Transport in the Philippines

 Roads and Highways  Urban Transport  Railways  Ports and Shipping  Air Transport

Transport infrastructure plays an important role in integrating the island economies of an archipelago such as the Philippines. The country relies heavily on its road network to handle most of the passenger movement and about half of freight movement. Ports are important for long-distance logistical needs and inter-island routes provide regular roll-on roll-off vessel operations that connect the main islands of Luzon, Visayas and Mindanao. Airport and rail infrastructure provide alternative means of transporting people and goods to major economic hubs around the country.

During the last decade, the Philippines has attained important improvements in transport infrastructure and services. A road user’s fund was established and various modes of private sector participation in toll roads, rail and airports were undertaken after the Build-Operate-Transfer law was passed. The Government also adopted liberalization and deregulation polices in the shipping industry in 1994 and civil aviation in 1995, which resulted to increased competition, lower tariffs and better services.

Important challenges remain with serious consequences for the country’s competitiveness and for meeting its growth and poverty reduction targets. Although the road network is quite extensive, less than half is considered to be in good condition; roads leading to many tourist destinations and in conflict-affected areas in Mindanao are inadequate and road congestion has become a major problem in highly urbanized Metro Manila.

Reforms envisioned for the ports, airports, heavy rail transport have yet to be realized. Private sector participation experience in the transport sector has likewise been less than optimal. With weaknesses in planning, preparing and executing projects, combined with the highly politicized decision making, increase uncertainties and risks thereby deterring increased private sector involvement.

In the next few years, the Government aims to attain better interconnection between islands of the country to open up new economic opportunities, reduce transportation costs and increase access to social services.  Priority projects include the completion of the nautical highway system; projects that will spread development and provide new opportunities for growth in other regions to decongest Metro Manila; provide better access to tourist sites; and improvement in underdeveloped regions and roads leading to conflict affected areas.

Projects	Data	Maps
All Projects Active Projects	Philippines at a Glance Statistical Information

Roads and Highways

As of 2004, the total length of the non-toll road network was reported to be 202,860 km, with national roads accounting for 15 percent of the total, provincial roads 13 percent, and city/municipal roads 12 percent and barangay roads 60 percent. Road classification is based primarily on administrative responsibilities (with the exception of barangays), i.e., which level of government built and funded the roads. Most of the barangay roads are unpaved village-access roads built in the past by Department of Public Works and Highways (DPWH) but devolved to Local Government Units. Farm-to-market roads fall under this last category and a few are financed by the Department of Agrarian Reform and the Department of Agriculture.

The Philippines has a total of 165 km of toll roads. The first two of these toll roads, the North Luzon Expressway and South Luzon Expressway, were constructed by DPWH in 1975–1977 and subsequently franchised to a private company, Construction and Development Corporation of the Philippines, in 1977 (later taken over by the government and renamed Philippine National Construction Corporation).

When the Build-Operate-Transfer Law and its amendment in 1994 was passed, the Philippine National Construction Corporation entered into several joint-venture agreements with the private sector to rehabilitate, upgrade and extend the North Luzon Expressway and the South Luzon Expressway, as well as expand the expressway system. Other toll roads have under private concessions such as the Manila–Cavite Toll Expressway and the Southern Tagalog Arterial Road.

Large parts of the road network continue to be in poor condition (only 20 percent of the total road network is paved). Inadequate connectivity and the lack of a sustainable road safety strategy likewise reduce the efficiency of the road network in promoting growth and providing safe access.

Underinvestment in the road network  (total expenditures on the road network were estimated at 0.9 percent of GDP in 2002 and funds from the road user charges continues to fall short of required support for road maintenance) and inefficiency in resource utilization are two major impediments to the road sector development in the country. Reforms such as placing greater reliance on performance based-contracts in the maintenance of roads and the improvement of internal business process of the DPWH are being pursued. 

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Urban Transport

Manila is the country’s foremost urban center. It grew from the mouth of the Pasig River into Manila Bay, where the port-related activities are located. Urban expansion later radiated outwards from Manila following a road network of radial and circumferential roads, and eventually included 16 other cities and municipalities that today comprised Metro Manila. A metropolitan authority, the Metro Manila Development Authority was created to coordinate metro-wide programs and concerns with the 17 Local Government Units.

With the expansion of the road network, particularly with the early completion of Metro Manila’s main thoroughfare, the Epifanio de los Santos Avenue (EDSA), several sub-centers began to emerge. This transformed the urban structure into a poly-centric metropolis – with the Central Business District moving out of Escolta in Manila and into Makati in the 70s. Aside from Makati, the other urban nodes are Cubao and Ortigas – all of which are along EDSA and all driven by large property developers. Now, urban development is fast spreading in the neighboring provinces of Cavite, Laguna, and Bulacan and spans a metropolis of about 15 million people.

Public transportation services – mostly buses, jeepneys, tricycles (motorcycles with sidecars) and taxis – are predominantly privately owned and operated. In the crowded streets of Metro Manila, tricycles and pedicabs (bicycles with sidecars) provide transportation services through narrow streets and routes where jeepneys and buses are not allowed to operate. Vans and microbuses also ply these routes and carry more passengers and charge less (a flat rate per head) than taxis.

Metro Manila has three light rail transit lines – the Light Rail Transit (LRT) line 1, LRT line 2 and the Mass Rail Transit (LRT 3).  LRT line 1 is a 15-km elevated rail system running from Baclaran in Paranque City to Monumento in Kaloocan City. Operational since 1984, the Light Rail Transit Authority (LRTA), a government owned-corporation, runs it.

A second rail line MRT (LRT 3) is privately-owned and operating under a Build-Lease-Transfer contract.  Operational since July 1999, it runs a 16.8 km rail line along EDSA from Taft to North Ave. The Department of Transportation and Communication operates the Mass Rail Transit directly and pays an annual lease fee to the private proponent. LRT 2 was later built under government financing and became operational in 2004. Operated by LRTA, it runs a 13.8 km rail line from Santolan, Marikina City to Recto, Manila. 

The southern segment of the Philippine National Railways also traverses part of Metro Manila. Its commuter service line (about 46 km) runs from Caloocan to Carmona. Train pass-through however is infrequent and ridership is poor.

Congestion continues to be a major problem of Metro Manila. The associated cost of congestion in Metro Manila alone was estimated at around US$12 billion a year in 1996 prices, or 4.6 percent of GDP. Spreading development outside Metro Manila therefore has become one of the priorities of the Government.  This will entail the creation of a transport logistics system that will ensure efficient linkages between its business hubs and the neighboring provinces.

In 2003, the Strong Republic Transit System was launched to integrate urban development and link various rail facilities in the metro. The Strong Republic Transit System project likewise aims to rehabilitate the old lines like LRT 1 and the Philippine National Railways; extend LRT 1 to the nearby province of Cavite and the MRT from North Avenue to Monumento.  Also, the Northrail Project is being planned to provide transport services from Metro Manila to Central and Northern Luzon.

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Railways

The Philippine National Railways, a government-owned and controlled corporation, acts as the owner and operator of the heavy rail infrastructure.

Its operational route network measures 491 km running along the Main Line South from Manila to Legaspi, Albay. It previously had a Main North Line running from Manila to San Fernando, La Union but this segment has been closed for some time. PNR offers three types of services: long-distance passenger service, commuter service, and freight and express cargo services. The passenger service line is a 65 km stretch running Caloocan City in Metro Manila to Carmona, Cavite. 

The Philippine National Railways suffers from chronic operating deficit and has largely depended on government subsidies for its operations.  As of 2003, total loss amounted to US$12.2 million, with total revenues barely meeting personnel expenses.

Lack of rolling stock, insufficient capacity, poor ridership, inefficient ticketing system and rundown stations continue to plague the Philippine National Railways. There are, however, attempts to revitalize the ailing heavy rail transit. A rolling stock rehabilitation project was implemented in 2000 and in the following year, PNR commissioned 33 second-hand air-conditioned, donated coaches from East Japan Railways for commuter and long-distance operation. Privatization of the Philippine National Railways is also planned.

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Ports and Shipping

The Philippines, being an archipelago, relies on inter-island shipping for its long-distance logistical needs.

There are 2,456 ports in the country and most of them are small. The government corporation Philippine Ports Authority operates the biggest public ports while the Philippine Fisheries Development Authority manages the big fishing ports/wharves. For municipal ports, funded by the Department of Transportation and Communication operation and ownership is devolved to the Local Government Units. There are four other independent port authorities involved in public port operations:

• the Cebu Port Authority operates Cebu Port and several small neighboring ports in Cebu island;
• the Subic Bay Metropolitan Authority operates the Subic freeport;
• the Bases Conversion Development Authority (BCDA), which has jurisdiction over the San Fernando Port in La Union; and
• the Cagayan Economic Zone Authority operates the Port Irene freeport.

The biggest common-user ports in the Philippines are in Manila – the South Harbor (for international cargo), the Manila International Container Terminal, and the North Harbor (for domestic traffic). These are publicly-owned ports under the purview of the Philippine Port Authority but are privately operated under long-term concessions.

Apart from owning and operating public ports, the Philippine Port Authority  also has the mandate to regulate private ports. There are about 400 private ports regulated by them. These ports are mostly for industrial use though some operate as commercial ports.

In addition to traditional shipping services, the Government launched in 2003 the Nautical Highway system to maximize the use of the roll-on, roll-off system to connect Luzon and Mindanao through the Visayas islands. The project involves rehabilitating existing ports and construction of new ones to accommodate roll-on, roll-off  vessels. Construction of intermodal links is also being initiated such as the Western Seaboard Intermodal Link project to complement part of the roll-on, roll-off  terminals in the Eastern Seaboard.

The domestic shipping industry has been deregulated since 1994 and the benefits of the reforms are already felt through the introduction of better quality shipping services. Shipping companies are predominantly privately-owned and operated. In 2001, there are 585 registered shipping companies in 2001, compared to 223 in 1997. Some industrial firms own and operate vessels to carry their specialized cargoes, like Liquefied Petroleum Gas and chemicals. The shipping industry however continues to be highly concentrated with five major shipping lines accounting for 90 percent of passenger and cargo markets.

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Air Transport

The Air Transportation Office classifies the public airport network as: regular international, alternate international, trunkline, secondary and feeder airports.

The international airports are: Ninoy Aquino International Airport (NAIA), Subic International Airport, Clark International Airport and Mactan-Cebu International Airport. The alternate international airports are: Laoag, Zamboanga, Davao and General Santos airports. In addition to these, there are about 111 registered private airports scattered throughout the archipelago.

Air transportation projects were pursued mostly through official development assistance financing. Only one major project was undertaken through the private sector participation mode, the NAIA International Passenger Terminal 3 project. The project however met legal hurdles and controversies.

The NAIA International Terminal 3 was almost complete when its contract (unsolicited Build-Operate-Transfer) was rendered null and void by the Supreme Court in early 2003.  The private proponent’s foreign counterpart later filed an arbitration case against the Philippine government. 

Before the domestic civil aviation industry was liberalized in 1995, the Philippine Airlines provided all domestic air passenger and cargo services. When the industry was opened up to new players, niche markets were established wherein bigger players – Philippine Airlines, Cebu Pacific and Air Philippines – concentrate on major routes where traffic demand is heavier while secondary and smaller players service tertiary routes. Although Philippine Airlines still captures majority of the market (especially when it acquired Air Philippines), liberalization has resulted in lower fares offered by other airlines.

Presentations:

Tale of Three Cities: Urban Rail Concessions in Bangkok, Kuala Lumpur and Manila (255kb pdf)

More Information:
 Country Assistance Strategy
 Millennium Development Goals
 Country Website

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