PHYSICAL INFRASTRUCTUREModerators: 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.

Shipbuilding

Electronics

AutomotiveAerospace

parts

Chemicals

Garments

agribusiness Furniture

IT BPM

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

Enhanced Illustration based on Dr. Cal’s Diagram

Transportation Vision

TRANSPORT

POLICIES

Development

Strategies &

Principles

Funding Constraints

Inconsistent Approaches

Lack of Understanding

Legal Impediments

INTERVENTIONSImproved

Quality of Life

Infrastructure

Developments

Travel Demand

Management

City Logistics

Economic Measures

(Road Pricing)

Inclusive Smart Mobility

Provision of Mass

Transit System

Accessibility

Inclusive Economic

Growth

Low Carbon Society

Employment

Generation

Seamless Movement of

People & Commodities

Sub-regional Transport

Cooperation

Improved LOS

Seamless

Intermodal

Logistics

Network

System

Resilient

Low

Carbon

Transport

System &

FacilitiesTransport Planning Policy Framework Process

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

The Philippines stays at the 57th rank out of 138 countries in the 2016-2017 Report.

Global Competitiveness Report – Overall Infrastructure Ranking2016 – 2017 edition

QUALITY OFOVER-ALL

INFRASTRUCTUREROADS RAILROADS SEAPORTS AIRPORTS

QUALITY OF ELECTRICITY

SUPPLY

INTERNETBANDWITH

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

Current State

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

Source: World Bank LPI

2016 Edition of the LPI covered 160 countries.

WB Logistics Performance Index (LPI) – Overall Ranking

Issues and Challenges

Issues and ChallengesLow paved ratio for local roads, increasing number of trucks

National, Provincial and City Road Inventory as of 2015

Municipal and Barangay Road Inventory as of 1999

SOURCE: DPWH

Condition of Philippine Road Network:As of December 31, 2015

PAVED RATIO (Local Roads)Provincial 35%Municipal 35%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)

Issues and ChallengesMost airports are operating beyond capacity; CLARK underutilized

Airport Passenger Volumes and Capacity

AirportMaximum Passenger

CapacityPassenger Volume

(2014)Capacity Utilization

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

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 ChallengesMost cargoes are handled in the Port of Manila;

Batangas and Subic Ports are underutilized.

PHILIPPINES SINGAPORE MALAYSIA INDONESIA VIETNAM

Mobile network coverage(% of population)

99.00 100 95.4 100 70

International Internet bandwidth (kb/s per user)

27.7 616.5 27.2 6.2 20.7

ICT use for business to business transactions (high = 7)

4.8 5.8 5.7 4.9 4.9

Business to consumer Internet use (high = 7)

4.8 5.5 5.9 5.4 4.8

Prepaid mobile cellular tariffs (PPP $/min)

0.40 0.19 0.09 0.19 0.15

Fixed broadband Internet tariffs (PPP $/month)

54.59 46.31 42.47 27.92 2.59

WEF Global Information Technology Report 2016

Issues and ChallengesCost, regulatory quality, infrastructure gaps and cybersecurity measures

are major constraints in the penetration rate and use of IT

PHILIPPINES SINGAPORE MALAYSIA INDONESIA VIETNAM

Electricityproduction, kwh/capita

771.4 8,883.5 2,456.7 858 1,416

Quality of electricity supply

4.0 6.8 5.8 4.2 4.4

Comparison of Energy Statistics among ASEAN-5 Countries

Source: World Economic Forum (2016), Global Competitiveness Report and Global Information Technology Report

Issues and ChallengesSecurity and reliability of supply remains to be

the primary concern in the energy sector

Recommendations

Recommendations1. 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

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

Recommendations

THANK YOU.

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