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PHYSICAL INFRASTRUCTURE Moderators: Prof PHYSICAL INFRASTRUCTURE Moderators: Prof. Hussein Lidasan USAID COMPETE 28 November 2016 The goal of the New Industrial Policy is to create globally competitive, value adding, and innovative industries that would generate more and productive jobs and reduce poverty towards shared prosperity for all. Chemicals IT BPM Aerospace Automotive parts Electronics Shipbuilding Garments agribusiness Furniture Breakout Session Goal • For each area, identify the most binding constraints preventing industry growth and recommend policy measures to resolve these constraints that would produce the biggest bang & lead to highly significant improvement in the overall business and investment environment • Competitiveness and innovation • Labor & HRD • Physical infrastructure • Ease of doing business • MSME Development & inclusive business • Incentives & other forms of government support • International Trade & FTAs Inclusive Smart Mobility Transportation Vision Provision of Mass Improved LOS Transit System Accessibility Inclusive Economic Development Growth TRANSPORT Improved Strategies & INTERVENTIONS Low Carbon Society POLICIES Quality of Life Principles Employment Generation Seamless Movement of People & Commodities Sub-regional Transport Funding Constraints Infrastructure Developments Cooperation Inconsistent Approaches Travel Demand Lack of Understanding Management City Logistics Legal Impediments Economic Measures (Road Pricing) Seamless Resilient Intermodal Low Logistics Carbon Network Transport System System & Transport Planning Policy Framework Process Facilities Enhanced Illustration based on Dr. Cal’s Diagram . Imposition of clear cut policy prioritization criteria in developing projects & programs . Encourage/promote private involvement through PPP . ODA consistent/in line with government infrastructure development Current State of Infrastructure Introduction • The industry roadmaps indicated that the most common horizontal constraints were in the areas of: • INFRASTRUCTURE AND LOGISTICS, particularly the high cost domestic shipping and power • GOVERNANCE AND REGULATION, specifically smuggling, bureaucracy, red tape, and the lack of streamlining and automation of interrelated government procedures. Current State Global Competitiveness Report – Overall Infrastructure Ranking 2016 – 2017 edition QUALITY OF QUALITY OF INTERNET OVER-ALL ROADS RAILROADS SEAPORTS AIRPORTS ELECTRICITY BANDWITH INFRASTRUCTURE SUPPLY SINGAPORE 2 2 5 2 1 2 4 MALAYSIA 19 20 15 17 20 39 75 THAILAND 72 60 77 65 42 61 53 LAO PDR 81 91 NA 132 100 77 97 INDONESIA 80 75 39 75 62 89 112 VIETNAM 85 89 52 77 86 85 85 CAMBODIA 95 93 98 76 99 106 94 PH (2016) 112 106 89 113 116 94 72 PH (2015) 106 97 84 103 98 89 76 MYANMAR NA NA NA NA NA NA NA BRUNEI 67 41 NA 87 84 52 54 The Philippines stays at the 57th rank out of 138 countries in the 2016-2017 Report. Current State WB Logistics Performance Index (LPI) – Overall Ranking COUNTRY 2012 2014 2016 SINGAPORE 1 5 5 MALAYSIA 29 25 32 THAILAND 38 35 45 PHILIPPINES 52 57 71 VIETNAM 53 48 64 INDONESIA 59 53 63 CAMBODIA 101 83 73 LAO PDR 109 131 152 MYANMAR 129 145 113 BRUNEI NA NA 70 2016 Edition of the LPI covered 160 countries. Source: World Bank LPI Issues and Challenges Issues and Challenges Low paved ratio for local roads, increasing number of trucks PAVED RATIO (Local Roads) Provincial 35% Condition of Philippine Road Network: Municipal 35% As of December 31, 2015 City 61% • THERE ARE MORE THAN 400,000 REGISTERED TRUCKS; 7% ANNUAL GROWTH • TRUCK TRIPS PER DAY IN METRO MANILA AND ENVIRONS -2010: 642,714 (actual) -2020: 872,329 (est) -2030: 1,069,841 (est) National, Provincial and City Road Inventory as of 2015 Municipal and Barangay Road Inventory as of 1999 SOURCE: DPWH Issues and Challenges Most airports are operating beyond capacity; CLARK underutilized Airport Passenger Volumes and Capacity Maximum Passenger Passenger Volume Airport Capacity Utilization Capacity (2014) NAIA 35,000,000 34,198,982 97.7% MCIA 4,500,000 6,839,349 152.0% Davao 2,000,000 3,452,479 172.6% Kalibo 700,000 2,321,162 331.6% Iloilo 1,600,000 1,677,632 104.9% Laguindingan 1,600,000 1,553,346 97.1% Puerto Princesa 350,000 1,378,580 393.9% Bacolod-Silay 800,000 1,317,841 164.7% Clark 5,000,000 877,757 17.6% Caticlan 500,000 507,621 101.5% Source: DOTr, CAAP Issues and Challenges Most cargoes are handled in the Port of Manila; Batangas and Subic Ports are underutilized. DESPITE THE MANILA PORT CONGESTION IN 2014, • Cargo traffic at Subic Port has gone up ifrom 6% of capcity to only 20% • Cargo traffic at the Port of Batangas has gone from 3% to only 27% CARGO TRAFFICE IN OTHER GATEWAYS (Cebu and Mindanao Container Port) ARE NEARING PORT CAPACITY Issues and Challenges Cost, regulatory quality, infrastructure gaps and cybersecurity measures are major constraints in the penetration rate and use of IT WEF Global Information Technology Report 2016 PHILIPPINES SINGAPORE MALAYSIA INDONESIA VIETNAM Mobile network coverage 99.00 100 95.4 100 70 (% of population) International Internet 27.7 616.5 27.2 6.2 20.7 bandwidth (kb/s per user) ICT use for business to business 4.8 5.8 5.7 4.9 4.9 transactions (high = 7) Business to consumer Internet 4.8 5.5 5.9 5.4 4.8 use (high = 7) Prepaid mobile cellular tariffs 0.40 0.19 0.09 0.19 0.15 (PPP $/min) Fixed broadband Internet 54.59 46.31 42.47 27.92 2.59 tariffs (PPP $/month) Issues and Challenges Security and reliability of supply remains to be the primary concern in the energy sector Comparison of Energy Statistics among ASEAN-5 Countries PHILIPPINES SINGAPORE MALAYSIA INDONESIA VIETNAM Electricity production, 771.4 8,883.5 2,456.7 858 1,416 kwh/capita Quality of electricity 4.0 6.8 5.8 4.2 4.4 supply Source: World Economic Forum (2016), Global Competitiveness Report and Global Information Technology Report Recommendations Recommendations 1. On Infrastructure Development AIRPORTS • Expand/modernize priority airports (international gateways and secondary airports) in support of air cargo logistics and tourism • Install navigational equipment in secondary airports (night-rated) to decongest NAIA SEAPORTS • Modernize select domestic ports that will serve as regional “hubs” • Expand/modernize international gateway ports • Develop new RORO ports/facilities • Develop cruise berthing facilities in support of tourism RAIL: Implement freight-commuter rail projects (MRS, North-South Rail, etc.) TELECOMMUNICATIONS: Promote additional investments in telecommunications facilities ENERGY: Pursue the establishment of power generation facilities to increase supply Recommendations 2. On Program Implementation ROADS • Expand the coverage of DPWH-DOT TRIP (Tourism Road Infrastructure Program) Convergence • Implement DTI-DPWH ROLL IT (Road Logistics Linkages for Investment and Trade) Convergence Program LOGISTICS CORRIDORS • Establish logistics corridors (Subic-Clark-Batangas, South-Central Mindanao Logistics Corridor) PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS • Implement approved PPP projects ASEAN RORO INITIATIVE • Establish the Davao-General Santos-Bitung and Palawan-Sabah RORO routes Recommendations 3. On Policy Formulation/Implementation • Issue a National Transport Policy • Issue a Dual Airport Policy (NAIA-Clark) • Amend the Public Service Act to liberalize infrastructure investments • Enact the PPP Law • Enact the Omnibus Maritime Code • Amend the Charters of PPA and CAAP (separate the regulatory and development functions) • Promote aggregation of distribution utilities to lower costs of power • Finalize and implement the National Broadband Roadmap 4. On Regulatory Reform • Implement age limits on ships and trucks • Implement anti-overloading policy • Improve regulatory quality for the energy sector • Improve cybersecurity regulations and measures THANK YOU. -END-.
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