Metro Manila traffic jams costing Philippine economy $64 million a day

MANILA, Philippines – Metropolitan Manila’s notorious traffic jams are costing the Philippine economy at least 3 billion pesos ($64 million) a day and infrastructure projects need to be fast-tracked to address the problem, the country’s chief economic planner said Wednesday.

A study in 2012 by the Japan International Cooperation Agency found that time lost by people stuck in traffic and the extra cost of operating vehicles in gridlock in metropolitan Manila and nearby areas amounted to 2.4 billion pesos ($51 million) a day, Economic Planning Secretary Arsenio Balisacan said.

With a bigger population today and more vehicles on the roads, and taking into consideration other costs including to the health of commuters, Balisacan said 3 billion pesos is a conservative estimate. The cost over a year is 0.8 per cent of gross domestic product.

Government infrastructure spending has been delayed, with agencies underspending due to difficulty in complying fast enough with new requirements to make public funding more transparent and corruption-free. Some of the big ticket projects under the public-private partnership program have also encountered bidding problems.

“It makes sense really to fast-tract the completion of all these infrastructure projects because the costs are immense even from a strictly economic point of view,” he told a foreign correspondents’ forum.

The government aims to spend at least 5 per cent of GDP on infrastructure by next year.

Delays in infrastructure and disaster reconstruction projects, and natural hazards such as typhoons and drought due to El Nino — a general warming of parts of the Pacific that changes weather worldwide — are among the domestic risks to the economy’s growth.

Balisacan said the economy is expected to grow 6-6.5 per cent this year, down from previous estimates, but still among the fastest in the region.

He said the El Nino phenomenon affecting parts of the country is expected to last until early next year and has been forecast to be as intense as the El Nino in 1997-1998 which cut agricultural production by 24 per cent.

The government is increasing rice imports and mapping out intervention programs for farmers who will be affected by the drought.

Agriculture comprises 10 to 11 per cent of the Philippine economy and farm workers are 30 per cent of the country’s labour force.