Home » Economics
Category Archives: Economics
A brief history of transport strikes – Part 4: impacts and implications
What was supposed to be a week-long transport strike by jeepney drivers and operators was called off yesterday. Frontpage news showed a photo of representatives of protestors with government officials. Government official statements also declare that the government will be talking with the transport sector to sort out issues and to try to address these in relation to the PUV Modernization Program (PUVMP). One day earlier, government was quick to state that the strike had no impact on transport. Were there really no impacts?
I think the fact that schools went back to online mode and offices allowed employees to work from home show the impacts of the transport strike. If you haven’t noticed, the government has been using the tactic of cancellation of classes for quite some time now. To reduce the impacts of transport strikes on commuters, classes on all levels were canceled, thereby reducing transport demand. The only difference now is that there is capacity for online classes due to adjustments made during the height of the pandemic. So instead of cancelling classes altogether, schools reverted to online mode. Meanwhile, for those who needed to go to their workplaces and did not have their own vehicles, there were various free rides (libreng sakay) services provided by national and local government agencies. Cities like Quezon City already operated their own bus services so people could take these instead of their usual PUV modes for commuting.
What are the implications of the shortened strike? The shortened strike has various implications. One is that it showed the protesters did not have enough resources to sustain the strike. It also showed that transport leaders appear to just want some attention from government. A colleague commented about this being something like a show or the strike being part of a game of “bad cop, good cop” among government officials and agencies. If you haven’t noticed, this has been going on for some time now. Government already knows how to reduce the potential impacts of protests like this. Suspending classes in schools significantly reduces the travel demand on a typical weekday. Offices giving their employees the option to work from home during the strike also adds to the reduction in travel demand. And libreng sakay vehicles are easier to deploy as agencies and LGUs have vehicles for this purpose. Meanwhile, the continuing rise in motorcycle ownership also contributed to people being able to still commute (i.e., having the motorcycle taxi option). At least for Metro Manila, once the railway projects are completed, there will be a railway option for commutes. Barring a simultaneous strike with buses and vans, protests from the jeepney sector will surely be diminished.
–
A brief history of transport strikes – Part 2: reasons for a strike
The current transport strike is not about fare hikes or the rising prices of fuel. Those are the most common reasons for jeepney drivers and operators going on strike. It’s quite simple for these reasons: Drivers protest when government refuses to increase fare rates amidst rising costs of operations and maintenance. And they don’t when fares are reduced as fuel prices are going down.
The Department of Transportation (DOTr) through its Land Transportation Franchising and Regulatory Board (LTFRB) is tasked with evaluating operations and maintenance costs of public utility vehicles and prescribe the minimum and incremental fares for these services. Fare hikes (and reductions) are the consequence of fuel price increases (or decreases) but are not set as dynamic or automatic. Fuel prices, as can be observed, can fluctuate and currently change every week. Fares are not automatically adjusted whether fuel prices are increasing or decreasing and are heavily regulated by government in part to supposedly protect the interests of the riding public. As such, fare matrices or the structured fares according to the various routes and the distances covered by public utility vehicles
The reason for the current transport strike is generalized as a jeepney phaseout. The term ‘phaseout’ actually refers to the PUV Modernization Program (PUVMP) of the government that seeks to replace all conventional jeepneys with ‘modern’ or ‘modernized’ units. The latter include mini-bus types as well as those that retain the conventional jeepney form but usually larger and with newer engines and interior layout. This is not necessarily a phaseout like the one I described in Part 1 along the LRT Line 1 corridor.
Again, much of the opposition cites the high cost (and therefore unaffordable) of a modern jeepney. The financing schemes currently available as well as the requirement for jeepney operators and drivers to be part of a transport cooperative to avail of these financing schemes are still considered unacceptable by many. And yet, government seems unwilling to extend resources in order for operators and drivers to be able to afford a new vehicle. The old jeepneys would still have some value but definitely not near a substantial down payment needed for low monthly payments. These monthly payments cannot be covered by the typical boundary (basically rent) for operators or the daily income for drivers.*
What is the cost of replacing conventional jeepneys with new, ‘modernized’ vehicles? Well, let’s assume that a new vehicle costs 2.4M pesos. Also, perhaps cover only the ones operating in the urban setting (i.e., exclude for now those serving provincial routes especially those used also for freight (e.g., top loads)), say 50% of the estimated 250,000 units need to be replaced. That goes up to 300 billion pesos. If we were to replace only Metro Manila jeepneys, that will be 132 billion pesos. These numbers can be compared to the cost of major projects like the Metro Manila Subway (488 billion), the Bataan-Cavite interlink bridge (175 billion) and the New Manila International Airport in Bulacan (735 billion). Would it be worth it (benefits-wise) to invest in new jeepneys?
–
*Of course, this also indicates a flawed business model for jeepney operations. But that’s another story.
Article share: On a future with fewer cars
Advocates of sustainable transport including those pushing for more efficient public transport and more bike lanes often cite what is supposed to be car ownership data from past studies like the one conducted by JICA for Mega Manila. Most recently, I read an article that mentions only 5% of Filipinos own a car so they shouldn’t be hogging the road space against the rest. It seems so simple yet does not take into consideration geographic and demographic factors. It seems to underestimate vehicle ownership across the country and especially in cities. Also, do we equate vehicle ownership with just car ownership? Many may not have cars per se but own and operate motorcycles or tricycles.
I share the following article from the Washington Post as it presents on initiatives and studies from the Institute of Transportation Engineers concerning car ownership in the US. The data is presented in a way that we can clearly understand car ownership from various perspective including income level, household size, age and disability, among others.
Aratani, L. (February 18, 2023) “How a future with fewer cars may change how communities are designed,” Washington Post, https://www.washingtonpost.com/transportation/2023/02/18/automobile-ownership-street-design/ [Last accessed: 2/27/2023]
Here is an excerpt from the article: “There are people who are car-free and those who are carless. The car-free are the people who are choosing not to have a vehicle because they have access to other means of transportation or they work from home. The carless are people who either can’t afford or don’t have access to a car for other reasons.”
It would be nice to have a similar data set and analysis for the Philippines so we can really understand mode choice or preferences with respect to various factors including household income. Among the data sets we can probably use are the census data and the Family Income and Expenditure Survey (FIES) that are regularly collected and from which we can ascertain vehicle ownership vs. various parameters.
–
Article share: Redesigning Streets for Livability: A Global View
I am sharing this article on redesigning streets. It is actually a promotion for a book: “Streets For All: 50 Strategies for Shaping Resilient Cities”.
To quote from the article:
“Streets For All: 50 Strategies for Shaping Resilient Cities is an expansive 270-page volume that explores the evolving potential of the most ubiquitous public space in our cities. It offers ideas, tactics and strategies from across the world on how our streets are being, and, can be rethought, recast, repurposed and redesigned towards greater resilience and resourcefulness. The globally diverse opinions and case studies in this book remind us why cities with limited means can offer profound lessons to affluent societies that take their prosperity for granted. And in turn, how the virtues of effective urban administration and reinforcement seen in developed societies could reassuringly serve to inspire less economically developed ones.”
Push and Pull: The Link Between Walkability and Affordability
Here is a quick share of an article about the link between walkability and affordable housing.
To quote:
“While early pandemic pundits predicted the ‘death’ of urban areas, recent trends show that people—perhaps more than ever—value the benefits of compact development and easily accessible amenities and services. But “Demand drives up costs and can reduce low- and moderate-income households’ opportunity to live in highly walkable areas,” the report warns.”
Source: Push and Pull: The Link Between Walkability and Affordability
Some people seem to be baffled why people choose to purchase homes and reside in the suburbs or away from the city centers. It is actually simpler than what many tend to overthink and attribute purely to the condition of our transportation system. It takes two (or more apparently) to tango and housing affordability is critical for the Philippines’ case.
–
Some takeaways from a lecture
I lecture from time to time at the Philippine Public Safety College. This is the counterpart of the National Defense College. In the latter graduates are conferred a Masters in National Security Administration (MNSA) while in the former, graduates are conferred a Masters in Public Safety Administration (MPSA). It is no wonder that many who take these courses are military or police officers seeking graduate degrees that may later be useful for them after their typically early retirement (military and police officers retire at 56 years old instead of the typical 65 years mandatory retirement for other government employees). There are many civilians who take these programs, too. The MNSA degree actually promotes a person to a high rank as a military reservist. I am not sure about the MPSA degree but graduate degrees like these are useful for promotions in their respective offices.
I lectured recently to a class consisting of two batches of their MPSA program. Each batch consists of uniformed (mostly senior police officers with a rank equivalent to at least a Lt. Col.) and non-uniformed personnel (from various offices and professions including public and private universities, private companies, etc.). I get a lot of questions and comments regarding transport and traffic during my lectures. Some can be out of context or perhaps posed in a smart-aleck fashion but most are well-intentioned. After all, who doesn’t want to “solve” traffic? Among the more notable comments during my recent lecture are as follows (not in any order):
- There is a need to have better urban planning for our cities;
- Investments for transportation infrastructure need to be shared by government and the private sector;
- A holistic approach is required and we cannot isolate transportation or traffic;
- There is a need to have a law restricting vehicle ownership (mostly related to parking);
- There is a need to invest or allocate more resources to develop other cities to help decongest the larger cities.
Based on my experience having lectured at the PPSC over 5 years, these two batches had more listeners and were more sensible when they posted their comments and opinions on the chatbox (the lecture was via Zoom). There were only a couple of comments with ideas I did not agree with:
- Transferring the capital to another location – this seems to be a trendy (read: “nakikiuso”) topic and a very tempting one for discussion but it is not a simple task and has had mixed results in other countries that tried it (e.g., Brazil, Pakistan and Malaysia). Is it worth exploring? Probably.
- Cable cars for Metro Manila – I explained that this is still band-aid solution that does not address the roots of the transport problems experienced by Metro Manila. It is not suitable as for one, it will not have the capacity required for regular commutes and, to me at least, it is more a novelty than a solution. Resources would be better allocated elsewhere such as active transport.
Overall, I thought that this most recent lecture generated the best feedback so far from my students. I look forward to more lectures and interactions like this. And perhaps the next one will be face to face.
–
Why do we keep widening roads?
I’m just going to share this article here. The article from The NY Times asks a question that has been bugging planners and engineers, particularly those who are in government and perhaps under the agencies like the DPWH, DOTr and NEDA. This also applies to planners, engineers and those from other disciplines involved in transportation infrastructure development and particularly roads or highways.
–
Shared article: Active and Micro Mobility Modes Can Provide Cost-Effective Emission Reductions–If We Let Them
I’m sharing this article on active and micro mobility modes from Todd Litman, published in Planetizen.com:
Source: Active and Micro Mobility Modes Can Provide Cost-Effective Emission Reductions–If We Let Them
From the article:
“Common Active Transportation Leverage Effects:
–Shorter trips. Shorter active trips often substitutes for longer motorized trips, such as when people choose a local store rather than driving to more distant shops.
–Reduced chauffeuring. Better walking and bicycling conditions reduces the need to chauffeur non-drivers (special trips to transport a passenger). These often require empty backhauls (miles driven with no passenger). As a result, each mile of avoided chauffeuring often reduces two vehicle-miles.
-Increased public transit travel. Since most transit trips include walking and bicycling links, improving these modes supports public transit travel and transit-oriented development.
-Vehicle ownership reductions. Active mode improvements allow some households to reduce their vehicle ownership, which reduces vehicle trip generation, and therefore total vehicle-miles.
-Lower traffic speeds. Active travel improvements often involve traffic speed reductions. This makes non-auto travel more time-competitive with driving and reduces total automobile travel.
-More compact development. Walking and bicycling support more compact, multimodal communities by reducing the amount of land devoted to roadways and parking, and creating more attractive streets.
-Social norms. As active travel increases, these modes become more socially acceptable.
The article is a must read if we are to understand how important active transport and micro mobilities are in the context of today’s transport conundrum. Of course, part of the contextualization and perhaps ‘localization’ on these modes will be related to land use or development. The latter is a big challenge especially for the likes of Metro Manila and other rapidly developing cities in the Philippines where housing in the cities (related to compact development) has become quite expensive and has driven more and more people to live in the suburbs. As I’ve mentioned in previous posts, this has resulted in more pressure to develop transportation systems but infrastructure development cannot play the catch up game given the limited resources for their construction. Meanwhile, services are also behind in terms of quality and requires reforms and rationalizations.
–
On the future of the common auto repair shop
I saw this article on Wired about how high-tech vehicles are killing the auto repair shop. I have to agree with the observation. Perhaps it’s more imminent in the First World where newer model vehicles including electric and hybrid vehicles cannot just be repaired at a conventional auto repair shop. And they do have more of the newer vehicles as they have phased out the older ones that don’t comply with the higher standards that are now in place in terms of things like emissions and fuel consumption.
Marshall, A. (October 20, 2022) “High-Tech Cars Are Killing the Auto Repair Shop,” Wired, https://www.wired.com/story/high-tech-cars-killing-the-traditional-auto-repair-shop/?bxid=5bd6761b3f92a41245dde413&cndid=37243643&esrc=AUTO_OTHER&source=EDT_WIR_NEWSLETTER_0_DAILY_ZZ&utm_brand=wired&utm_campaign=aud-dev&utm_content=WIR_daily_102122&utm_mailing=WIR_daily_102122&utm_medium=email&utm_source=nl&utm_term=P4 [Last accessed: 10/22/2022]
To quote from the article:
“As the traditional auto repair shop disappears, so might the stereotype about the grizzled and grimy auto repair tech with a wrench in his hand. “These complexities have made it more difficult for a shop to operate if it’s not running properly—if it’s not properly funded, not properly insured, doesn’t have the correct tooling, doesn’t have the right insurance,” says Lucas Underwood, the North Carolina shop owner.”
In our case, there are still so many of the conventional vehicles operating including the locally fabricated ones using surplus engines. At least for the more basic repairs the neighborhood repair shops, the “talyers” as we call them, will survive for now and perhaps for a longer while than how it is in the First World. Even the backyard or self taught auto mechanics are trying to keep up with the electronics and many are honest enough to tell you to go to the ‘casa’ if they cannot repair your vehicle or perhaps the parts are not available at the typical auto supply shop.
–
On the impacts of bicycle use
I’ve probably read a lot of posts on social media advocating for bicycle use. Here is another article that provides us with evidence about the impacts of cycling on travel, emissions and health:
Timmer, J. (August 20, 2022) “Here’s What Happens When Countries Use Bikes to Fight Emissions,” Wired, https://www.wired.com/story/bike-more-curb-global-emissions/ [Last accessed: 8/24/2022]
To quote from the article:
“Globally, adopting a Danish level of bicycle use would reduce annual emissions of CO2 by 414 million metric tons, approximately equivalent to the UK’s emissions in 2015. Boosting that to a Dutch level would eliminate nearly 700 million metric tons, or most of the emissions from Germany in that year.
The researchers also noted that countries like the Netherlands and Denmark have much lower rates of obesity than their peer countries. Based on the known health risks there, they estimate that, globally, we’re already avoiding 170,000 deaths annually due to cycling. Expanding this globally, they found that Denmark-equivalent bicycle use would prevent 430,000 deaths per year. Dutch levels of cycling would prevent 780,000 deaths.
That said, the vulnerability of cyclists to cars poses its own lethal risks. But these aren’t anywhere close to outweighing the benefits from exercise and lower obesity. (They’d add about 90,000 and 160,000 additional deaths per year for the two levels of use.) And if fewer drivers are using cars, there’s a chance that those numbers would come in even lower.
It’s worth noting that these numbers almost certainly underestimate the benefits of shifting to bikes. Bicycles use far fewer resources to produce, and they last longer than most cars. Maintenance is likely to be far less resource-intensive as well. So simply focusing on the use of the bike omits a lot of things that would show up in a detailed life-cycle analysis.
The researchers are certainly correct that there are a lot of locations where weather makes cycling a less-than-ideal option—and the range of places where heat makes it a positively dangerous option is expanding in our changing climate.
But some of the other issues are less severe than they might appear at first. For example, the advent of bicycles with electric assist means that hilly locales aren’t necessarily the barrier they might have been a decade ago. And while a number of countries have large open spaces where cars will remain a necessity, the trend toward urbanization means that most people in those countries will live in places where cycling can be made an option.
So, the biggest barrier is likely to remain the social will to rethink transportation.”
Indeed, social will (as well as political will) is perhaps the biggest barrier in our country. Many people may not agree but the evidence for this is so clear and obvious that one has to be naive or oblivious to not see it. How else will one explain people sticking to their cars and more readily shifting to motorcycles rather than the bicycle. Of course, there are other factors to be considered and the article actually cites wealth and geography as strong prerequisites in developing a cycling culture. We need to do much more to determine where interventions are needed including land use planning and land development as well as the provision of affordable housing closer to workplaces, schools, shops and other places of interest (Hello 10- or 15-minute cities!).
–
Caught (up) in traffic 