Strained Infrastructure in Philippines Erodes the Nation’s Growth Prospects By FLOYD WHALEY AUG. 3, 2014 MANILA — Chris Ibasan travels only about five miles to work each day in one of Manila’s business districts, but it is often a grueling two-hour commute that gets him into the office late. “My manager understands,” said Mr. Ibasan, a 24-year-old shipping company employee. “Everyone is late; even the managers are late for work.” From Mr. Ibasan’s perspective, the problem is simple. “There are too many people going to work, too many vehicles and not enough roads,” he said. “And taking the train is like lining up to see a movie star. You wait for hours.” But from an economist’s perspective, the problem is even larger. The 2.2 million vehicles a day that grind away on Manila’s crumbling road system cost the country 876 billion pesos a year, or more than $20 billion, in lost productivity and wasted energy, according to a recent study by the Japan International Cooperation Agency. That is a serious drain on an economy of about $250 billion. “Infrastructure in the Philippines — transport, energy and communication — is in a difficult state to say the least,” said Thierry Geiger, an economist with the World Economic Forum. “Year after year, when we ask business executives based in the country about the state of infrastructure, they say that it is improving. Yet it remains a major bottleneck.” The Philippines has been one of the fastest-growing economies in Asia in recent years. The gross domestic product rose 7.2 percent in 2013, although it is expected to slow modestly this year while remaining above 6 percent, according to most regional economists. In addition to new, streamlined government spending processes and the paying down of public debt, much of the improvement in the economy is linked to the anticorruption efforts of President Benigno S. Aquino III. But the infrastructure problems now threaten to hold the Philippines back from reaching the next level, economically speaking, and improving its manufacturing base. Infrastructure problems have surpassed corruption as the leading economic obstacle, according to the most recent World Economic Forum competitiveness report, which is based on responses from people doing business in the country. Manila is plagued by power failures, chronic water shortages, an antiquated telecommunications system, deteriorating roads and bridges and a subpar airport. Terminal 1 of the Ninoy Aquino International Airport, for example, where most foreign air carriers serving Manila are based and where most foreign visitors to the country arrive, is often featured in lists of the world’s worst airports. In 2011, 2012 and again this year, parts of the airport’s ceiling collapsed, and recently the air-conditioning failed, leaving international travelers sweltering. In April, Mr. Aquino publicly apologized to travelers for the problem. During a World Economic Forum meeting in May, embarrassed airport officials had to use fans to cool things down. The infrastructure problems are felt in other ways as well. Many parts of the Philippines experience regular blackouts, but in the last few months the power failures have hit Manila as well. Energy officials say an insufficient number of power plants, combined with increased demand, is straining the country’s grid. Continue reading the main story Though power is unreliable, it is also among the most expensive in Southeast Asia, said Joms Salvador, secretary general of Gabriela, a women’s rights organization. “In Manila, if you don’t pay your electricity bill, they cut your power,” she said. “There is no safety net for the poor. To pay their power bill, families have to scrimp on food or take children out of school.” She said that women and children were hit hardest by the country’s poor infrastructure, particularly in areas without running water. “In metro Manila communities where we work, if there is no running water, then the women and the children have to fetch the water,” she said. “This is an added burden for them.” Mr. Aquino has repeatedly acknowledged the need to invest in infrastructure, noting in recent speeches that the government had increased spending in this area to 400 billion pesos this year, or about $9.1 billion, from 200 billion pesos in 2011. nytimes/2014/08/04/business/international/strained-infrastructure-in-philippines-erodes-the-nations-growth-prospects.html?partner=yahoofinance&_r=1
Posted on: Tue, 05 Aug 2014 17:02:05 +0000