Learning from Japan and improving Philippine infrastructure

In the last 15 years, the Philippines’ population density has gone up by more than a third or by 32%. According to figures reported by the Philippine Statistics Authority, the National Capital Region (NCR) or Metro Manila is the most densely populated among all regions of the country. In Metro Manila, close to 20,000 people (19,988 to be exact) live in each square kilometer of land. This jam-packed rate is 60 times that of the national average.

In the next few years, the population density rate is expected to increase even further, as the NCR’s urban areas continue their sprawl into the adjacent regions. As we know, Metro Manila is one of the fastest-growing megacities in the Asia-Pacific region, and a third of our country’s gross domestic product (GDP) is produced here. As this continues, we may even see our Mega Manila transform in to Mega “Mega Manila.”

Part and parcel of this density, combined with weak infrastructure, is the problem of congestion. We all see the worsening case of traffic congestion daily, thanks to regular gridlocks on the main roads. Roads aside, all of our railway lines have exceeded their designed capacities. The MRT, for example, is operating at 142% of its designed capacity. It bears repeating that the traffic fiasco has taken its toll on the capital, costing the Philippine economy some P2.4 billion daily. This estimate, from the Japan International Cooperation Agency (JICA), does not even measure the deterioration in our quality of life.

Thankfully, the administration has approached the traffic problem with some sense of urgency. Its agencies have approved big-ticket projects at a breakneck speed, bringing the total approved projects under this administration to 35. The total cost of these projects amounts to around P1.2 trillion. In its latest meeting two weeks ago, the National Economic Development Authority (NEDA) Board approved the Metro Manila Subway Project, the centerpiece of its Build, Build, Build campaign. NEDA Secretary Ernesto Pernia hailed it as the “project of the century for the Philippines.”

The project, which will be the first subway system in the country, aims to connect Mindanao Avenue to the Ninoy Aquino International Airport, passing through eleven other stops along the way. The first phase of the project requires an estimated P355.6 billion, will be financed through an Official Development Assistance (ODA) loan from Japan. Construction is scheduled to commence in early in 2018 and the first phase is up for completion by the final quarter of 2024. If successful, the subway line could accommodate 350,000 passengers daily, a welcome relief for all commuters. Just for comparison, the overburdened MRT line ferries 460,000 passengers a day, operating at 142% capacity. The subway would help to relieve the MRT and then some.

ODAs have been a useful resource for governments in implementing its priority projects. Under the Duterte administration, 23 out of the 35 NEDA-Board approved projects will reportedly be funded by ODA loans, totaling to P1.074 trillion. Japan has been one of the country’s longest developing partners, and for the first semester of the 2017, Japan still remains the Philippines’ top ODA partner.

Under the special terms for economic partnership, loans from Japan will have an interest rate of 0.1%, payable in 40 years. Japan has also been tapped to finance the 106-kilometer Manila-Clark Railway Project, which is the north line of the North-South Commuter Railway Project, and the Cavite Flood Industrial Management, among others.

Our country can tap Japan’s expertise and technology.

After all, it has some lessons to share from its own experience with the Greater Tokyo Area. Greater Tokyo has a population density of about 14,746 people per square kilometer. The metropolis houses a total of 35 million people, and is supposed to be the biggest urban area in the world. Yet, while Tokyo has so many people, it is able to move them efficiently throughout the metropolis thanks to its system of railway lines and busses.

Of course, there are still kinks to be ironed out. The lengthening project pipeline has raised some concerns. By some accounts, the pre-feasibility study for the Metro Manila subway has already been adopted into a full-blown feasibility study. Some experts have also questioned the change in alignment, noting that the proposed stations divert to FTI after passing through Bonifacio Global City, and does not pass through the Ortigas and Ayala business districts. The government should be proactive about addressing these concerns as part of its drive to reassure the public that it is using the ODA modality wisely — no matter the funder.

Now that the projects have been approved, we will need to see how the government manages the transformation of these projects from paper into concrete and steel. In the process, the administration should continue to ensure all steps are on solid ground.

After all, we don’t want to risk throwing good money after bad or find ourselves trapped in years of court cases or paying back loans on nonproductive projects. The necessary precautions being in place, all of this activity on improving Philippine infrastructure should be a welcome development for all of us. Our expectations are high for these projects.

This article was originally published in BusinessWorld.