Bus Transport Sector in the Philippines
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Transcript of Bus Transport Sector in the Philippines
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Bus Transport Sector in the Philippines
CUTS-CREW Philippine Institute for Development Studies
Philippines
Population 92,337,852
Land Area (square kilometer) 343,448
Population Density (people/sq km) 269
Poverty Incidence (2009) 20.90%
Per Capita GDP (2011; current US$) 2,370Passenger cars (2010; per 1,000 people) 9
Selected Statistics, Philippines
Public transportation in the Philippines
Bus LRT 1 LRT 2
MRT 3 AUVs Jeepneys Tricycles
Transport and Storage
2008 2009 2010 2011 2012*
a. Land92,311 92,835 89,331 93,051 100,675
a. Water13,816 11,059 12,337 13,781 15,453
a. Air16,516 16,418 17,978 18,592 19,120
a. Storage & services incidental to transport 32,841 31,711 34,443 39,673 43,503
Total155,484 152,023 154,089 165,097 178,750
Gross Value Added in Transportation, 2008-2012 (million pesos, 2000 prices)Source: NSCB, PSY 2013
Percentage of Motor Vehicles, by Type (2008-2013) Source: LTO, NSCB PSY 2013
Year Number of PUBs
Total Number of Motor Vehicles
% share of PUBs to Total Number of
Vehicles2008 49,381 2,181,330
2.3%2009 60,488 2,265,643
2.7%2010 55,674 2,682,643
2.1%2011 55,540 2,457,874
2.3%2012 40,787 2,216,945
1.8%
Number of PUBs traversing Metro Manila (2008-2012) Source: MMDA
What is the state of competition in the bus transport sector?
What is the regulatory and institutional framework governing bus transport? How do they impact competition in the market?
What competition reforms have been implemented? How did the reforms affect:
the market structure? the welfare of consumers and producers?
Research Questions
Bus transportation – governed by the DOTC through its line agencies (LTFRB, LTO)
LTFRB – regulation of entry & exit, bus fares LTO – implementation of LTFRB & other transport policies MMDA, PNP, LGUs – other agencies involved in
implementation of traffic laws & transport regulations NEDA, DPWH – involved in planning and development of
road infrastructure & development policies Regulatory framework – complicated regime where
regulation and enforcement is shared by several agencies
Regulatory Framework in Bus Transport
Regulatory Framework in the Bus Transport Sector
Transportation Planning &
DevelopmentTransport Planning & Regulation
DOTCRegulatory
Policy SettingLTFR
B
Implementa
tionLTO
MMDA
PNP
LGUs
Infrastructure Planning & Development
NEDA DPWH
DOTC Department Order No. 92-587 (1992) Provided the framework for liberalization reform in
transportation including entry & exit, route-setting mechanisms, and fare regulation & adjustment procedures
Reforms imposing moratorium on issuance of new franchises or certificate of public conveyance (CPCs)
Moratorium on issuance of CPCs for provincial buses (2000)
MC 2003-028- nationwide moratorium on new CPCs (2003)
Reforms in bus transport
Analysis of Policy Reform
RouteNumber of operators
Number of buses
Average no. of
bus/operator
Manila EDSA Route 266 3,711 14Manila Non-EDSA Route 128 1,632 13Manila-Provincial North Bound 371 3,684 10Manila-Provincial South-Bound 357 3,568 10TOTAL 1,122 12,595 11
Study AreaAlabang-Fairview 21 341 16Baclaran-Novaliches 17 171 10Manila-Baguio 10 218 22Manila-Lucena 10 132 13TOTAL 58 862 15
RouteNumber of operators
Number of buses
Average no. of bus/operator
Manila EDSA Route 266 3,711 14
Manila Non-EDSA Route 128 1,632 13Manila-Provincial North Bound 371 3,684 10Manila-Provincial South-Bound 357 3,568 10TOTAL 1,122 12,595 11
Study AreaAlabang-Fairview 21 341 16
Baclaran-Novaliches 17 171 10Manila-Baguio 7 240 34Manila-Lucena 8 132 17TOTAL 58 862 15
Number of operators and buses, Manila Routes
The bus transport sector evolved from a highly regulated and concentrated market in the 1970s to a liberalized market composed primarily of small operators
The market operates under a highly complicated regime where regulation and enforcement is shared by several agencies resulting to implementation failures & regulatory capture
Operation of illegal (“colorum”) buses Proliferation of “kabit” system where a bus owner enters the
market through arrangement with an operator with established franchise
Market inefficiency manifests in too many operators and buses resulting to traffic congestion
Findings
Herfindahl-Hirschman Index (HHI) , where si is the market share of firm i in the
route, and N is the number of bus operators. The higher the HHI is compared to 1/N, the less competitive is the bus market in the route
Suggested classification: Substantial competition: Mild competition: 1.4<
Market Structure Indicator
Route HHI 1/HHI (a)
Number of operators(b)
Level of competition
Alabang-Fairview
0.087 11.5 21 substantial
Baclaran-Novaliches
0.070 14.3 17 substantial
Manila-Lucena 0.220 4.5 8 substantial
Manila-Baguio 0.405 2.5 7 substantial
Market Structure of the Bus Transport Sector, Study Area
Secondary Data Price data, fare changes Time series data on market structure Data on substitute modes of transportation (MRT,
LRT fares, ridership & cost of operation) Primary Data
CUTS-CREW matrix
Next Steps: Data for Further Analysis
Appendix Slides
Metro Manila Bus Route Network