CE413: Principles of Transportation Engineering

The Philippine Transport System

Transport is a key sector in the Philippine economy, linking population and economic centers
across the islands. The transport system of the Philippines consists of road, water, air, and
rail transport. Water transport plays an important role due to the archipelagic nature of the
country, but road transport is by far the dominant subsector accounting for 98% of passenger
traffic and 58% of cargo traffic. While the transport infrastructure has been developed and
spread across the country (about 215,000 kilometers [km] of roads, 1,300 public and private
ports, and 215 public and private airports), the level of service has not been sufficient due to
the lack of sustainable financing. Improving transport infrastructure is critical for strengthening
the investment climate and enhancing economic growth. The Philippines has seen modest
improvement in the quality of its transport services, but a large part of the road network
remains in poor condition and intermodal integration is generally weak. Poor sector
governance also impedes efficient operation of the sector.

• Roads. As of 2011, the country’s road system comprised about 215,000 km, of which about
15% were classified as national roads, thereby falling under the jurisdiction of the
Department of Public Works and Highways (DPWH). The remaining 85% of the network is
defined as local roads and falls under the jurisdiction of a variety of local government units.
As of November 2011, 79% of national roads and only 18% of local roads were paved with
either asphalt or concrete. The percentage of national roads that are paved has risen only
slowly from 71% in 2001 and remains well below the government’s original target of 95%
by 2010.

• Of the 31,400 km of national roads in the system, only about 45% (14,200 km) were
assessed as being in good or fair condition in November 2011. This figure is lower than
the percentages in 1982 (about 52%) and 2001 (about 47%). For local roads, the 2009
figure was much lower, at about 20% (about 35,300 km of 176,300 km). Annual investment
in the road system has remained at about 0.6% of gross domestic product (GDP), which
is much lower than the comparable figure for most other countries in Southeast Asia. As a
result, efforts to upgrade or expand the network have been limited.

• The extent of the road network in the Philippines, when measured in terms of road km per
square km, road km per capita, and road km per dollar of GDP per capita, is comparable
with or better than many neighboring developing member countries. However, when the
quality of the road system is considered—both in terms of the percentage of paved roads
and the percentage of roads in good or fair condition—the Philippines lags well behind
nearly all of its regional neighbors and competitors.

• The major cause of the overall low quality of the road network is poor and inadequate
maintenance. This is the result of (i) insufficient financial resources being made available
for maintenance, and (ii) inadequate institutional capacity of agencies responsible for road
maintenance. The high prevalence of overloading of trucks also contributes to the low
quality of the network. Axle-load surveys conducted by the DPWH in 2005 showed that
11%–12% of all trucks were overloaded. Lax enforcement of axle-load regulations
compounds this problem. In addition to the low quality of the road network, the poor state
of repair of much of the vehicle fleet and inadequate enforcement of traffic regulations are
also major contributors to the unsatisfactory status of road transport in the Philippines.

• The poor quality of the road network is a contributing factor to the rising number of road
accidents. There were 14,794 recorded road accidents in 2008, a 28% increase from 2007.
Deaths from road accidents in the first half of 2009 reached 624, which was 9% more than
in the equivalent period in 2008. These figures may underestimate the severity of the road
accident problem, because in counting road accident deaths the Philippines uses a
definition of death as occurring within 24 hours of a road accident, whereas the
internationally accepted definition is death occurring within 30 days of an accident. In

Source: ADB, Philippine Transport Sector Assessment, Strategy, and Road Map
CE413: Principles of Transportation Engineering

addition, it is estimated that only about 10% of road accidents are officially reported,
although these are likely to include many of the most serious accidents. In 2005, the
national cost of road accidents in the Philippines was estimated at $1.9 billion, equivalent
to 2.8% of the country’s GDP. According to the Department of Health, in 2008 road
accidents became the fourth leading cause of death in the Philippines.

• The government has developed a network of tolled expressways in central Luzon to

address transport constraints on economic development by (i) linking the major economic
and transport centers in Metro Manila and adjacent provinces, from Tarlac in the north to
Batangas in the south; and (ii) facilitating multimodal transport. The expressway network,
developed through public–private partnerships (PPPs) and with bilateral development
assistance, links industrial parks and special economic zones, the ports at Subic and
Batangas, and Diosdado Macapagal International Airport in Pampanga. While the
development of this network has reduced travel times significantly, additional efforts to
increase port capacity and improve management are necessary to realize fully the benefits
of an integrated multimodal transport system.

• Water transport. Interisland water transport is a very important subsector of the national
transport system. There are about 1,300 ports, of which about 1,000 are government-
owned and the rest are privately owned and managed. Of the government-owned ports,
about 140 fall under the jurisdiction of the Philippine Ports Authority (PPA) and the Cebu
Ports Authority; the remainder are the responsibility of other government agencies or local
government units. International cargo and container traffic has grown steadily in recent
years, supported by significant investments in the port of Batangas by the PPA and in the
port of Subic by the Subic Bay Metropolitan Authority. Despite growth in both the economy
and the population, passenger traffic on domestic interisland shipping services fell by about
13% between 2003 and 2008. Freight traffic on interisland shipping services has not grown
in line with the economy and now stands at about the same volume as in the mid-1990s.

• Interisland shipping continues to suffer from a poor reputation for safety, with an average
of 160 maritime accidents annually. The causes of maritime accidents include human error;
natural causes, such as typhoons, bad weather, and rough seas; lack of vessel traffic
management; lack of navigational aids; and poor ship maintenance. Natural causes were
the main causes of maritime accidents, comprising 36% of the total incidents recorded.
Accidents caused by human error were also a major contributor, comprising 24% of all
recorded accidents. To address this deficiency, the Maritime Industry Authority is
embarking on a number of safety programs during 2012–2013, including (i) a vessel
retirement and replacement program; (ii) nationwide mobile registration, licensing, and
franchising of motor bancas (wooden double outriggers); (iii) nationwide revalidation of
ships’ documentation; (iv) pilot implementation of an audit-based ship inspection system;
(v) enhancement of competence of technical personnel; (vi) implementation of the
categorization of navigational areas; (vii) a review of safety policies; and (viii) nationwide
revalidation of crew documents.

• In recent years, there has been significant development of roll-on roll-off (ro-ro) ferry
services, which are aimed at providing an alternative to traditional long-distance interisland
shipping services. The ro-ro system allows vehicles to drive onto and off ro-ro ferries
without loading or offloading of cargo. Because this eliminates cargo-handling labor and
equipment, and reduces the amount of time cargo is required to be in port, reductions in
sea transport costs can be considerable. In 2003, the Government of the Philippines
issued a policy to promote ro-ro. This was manifested in the opening of the government’s
Strong Republic Nautical Highway Program. The Strong Republic Nautical Highway is
composed of three major trunk lines: the western, eastern, and central nautical highways.
These three major lines consist of 12 main routes served by different shipping operators.
This program has not only linked the country’s major island groups of Luzon, Visayas, and
Mindanao, but it has also had positive effects on the economies of the smaller islands
along the major routes. The ro-ro policy has had a major positive impact, derived from the

Source: ADB, Philippine Transport Sector Assessment, Strategy, and Road Map
CE413: Principles of Transportation Engineering

significant reduction in transport costs. The principal sources of savings have been the
elimination of cargo handling charges and wharfage fees. As a result of the opening of the
nautical highways, (i) goods are being shipped more efficiently, (ii) transport costs have
been reduced, (iii) new interisland and regional links are being created, (iv) regional
markets have expanded, (v) tourism has benefited, (vi) local area development is being
accelerated, (vii) logistics practices are changing, and (viii) the domestic shipping industry
is restructuring and becoming more competitive. The growth of ro-ro services may have
contributed to the decline in both freight and passenger traffic on conventional interisland
shipping services. It is estimated that the use of ro-ro offers a saving of about 12 hours in
travel time between Mindanao and Luzon, and a reduction of about 30% in the cost of
freight transport and 40% in the cost of passenger transport.

• Port facilities to accommodate ro-ro vessels have been built or rehabilitated under the
program, with 42 ro-ro vessels operating on routes between these ports. However, these
42 vessels are run by some 25 shipping operators, which may suggest that the structure
of the ro-ro subsector is fragmented. While ro-ro facilities are already in place in some
ports, prioritization of the development, construction, and rehabilitation of ro-ro ports is
hampered by the need for massive capital outlays. Therefore, the PPA is working to
facilitate private sector participation in the provision of passenger terminal buildings and
ro-ro terminal services so that these needs can be met without creating an excessive
burden on government resources. The PPA is fast-tracking the finalization of policies that
allow private sector participation in the provision of these buildings and services.

• Air transport. There are 215 airports in the Philippines, of which 84 are government-
owned and controlled and the rest are privately owned and operated. Of the government-
controlled airports, 10 are designated as international airports, 15 are Principal Class 1
airports, 19 are Principal Class 2 airports, and 40 are community airports. The busiest
airport in the Philippines is Ninoy Aquino International Airport (NAIA) in Manila, which
handled 435,486 aircraft movements and an estimated 29.6 millionpassengers in 2011.
Mactan International Airport in Cebu is the second-busiest airport in the country with
82,554 aircraft movements and 6.3 million passengers in 2011. Domestic passenger traffic
at NAIA has been growing at almost 10% per annum since 2000. The growth of domestic
freight traffic has been much less at about 2.4% per annum. Given the growth of both
international and domestic air traffic through NAIA in recent years, serious capacity
constraints are likely to emerge before long. To address this, the government has plans to
further develop Diosdado Macapagal International Airport, formerly Clark International
Airport, as an alternative international gateway serving central Luzon. These plans will
need to be closely coordinated with those for the development of NAIA, and they will need
to include consideration of appropriate land transport connections between Diosdado
Macapagal International Airport and Metro Manila.

• The government has intensified efforts under way since 1992 to liberalize air transport. In
particular, it has been promoting the development of secondary international gateways
through negotiating bilateral “pocket open skies” agreements pertaining to secondary
airports in the Philippines. These agreements now cover all secondary international
gateways in the country and have led to substantial increases in travel through these
airports.

• Urban transport. The Philippines is experiencing rapid urbanization, and by 2030, about
77% of the population will live in urban areas. There are 120 cities in the country, including
16 in Metro Manila, which is the only metropolitan area in the Philippines. Other major
urban agglomerations exist, including in Davao, Cebu, and Iloilo, but they lack formal
metropolitan organizations. Transport systems in these cities are almost entirely road
based, with the exception of Metro Manila. Transport services consist mainly of jeepneys
(public utility vehicles), taxis, tricycles, and pedicabs that are privately owned and operated.
In 2010, taxis comprised 667,424 (35%) of the 1.9 million vehicles in Metro Manila, and

Source: ADB, Philippine Transport Sector Assessment, Strategy, and Road Map
CE413: Principles of Transportation Engineering

half of the 6.6 million vehicles in the country were motorcycles. Motorcycle users are
vulnerable to road crashes and contribute significantly to traffic congestion.

• In Metro Manila, the urban transport infrastructure consists of a network of roads and
railways. A functional classification system of roads has been established with the arterial
roads forming a radial circumferential pattern of 10 radial roads and 5 circumferential
roads. Two circumferential roads are incomplete and a sixth is in the planning stage. While
some of the principal road corridors in Metro Manila have high capacities, traffic volumes
are also extremely high. As a result, the movement of people, goods, and services is
becoming increasingly difficult. Although restrictions on vehicle usage are in place, their
effectiveness is decreasing as rates of motorization increase; consequently, congestion in
Metro Manila is increasing rapidly and is estimated to cause economic losses equivalent
to about 4.6% of GDP. While congestion in urban areas outside of Metro Manila is less
severe, increasing urban populations combined with higher rates of motorization suggest
that traffic congestion in those urban areas will worsen in the near future.

• As in other urban areas, road-based public transport in Metro Manila is provided entirely
by the private sector. There are an estimated 433 bus companies operating 805 routes.
The majority of bus companies own more than 10 units, with only 7 bus companies owning
100 units or more. Jeepneys serve 785 routes in Metro Manila, with many jeepney
operators owning only one unit. In addition to jeepneys, air-conditioned Asian utility
vehicles provide express services in several areas of Metro Manila, together with taxis and
localized modes of transport such as tricycles and pedicabs. Tricycles and pedicabs are
restricted to serving local areas and provide a feeder service to the larger-scale public
transport services.

• Railways. The railway system consists of light rail transit (LRT) lines in Metro Manila and
heavy rail lines in Luzon. The three LRT lines commenced operations in 1984, 1999, and
2003. Two lines are owned and operated by a government-owned corporation, the Light
Rail Transit Authority (LRTA), while the third was financed and constructed by a private
corporation, the Metro Rapid Transit Corporation (MRTC), and is operated by the
government under a build–lease–transfer agreement. The lines operated by the LRTA
carry about 579,000 passengers each day, while the MRTC line carries more than
400,000 passengers daily. Fare structures are distance based, and fare levels are low
relative to comparable systems elsewhere in the region. One reason that fares can be set
at these low levels is that the debt of the government-owned and controlled corporations
is serviced by annual allocations in the government budget, which has the effect of
subsidizing the operations of the light rail systems. Overall load factors on the LRT lines
exceed 60% and overcrowding is common at peak periods. The government is reported to
be considering transferring the operations of the MRTC to the LRTA. A further LRT line
has been approved for development and others are under consideration for development
through PPP.

• A limited number of heavy rail commuter services are operated by the Philippine National
Railways (PNR), serving areas to the south of Metro Manila. The PNR carried 9.1 million
passengers in 2010 and 15.4 million in 2011. The increase in ridership is attributed to the
completion of the rehabilitation of the Caloocan to Alabang section of the commuter line
and the introduction of new rolling stock, both financed by bilateral development
assistance. 20. Other than these commuter services and some other services linking towns
in the Bicol region, the heavy rail lines in the Philippines have been essentially
nonoperational for several years. The Southern Line linking Manila to the Bicol region has
not operated since it sustained typhoon damage in 2006, although the line has now been
restored and trial services have been operated between Naga City and Metro Manila.
Before its closure in 2006, passenger traffic on this line had been declining steadily and
freight traffic was negligible. The Northern Line has been nonoperational for more than
25 years, although there are plans to reopen it under the North rail Project.

Source: ADB, Philippine Transport Sector Assessment, Strategy, and Road Map