address the means by which public transport is regulated./1 Those regulatory issues addressed in this repor': are: (a) franchising (market entry and route regulation); and (b) fare setting. 4.33 Franchising. BOT's franchising responsibilities are carried out by means of a quasi-judicial process which requires that each proposed franchise change be considered at a public hearing, typically with full legal representation for each of the interested parties. All public hearings are conducted in Manila. Applications from outside Manila are processed by one of BOT s eleven regional offices (each staffed by only two or three people) and then forwarded with recommendations to BOT staff in Manila. Because of the time and effort required by the quasi-judicial process and the limited BOT staff size, BOT is unable to orocess in an expeditious manner the almost 100,000 applications it receives annually from /1 This review does not address regulation of inter-city service; see the Transport Sector Report (3916-PR). - 46 - tricyle, taxi, jeepney, school bus and tourist bus operators. Some applica- tions have been pending for almost five years. The process is also expen- sive, costing the applicant a minimum fee of e 100 per operating unit plus legal representation. Applications for franchise changes are opposed in about 50% of the cases by competing operators. The board has circumvented this tedious process to some extent by issuing provisional franchises pending a hearing. In practice these temporary franchises are often extended and the required hearing may never occur. Permanent franchises have been awarded for up to 25 years, but more recently shorter periods of up to five years have been the more common practice. Annual franchise fees are currently P 10 per ton for buses, P 20 for jeepneys and P 10 for tricycles and taxis. 4.34 BOT-s inability to process franchise requests expeditiously has led to a large number of on-the-street changes occurring without BOT approval. Two kinds of illegal (locally called "colorum") franchise activities are common: franchised public transport units operating outside their approved route structure (off-line colorums); and public transport units operating without any franchise at all (pure colorums). Of the estimated 37,000 jeepneys operating in metropolitan Manila, only 28,000 are franchised for such operations by BOT. The remainder are either franchised jeepneys from other areas operating illegally within Manila, or pure colorums operating without any franchise. Pure colorums can be distinguished from off-line colorums because the former lack a public utility number plate. Even such an easily identified characteristic is not sufficient to prevent illegal operation due to lax enforcement procedures./l 4.35 BOT has attempted to delegate franchising authority to regional offices, but has found that numerous abuses occurred. There is also a legal question of whether the authority of the BOT board can be delegated to the regional level. While current BOT administrators are very interested in the possibility of delegating authority in order to speed up the franchising process, they have not yet found a convenient administrative mechanism for accomplishing this goal./2 One favored proposal is to eliminate the quasi-judicial process entirely and replace it with a strictly administra- tive function, though concerns exist about ensuring adequate opportunity for existing operators to express their views on proposed changes. The current situation is clearly out of hand, and a moratorium imposed in 1979 on new franchises is leading to more and more colorum operations. /1 A further issue complicating the enforcement problem is the extensive use of fake license plates. /2 Pilot testing of delegation to local governmental units is occurring under the MCLUTS operation in Cebu. - 47 - 4.36 Another franchising related problem facing BOT is the so-called "kabit" system under which franchise holders lease their franchises to other individuals who then operate services. This kind of lease arrangement can be carried out legally if BOT approval is obtained. The problem is that most such arrangements do not have BOT approval. In these cases the link between BOT and the actual operator becomes tenuous or nonexistent; the result is a lack of BOT supervision, loss of tax revenues and often inadequate operator insurance. BOT estimates that some 50% of' all public utility vehicles are operating illegally under "kabit" arrangements. 4.37 The BOT has developed the following procedures for dealing with the "kabit" problem: (a) for a two month period, it allows the franchise holder to come to BOT and formalize the "kabit" arrangement without penalty; (b) after a two month period, it al:Lows the actual operator to come forward with the incentive that he will be awarded the franchise in return for meeting BOT requirements; and (c) it is improving enforcement by increasing checks in conjunction with BLT vehicle registration requirements. 4.38 Fares. The BOT approves a uniform fare structure (with a few minor variations) for each type of public transport vehicle for the entire country. Compared to entry and route controls, the fare structures estab- lished by BOT appear to be better respected. Fare increases have been made regularly to reflect price inflation (particularly for fuel), apparently without any significant public protest. Nevertheless, individual operators frequently cut routes and sometimes charge less than the regulated rate. This indicates the need for greater flexibility in setting fare rates; a greater measure of regional/local autonomy in rate setting also appears appropriate. 4.39 Public Transit Regulation Reconmendations. The relatively good service provided by urban public transport, combined with the near collapse of the regulatory system, suggests the need for a fundamental restructuring of the regulatory function to make it a Fositive force for improving service. Described briefly below are the principal recommendations offered for Government consideration: (a) The regulation of intra-urban public transport should be decen- tralized. The administration of thousands of applications in Manila by authorities who cannot be fully aware of local conditions is bound to be less than satisfactory. Furthermore, assuming reasonable regulatory competence can be achieved at the local level, there is very litt:le justification for central Government involvement since intra-urban public transport does not - 48 - involve service to as many local governmental units as does inter-city bus service. The MOTC in cooperation with BOT should develop a plan for decentralization along with a reasonable timetable. A first step might be to establish regulatory guidelines along with monitoring procedures. Decentralization might first be accomplished in regional offices and in larger cities (say over 100,000 persons)./l Alternatively, decentrali- zation could be accomplished stepwise by travel mode. A recent study recommendation to decentralize tricycle regulation to local units of government has particular merit./2 (b) There should be a careful but sustained trend toward easing of regulatory restrictions on urban public transport operations. Beyond the lack of capability to enforce current public transport regulations, there is considerable doubt if the current regulatory framework, which touches on virtually all aspects of operation, is appropriate. Clearly there is a case for maintaining regulatory controls to assure that drivers are qualified and that vehicles are safe. Thus complete deregulation of public transport services is not a viable option. The issue is one of degree rather than elimination of regulatory controls. However, there does not appear to be a strong case for maintaining the current considerable regu- latory controls on market entry and route assignments (with the exception of a few heavily congested corridors in Metro Manila and Metro Cebu). Based on the observed high level-of-service offered to urban residents - in some cases by illegal operators - it does not appear that unrestricted entry would result in "ruinous competition" in urban areas. Furthermore, a liberal entry policy is probably the best means to hold fares down which has major impli- cations for the low income group (para. 3.24). There is little evidence to support the contention that significant portions of urbanized areas are underserved. Even if they were, liberal market entry, routing and fare policies would probably be the best way to assure service to underserved areas. Perhaps the best way to move toward the objective of easing regulatory restrictions is to test the process in a few pilot cities. Recent study recom- mendations urging differing levels of regulation by travel mode /1 This approach is being tested in the Metro Cebu area where the Metro Cebu Transportation and Traffic Engineering Office (MCTTEO) has been given selected regulatory powers subject to the review and approval of the regional office of BOT (See Annex D). /2 Metro Manila Urban Transport Strategy Planning Project - Part A, Final Report, DCCD Corporation and Pak-Poy Kneebone Pty, Ltd., April 1983. - 49 - (train, bus, jeepney, taxi, tricyle) and the complete deregulation of truck routes and rates appear to be steps in the right direction./l (c) Highest regulatory priorities should be on driver competence and vehicle safety. There is a clear need to strengthen existing regulatory and enforcement mechanisms to improve both the safety and congestion-causing operations of public transport operators. Tightening driver licensing requirements of jeepney operators, regular inspection of public transport vehicles and stricter enforcement of traffic violations, especially those that cause traffic congestion and affect the safety of passen- gers and pedestrians, should be priority measures. This will require strengthening the appropriate organizations. (d) Consider shifting BOT intra-urban administrative functions to BLT and BOT planning functions to the staff of MOTC. Predicated on steps to delegalize, decentralize, and partially deregulate the public transport regulatory process, the BOT could concen- trate more on monitoring and coordinating local regulations of intra-urban transport and in setting regulatory guidelines. The regulatory functions at the central Government level would become more administrative in nature and could be shifted to the BLT. This might facilitate coordination such as issuing vehicle registration and licenses in conjunction with issuance of franchises. I. Staff Development and Training 4.40 Much needs to be accomplished to develop and train national and local-level staffs to handle the emerging urban transport problem. With the exception of key central office staff and top management, the technical staff in both the MOTC and MPWH is inadequate in both numbers and manage- ment. The problem is, of course, even move serious at the local govern- mental level. A major problem in developing and retaining staff is the low salary structure. As this is a problem affecting all sectors, the salary structure of technical and professional staff in Government as a whole needs to be reviewed. The recent intiatives of the MPWH to increase salaries by decreasing redundant or non-essential staffs appears to be a step in the right direction. The possibility of designating critical skills positions with concomitant targeted higher salary levels might be another means by which key talent can be attracted and maintained in this key sector. /1 Metro Manila Urban Transport Strategy Planning Project - Part A, Final Report, DCCD Corporation and Pak-Poy Kneebone Pty, Ltd., April 1983. - 50 - 4.41 Urban transport training programs currently conducted through universities, on-the-job actions, and the Transportation Training Center (TTC) are not adequate to meet the needs of the urban transport sector of the Philippines./l Significant deficiencies exist in the areas of transport planning, traffic management, traffic enforcement, and road maintenance. Since staff development and training are extremely important, each major urban transport program, project, or institutional change should be taken with a view toward increasing staff capability. 4.42 The following specific recommendations are offered with regard to improving urban transport training in the Philippines: (a) Both MOTC and MPH should set up formal urban transport training programs. Specific goals and action plans should be developed; senior staff should be assigned to this effort. (b) The role of TTC needs to be more completely defined and placed into perspective with overall national training needs. TTC's ties with, and responsibility to, MOTC may require further study as part of a training development program. (c) Training emphasis needs to be at the professional level. Key local staff need to be brought to the full "transport planner" and "traffic engineer" level. It is hoped that by developing MOTC and MPWH core groups, increasing their technical skills, and then using them to help train others through projects will provide a mechanism for the needed staff development. (d) Training should be considered in conjunction with staff attrac- tion and retention policies. Unless the salary structure of trained technical staff is substantially increased, the turnover in the described core groups will continue to be excessively high. This problem is so serious that it requires concerted governmental attention. Primary emphasis should be placed on salaries of critical professional positions. Corres- ponding efforts should be made to keep non-essential technical and clerical positions to a minimum. (e) Government training programs should consider the potential benefits of a stronger local consultant industry. It is recognized that there will be continual staff turnover due in part to limited salaries paid by Government. While many trained staff will be "lost" to Government, it can be reasonably assumed that many will go to the local consulting industry and thus continue to be available for service to Government. /_ See Annex F for a further description of the TTC. - 51 -. 5. EXTERNALITIES 5.01 The urban transport sector is highly related to other sectors affecting the Philippine economy. Three of these related sectors are analyzed in this chapter due to their emerging importance: (a) energy; (b) motor vehicle manufacturing; and (c) the environment. A. Energy 5.02 The impact of urban transport on fuel consumption is an important factor in the Philippine economy. The Philippines is forced to import almost 90% of its petroleum, and petroleum sources provide about 85% of the total annual energy consumption of around 100 million metric barrels./1! The transport sector in 1981 accounted for approximately 35% of total energy consumption, having declined gradually from 44% in 1973. Since the energy consumed by the transport sector is all petroleum based, transport accounts for 41% of all the petroleum based energy consumed by the Philippines. 5.03 To date the primary strategy adopted to restrain the use of fuels for transport has been the imposition of differential taxes targeted at various petroleum products. For example Ln 1981 the tax surcharge on regu- lar gasoline was P 2.90 per liter as opposed to only P 0.84 per liter for diesel fuel (Table 5.1). These taxes have been successful in reducing the consumption of gasoline and in encouraging the consumption of diesel fuel as a substitute. Since 1975 the consumption of premium and regular gasoline has fallen from 16.2 million barrels to 11.2 million barrels in 1980, while during the same period the consumption of diesel fuel increased from 13.2 to 17.4 million barrels (Table 5.2). While the Philippines Government intended to effect a shift in fuel use from gasoline to diesel, the actual results were more dramatic than had been expected and the growing demand for diesel fuel eventually became a problem. Consequently, in mid-1981 serious consideration was being given to increasing the taxes and duties on diesel fuel to bring them closer to those levied on gasoline. 5.04 Based on the proven consumer response to the tax/price mechanism, the continuation (and perhaps escalation) of current taxes appears to he the best short-term way of keeping consumption of petroleum-based fuels at acceptable levels. The problem with employing only this strategy is that it results in higher transport costs to the users and consequently in reduced mobility. A preferred approach w7ould be to find complementary strategies to reduce fuel consumption. /1 Estimate based on projections from the Five-Year Philippine Development Plan, 1978-1982. - 52 - 5.05 Three additional major options exist for reducing fuel consumption; they are: (a) a shift to more fuel-efficient vehicles; (b) improved traffic management to reduce congestion; and (c) a shift of travelers from low occupancy to high-occupancy modes. Among these three alternative options it is likely that the highest potential for fuel saving lies with the first; fuel savings of 10-20% (with little or no mobility loss) are considered likely during the next decade as more fuel-efficient automobiles account for increasing proportions of the vehicle fleet. Improved fuel efficiency of jeepneys should also be possible through introduction of improved and better- maintained engines and lighter-weight bodies. The next most promising strategy is improved traffic management to reduce congestion; and these savings would be accompanied by mobility improvements. The least promising strategy would be shifting passengers to high-occupancy vehicles. Even extensive shifts of travellers from jeepneys to buses in Metro Manila would have a marginal impact on total national transport fuel consumption (probably less than a 2% reduction) and only then at the cost of mobility losses. 5.06 In summary, it is recommended that the best approach for conserving fuel consumption in urban transport is to combine (a) continued stiff taxes and duties on petroleum-based fuels; (b) regulations or taxes to accelerate the adoption of fuel-efficient vehicles; and (c) improved traffic management to reduce congestion in Metro-Manila and Metro-Cebu. Fuel taxes should be maintained at least at current levels (in proportion to the total cost to the consumer) to minimize wasteful travel. Under the program for SAL II, a petroleum pricing study is already underway and is expected to be completed by September 1983. This study is likely to recommend a pricing policy for the next few years, including the desirable level of taxes on various products. As a follow-up of this study, it would be desirable to investi- gate issues more directly related to the transport sector including the practicality of taxing the use of inefficient low occupancy vehicles. Prime targets for high annual taxes would be those automobiles and trucks which have poor fuel efficiency characteristics. (See also para. 5.10 for a discussion of regulating these vehicles from a congestion reduction perspective.) B. Motor Vehicle Manufacturing 5.07 The Government is pursuing a policy of developing a local motor vehicle manufacturing industry to create jobs and improve balance of trade; however, it has no stated policy regarding the impact of increased vehicle ownership and usage on traffic congestion. In 1973 the Progressive Car Manufacturing Program (PCMP) was instituted, following previous policies of importation of completely built up units (CBU) up to 1950, and completely knocked down (CKD) components from 1951 through 1972. There are five PCMP approved car assemblers which from the end of 1981 have the only rights of local car assembly. In 1977 these industries employed over 8,000 workers. However, rapidly increasing fuel costs (especially in 1979-80), a continuing domestic recession, and high interest rates have contributed to temporarily restrain sales. - 53 -- 5.08 In addition to the Car Manufacturing Program, a Progressive Motorcycle Manufacturing Program (PMMP) was started in 1974 and a Progressive Truck Manufacturing Program (PMPW) in 1977. The motorcycle program appears to be performing the best of the three, which reflects the buoyant nature of the market for motorcycles and tricycles in recent years. Approximately 75% of all new motorcycle sa:Les are attributed to the sidecar market for use as tricycles, whether for private use or public hire. Some 11 models are produced based upon imported engines from Japan, and approximately 1,400 skilled or semi-skilled workers are employed directly in the Metro Manila and Cebu areas. In addition an estimated 13,000 more people are employed in the associated component industries, manufacture and repair shops. 5.09 A very important activity in terns of employment is jeepney manu- facturing. Working with imported engines and chassis the local manufactur- ers construct tailor-made finished products typically seating 12-15 passengers. There are a few large manufacturers in Manila, and countless small operations in other major cities. 5.10 In view of emerging market trends and urban traffic conditions, it is recommended that: the principle of restraining rapid growth in automobile ownership and usage through higher taxes and fees should supercede encouraging the development of an automobile assembly industry for domestic consumption./1 The emerging road congestion problem and the associated high infrastructure cost to alleviate the problem argue strongly in favor of national policies (principally taxation) to hold down car ownership and car usage. While taxes on I:he initial purchase of a locally assembled private automobile are significant, typically amounting to 25% of the total purchase cost, even higher taxes and fees, amounting to 100% of purchases price are not uncommon./2 Furt2aermore, annual vehicle registration fees amount to only about P .500 (or less than 1% of the purchase cost) /3 and could be raised substantially on cars to discourage the use of this inefficient form of transport. C. The Environment 5.11 Motorized transport is a major contributor to air and noise pollution levels in many cities of the world. Considerable effort and /1 This recommendation is consistent with the preliminary findings of a Government sponsored study of the metal working industry which found the automobile assembly industry to be an inefficient alternative to direct import of automobiles. /2 During October 1982 Government reduced taxes on locally assembled vehicles presumably to spur the depressed local industry. /3 Source: MMUTIP Estimate of Vehicle Operating Costs, June 1981. - 54 - resources have been devoted to the measurement of these impacts and to strategies to reduce them, with the greatest attention devoted to mandating vehicle design modifications. Substantial improvements, particularly in air quality, have resulted from these efforts, though many cities are still considered to have unacceptably high levels of air pollution. 5.12 Attention to environmental considerations in the Philippines appears to be much less significant than in developed countries. Vehicle emissions by individual vehicles like jeepneys, large buses, and trucks are subject to relatively little monitoring, much less any kind of effective control. Although a start has reportedly been made on the measurement of air quality in Manila, no systematic data has yet been obtained which would provide a basis for quantitative comparisons with other cities or assess- ment of the degree of adverse impact on urban residents. 5.13 Although environmental considerations do not yet appear to be accepted as a major urban transport policy issue in the Philippines, these considerations are likely to become more important in the future. Visual inspection suggests that the problem is already serious along congested urban streets. Experience from developed countries suggests that the most effective strategy for dealing with the environmental impacts of transport use is to mandate and enforce vehicle design improvements./1 The technology for these improvements is already well developed and presumably could be adapted relatively easily to vehicles and conditions in the Philippines./2 These measures would constitute the primary attack on environmental impacts along with complementary strategies including traffic management to improve vehicle flow. 5.14 Initiation of a systematic ongoing air and noise pollution monitoring program is recommended in Metropolitan Manila. Depending upon the findings, additional monitoring programs could be initiated in principal secondary cities. Based on an analysis of air and noise pollution, a strategy for coping with the problem should be devised including (a) the establishment and enforcement of vehicle emission standards; and (b) the enforcement of existing noise muffling laws on motor vehicles. /1 Another possibility, which might be explored in the Philippines, would be policies encouraging use of cleaner burning LPG in favor of diesel fuel. Price and technological factors appear to be making this potential substitution more attractive. /2 An exception might be the jeepney industry where rebuilt engines are frequently used. Setting higher standards might adversely affect the competitive position of the more marginal manufacturers. IBRD 17234 116e CLASSIFICATIONOF PROVINCES liO 124- JUNE 1983 BYGEOGRAPHICAL REGIONS NCR NATIONAL CAPITAL REGION ILOCOS V9 WESTERN VISAYAS liocosNorce 38 Aktan PHILIPPINES 2 Abra 39 Capiz P 3 lOcoGsSur 40 Antique 20- 4 Mountain 41 Iloilo La Union 42 Negros Occidental o Benquet VI[ CENTRAL VISAYAS ± Airport 7PB asnane t3 CGebu Roods 7 Pargasinan 44 Negros Oriental o CAGAYAN VALLEY 45 Bohol 8 Btanes 46 Siquijor Q ----c Railways 9 Cagayan Vitt EASTERN VISAYAS .7 12 Kalin9a-Aoayao 47 Northern Samrna - --1-- Provincial Boundaries 11 Isabela 48 Samar r ^2 IfugaO . 49 Eastern Sam.r Regonol Boundaries i3 Nueaa Viscaya 50 Leyte 14 Quirino 51 Southern Leyte LOag '- lnternotronal Boundaries III CENTRAL LUZON IX WESTERN MINDANAO 15 Nueva Ecija 52 Zamboangadel Norte Oingras 1e Tarlac 53 2amboanga del Sur !\2 1 -- 71 Zarnbales 54 Basilan 18 Pampanga 55 Sulu 19 aulucan 56 Tawitawi n10t 20 Bataan X NORTHERN MINDANAO - i igon I IV SOUTHERN TAGALOG 57 Surigaoidel No Fe San | 1 / 27 Aurora LOG Camigi9nr ernando 1 :', 2Ouezon 595 Agusan del Nerte 23 Rizan 61( MisamisOciental ogwo 0 50 100 150 200 250 300 23 Caitae 61 Misamin Occidental KILOMETERS l6 2 Laguna . 632Agusan de S 7 i 5 0 50 100 150 200 26 Batangas 63 Agusan del Sur ii 6 2 Marinduque Xi EASTERN MINDANAO | San 21( 20 Mindoc Oriental 64 Surigao del Sur e /alu 29 Mindoro Ocidental 65 Davau Oriental Ts - /abobcIauon 30 Romblon 65 Bavun geld 6 i9 - 31 Palewan 67 DavaodelSur -7 '17 V aICOL 68 South Cotabaot _2Kr 'o 22 22~ >~) 32 Camarin Noce C ENTRAL MINDANAO j M I, A P H L/P PI NI1 _ 33 CamneineS Sur 9 Lanao cel Norte 32 Catanduanes 70 LanaodelSur 35 Albay or N Coeuba 14 o Pc 36 Sorsogon ~ 72 Msaguindanao 373Sorseyon - Sultan Ked3art fs K 33 .7 37 lesSate /4 J~~~ ~ 23 SU;/ SA ''' 6 2r sourH C '' N A6 1 "7 1 ~~~~~~Allen '>l2tNAm r,,zuX0EA 30' rPiliE5 - -* ,7) 5EA , ~ < 149 / tA{A~~~~ ~ Pou1 4iA _ / '/LBf ctbA a 44~~~~~~~~~~i4 £1 A- -'± ~~~~~~~~~~~~~~cooy CEINAI l 7.;f 91St NAte D U/N p eCs 4 C ~~n-~~ B. t t t3r20lNn 18 j ,LA . - /2)932~~~~ELR-S SrA BRUNEI 7 - 120- 124- 128