‘Infrastructure gap’ threatens to hamper economic growth

More than half a million Filipino commuters have to endure hours in long queues daily to use the Metro Rail Transit (MRT) to get to work.

But to commute by car is worse, with huge traffic jams clogging the streets of Manila.

Development of infrastructure in the Philippines has not kept pace with economic growth, and now that lack is threatening to derail further economic gains.

Traffic is made worse by many road building works going on at once, and frequent heavy rains that soak the capital’s streets.

The 16.5 kilometer-long MRT Line 3 railway, along Epifanio De Los Santos Avenue (EDSA), Manila’s main thoroughfare, currently services 570,000 to 600,000 passengers per day – double its capacity of only 250,000.

It is also plagued by mechanical and technical problems on a regular basis.

The duration of the train ride itself is just 10 to 15 minutes, but the queue to get into the station sometimes stretches as long as a kilometer.

The transportation problems in Manila highlight how developing economies in Asia face a shortage of basic facilities so severe that it threatens to hold back growth and living standards.

The Philippines ranks 95th out of 144 countries on a World Economic Forum survey of infrastructure quality.

The government is trying to address the situation.

Its 2011-16 development plan promises to reduce the number of homes without access to power and running water, and to build ports, railways, power plants, and cargo terminals.

President Benigno Aquino III in May approved 64 billion pesos in spending for seven projects, including more commuter rail lines in Manila, upgrading 339 kilometers of national roads, and irrigation for 70,000 hectares of farmland.

Benjamin Diokno, an economist at the University of the Philippines and a former Cabinet Secretary, has been advocating that the government spend at least 500 to 600 billion pesos every year on infrastructure to make up for past neglect.

“We need to address this congestion because it …. does a tremendous cost to the economy,” Diokno told AP.

Before the 1997 Asian financial crisis, public works spending in many developing Asian economies was equal to 6 to 8 percent of annual economic output.

Post-crisis, that tumbled to as little as 2 percent.

It dipped below 1 percent in the Philippines in 2010, less than half the level the Asian Development Bank says is needed to support growth at current levels. Associated Press