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World Bank Document Report No. 1017a-PH Transport Planning in the Philippines FILE COPY Public Disclosure Authorized May 4, 1976 Transportation Division East Asia and Pacific Region FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS US$1.00 = P 7 (June 1975) The Peso was devalued to US$1.00 = 7.6 in July 1975 but the old con- version was used in this report as the Investment Program was prepared when this rate was in effect. The estimated peso costs in the Program will probably rise following the devaluation. ABBREVIATIONS AND ACRONYMS ADB - Asian Development Bank BOT - Board of Transporb BPH - Bureau of Public Highways CAA - Civil Aviation Administration CAB - Civil'Aeronautic Board DBCC - Development Budget Coordinating Committee DOT - Proposed Department of Transport DPH - Department of Public Highways DPWH - Proposed Department of Public Works and Highways DPWTC - Department of Public Works, Transport and Communications FRG - Federal Republic of Germany HSF - Highway Special Fund MARINA - Maritime Industry Authority IvrrC - Metropolitan Transit Commission NEDA - National Economic and Development Authority OSCOPA - Office of the Special Commissioner on Port Administration PDPA - Provincial Development Assistance Program PNR - Philippine National Railways PPA - Philippine Ports Authority PPDO - Planning and Project Development Office PTS - Philippine Transport Survey of 1969-70 RDC - Regional Development Councils FOR OFFICIAL USE ONLY FOREWORD This report was based on the findings of the Bank's Trans- port Planning Mission which visited the Philippines in June 1975. The mission was composed of: Sei-Young Park Chief of Mission Inai Bradfield Transport Economist Alain F. Ballereau Land Transport Expert Peter Bowden Planning Expert Jack McCunniff Marine Transport Expert Yu-Li Sun Research Assistant The report was written by Mr. Park and Mrs. Bradfield. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwisp he dis,oeI-d without World Bank authoriation. TRANSPORT PLANNING IN THE PHILIPPINES TABLE OF ONTENMTS Page No. QI1MMAW~ AW 1DVflP ) M'U%MArPT"JQ 'JItt%. L.LJa. .'L . i-v f'UADMPD TT DTYO't1TP TTVTnVr MjW.rP-, V SLMAl.j L .LL LLLA%JL'.L J .v"LLVAfL...'... aJ.. * ... .*.... *. .*.. C CuT A DE'D TTT qntA mQNSDrT TW'1CVES PPuGDDflfTA IN POLICY AND PLANNING . ......... .. ........ 8 A. Outline of the Transport T_- &.L Cn7 1( 7A o UIVestdmletL rraUml-d1ul ±7 fU-7 ............. u B. Transportolicyaannin..gn d .. .9 I.. InvestmenbStrategies .10 II. Operational Strategies ... 14 C. Proposed Technical Assistance for Planning . ......... 15 CHAPTER IV PROGRAM, PLANNING AND OPERATION OF TRANSPru± MODES ..... ............. ............ 16 A. Highways and Road Transport . 16 B. Railways: The Philippine National Railways ... 27 C. Ports and Shipping . .31 D. Airports and Civil Aviation . 34 E. Urban Transport ...... ...... 35 CHAPTER V TRANSPORT ORGANIZATION: PLANNNING AND COORDINATION.. 4o ANNEX.A Descriptive Information on Transport Sector ANNEX B Presidential Decrees and Transport Policy Directives TABLES 1-8 MAP IBRD-11794 SU-ITAR17 AN-D REuCOMW-kLATIlONS i. Developments in the transport sector during the past decade have been encouraging. There was a considerable expansion of trans- port facilities based on improved planning and administration. In terms of target achievement of public infrastructure investment during this period, the transport sector, particularly highways, led all other economic sectors, such as agriculture, power, and industry. There were also some improvements in operational efficiency in various transport modes, such as highways and railways. Moreover, the organization for transport administration and planning was strengthened by the creation of the Inter-Agency Technical Committee for Transport Planning in the National Economic and Development Authority and the Planning and Project Development Office in the Department of Public Works, Transport and Com- munications, the Maritime Industry Authority, and the establishment of the Philippine Port Authority. ii. While these achievements are noteworthy and commendable, much still remains to be done. The mission identified many areas in the planning practices and organizations where improvements are required. The main purpose of this report is to bring out clearly these problem areas and make suggestions for improvements. The mission's review of the proposed investment program for 1976-79 revealed that part of the program was not supported by investigation of traffic demand and by economic analysis. In this regard, there is an insufficient rationale for the program as a whole. The investment program is in need of major revisions. iii. In view of the above, the mission recommends a technical as- sistance program for the preparation of a national transportation system study and an investment program for 1977-80, and for providing resident advisory services to various transport agencies. (For details, see Chapter III, Section C). The mission also recommends that a Department of Transport (DOT) should be created to coordinate the operational and investment planning activities of individual transport agencies (see Chapter V). iv. This report also includes other detailed recommendations and suggestions for the improvement of transport operation and investment programming under the headings for individual transport modes. The underlying theme of the discussions leading to these recommendations is that efficiency in transport activities can best be achieved by creating an environment which is conducive to free and effective com- petition among transport modes and individual transport operators. A hiMh degree of r(nvPrnment regulation bevond the limits of nrofitable competition, and attempts to "allocate" traffic among modes through inequitahbl rtae1i1,atnrv and -nrinin l onenliiq_ iq nsnallv proven to be counterproductive. This is so because, in the final analysis, the user himqelf' ia +.ha hpat. iiidia nf hiq npepd. annd thP.rPfnro ashnildl ho lpft. tn choose the transport service which serves his purpose best. This will give correct signals for demand fonr transor+ services and aid in achieving a rational allocation of resources. - ii - v. The Government's transport investment program for 1976579 is composed of (1) a number of large projects which were identified by the Philippine Transport Survey (PTS) carried out in 1969-70 and which are being financed or under consideration for outside assistance, and (2) a large number of small projects for local financing. While the projects for outside financing are supported by feasibility stu- dies, those for local financing require more careful programming. Moreover, many hlgh priority projects identified by the PTS are al- ready under execution; the remaining projects in the PTS list are those considered to be of relatively low priority at the time of the Survey. Also, because the priorities determired five years ago may not be re- levant today, it is necessary to update the investment needs to reflect the current situation. The Government recognizes this need and has taken positive steps to revise the investment program. vi. Because investment programs must be reviewed on a frequent, periodic basis, an occasional transport survey cannot substitute for continuous review by the Government's own planners. There is thus an urgent need to strengthen the Government's own planning capacity. The core personnel for planning can be recruited from the Department of Public Works, Transport and Gommunications (DPWTC) to establish a full- fledged technical agency for transport planning and become the tech- nical arm of the DOT. The existing Inter-Agency Technical Gommittee for Transport Planning under the National Economic and Development Au- thority (NEDA) may continue to function as a forum for exchange of views and ideas by various Government agencies and transport interests to sup- port the planning efforts of the DOT. Moreover, there is also a need to build up the planning capacity of the transport operating agencies such as the Department of Public Highways (DPH), the Philippine Port Authority (PPA), and the Maritime Industry Authority (I$ARINA); for in order for the central planning by the DOT to be effective and relevant, it is essential that the planning capability of the line agencies must be improved. vii. The Philippines obviously needs a large amount of further capital investments in transport. However, trar,sport efficiency is realized not by oll.al investment alone. It also reauires an improve- ment of operation of the existing facilities. It is therefore important that, before investment projects are considered, it should be ascertained that the existing facilities are operated in an optimal fashion; opera- tAinal imp-rrove3ents crn reoduce investtment renuirenments. Moresver; an efficient operation is a :ondition for realizing the full potential of new invest.nents i'nriinting nrelicies and mneasures to nslurp effiGipnt opoerntior of transpoQ-t is an important function of the DOT as well as thP ot rav tiin ' avpn c s- W-.hil ompnnet.ition is the nrim8rv vphircle thrriih w0;lCi transport efi cieicy is achieved, there are cases where certain
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