News Analysis: Infrastructure, energy challenge Philippine economic growth

The Philippines is enjoying a period of Economic Expansion, albeit at a modest scale given the country's lagged-behind infrastructure and energy construction. The Asian Development Bank (ADB) recently predicted that the Philippine GDP will grow 6 percent in 2015.

In the Northern island of Luzon, where the Philippine capital of Metro Manila is situated, the newly-completed North Luzon Expressway (NLEX), the auxiliary Subic-Clark-Tarlac Expressway ( SCTEX), and the Tarlac-Pangasinan-La Union Expressway (TPLEX) have provided a much needed spur in the streamlining of land transportation and Tourism in Northern Luzon.

Currently under construction is the 20 billion pesos (452.19 million U.S. dollars) NLEX-SLEX (South Luzon Expressway) Connector Road, which is an elevated highway to be constructed by the Department of Public Works and Highways (DPWH) above the railroad tracks of the Philippine National Railway (PNR). This will connect NLEX and SLEX and allow vehicles to bypass the traffic of the city centers.

Similarly, Beer and Investment Conglomerate San Miguel Corporation (SMC) in partnership with Citra Metro Manila Tollways Corporation (CMMTC) is also constructing the 26.5 billion peso ( 602 million U.S. dollars) Skyway Stage 3 that connects SLEX and NLEX via the existing elevated highways of Skyway Stages 1 and 2.

Cargo Container trucks will also be able to bypass Manila's city centers once the NLEX-Harbor Link Road connecting Manila's North Harbor when NLEX is completed in 2017 by Metro-Pacific Tollways Corporation (MPTC). Once completed, the NLEX will have a dramatic impact on the lessening of traffic in Manila, saving citizens fuel and time.

The Philippines' privately-owned International Container Terminal Services Incorporated (ICTSI), an International port operator, and operator of the Manila International Container Terminal (MICT) is building a 21-hectare Cargo and Logistical facility in Laguna, South of Metro Manila, that will be linked by both SLEX and the railways of the PNR. This will further decongest MICT and ease the delivery of cargo to large manufacturers located in this area.

These are hopeful and exciting projects for Metro Manila to read on paper. The current reality however, is a much different story.

In 2014, to ease traffic congestion, newly-elected Manila Mayor and former President Joseph Ejercito Estrada banned passenger buses that did not have bus terminals in Manila from entering the city.

Similarly, Estrada instituted a Truck Ban on Cargo Trucks, regulating the hours they could travel through the roads of Manila. This resulted in severe port congestion and delay in the delivery of cargo throughout the National Capital Region (NCR), and causing the prices of some commodities to rise. It did however, greatly reduce traffic in Manila.

It took months, and much logistical adjustments for the Cargo Backlog to diminish. Only in February of this year did the Philippine Government declare the end of the Port Congestion.

Despite the fact that Cargo Trucks are banned from Metro Manila 's North-South Circumferential Highway EDSA 24 hours a day, seven days a week, rush hour traffic remains a daily nightmare for drivers and commuters with huge costs in time and fuel wastage.

To make matters worse, the Metro Rail Transit 3 that traverses EDSA is now overloaded beyond capacity and often breaking down, sometimes on a daily basis. This Light Rail System which began service in November 1999 with 24 Trains, can now only deploy 14-16 trains a day to service well above 500,000 passengers.

In a much delayed effort compounded by two failed biddings and endless legal problems, the Philippine Department of Telecommunications and Communications contracted Dalian Locomotive & Rolling Stock Company Ltd. for the 3.5 billion peso (80 million U.S. dollars) purchase of 48 trains that will begin delivery in August 2015.

Until then, passenger overcrowding will continue with some passengers taking alternate routes via the Light Rail Transit, Light Rail Transit 2, and the railways of the PNR.

Energy is another serious concern for the Philippines' economy.

The expansion of households and business activities has greatly increased demand for electricity from the Philippines' existing power plants, some of which are old, inefficient, and prone to breaking down.

In southern Philippine Island of Mindanao, the problem was particularly acute due to its dependence on hydroelectric power plants that are also old and have less water available to them.

These conditions, combined with the fact that private corporations were hampered in their construction of power generating facilities, usually due to government regulations, had caused daily power outages in Mindanao lasting for eight to twelve hours beginning in 2013. Only in February 2015, did the Department of Energy (DOE) declare a power surplus in Mindanao as some new power plants began operation.

The coming dry season from March to June poses a similar threat to the Northern Island of Luzon. Typically, in hot weather energy demand surges and the DOE is currently uncertain whether power outages can be avoided in this dry season. This has prompted many Filipinos to begin purchasing solar panels, gas and diesel electric generators.

The Philippines faces a bright future and encouraging economic potential. It remains to be seen whether the country can catch up with the demands placed upon its energy and infrastructure sectors. A big factor is whether many facilities such as highways, railways, power plants, ports, and airports can be created or upgraded in time to meet the surging needs of the Philippine Economy. Endi