The Market Monitor Minding the Nation's Business
By Jerry Maglunog
Lack of paved roads is turning off investors, despite the Philippines’s steady economic growth, an official of a Malaysian conglomerate said.
Luzon may have seven expressways, but this is not the case in the Visayas and Mindanao, said the civil engineering expert who has taken part in building ambitious and expensive projects in different parts of the world.
Isaac David, president of MTD Philippines, a Malaysian conglomerate with P15-billion investments in the country, said the Philippines has the poorest road network among the six original members of the Association of Southeast Asian Nations (Asean).
Under a global engineering yardstick, the ideal road network is 1 kilometer for every one square-kilometer of a country’s size. The Philippines is a 300,000-Sqm nation of 100 million people.
David said the country’s road network is only 26.7 percent of its total land area, or a ratio of 1 km of paved road for every 26.7-sqm of the country’s area, data obtained from the Asean Region Comparative Indicators showed.
The Philippines’s road-to-total-land-mass ratio is the lowest in Asean, compared to Thailand, with 80.8 percent; Vietnam, with 66.3 percent; Malaysia, with 78.3 percent, Indonesia, with 56.7 percent; and Singapore, with 100 percent.
“The biggest repercussion is anyone doing business in the country will say it’s very difficult to move goods in the country,” David said.
David also said Western nations are so strict in this global road-network standard and foreign capitalists use it as a major criterion in the investment choice.
He said Malaysia, among other Asean members, has successfully adhered to the global standard of paved roads, having been able to build a 700-km expressway that stretches to Thailand.
He also said that in Malaysia, which has almost the same size as the Philippines, its 78.3-percent good-road ratio equates to 234,900 kms of paved roads.
His computation showed that the Philippines has only about 80,000 kms of good quality roads and that the bad road conditions in many provinces have turned off investors.
What is advisable for the Philippines is to build an expressway like the North-South expressway in Malaysia, so that goods can move expeditiously from one province to another, according to David.
The North-South is the longest expressway in Malaysia with the total length of about 772 kms (480 miles). It runs from Bukit Kayu Hitam in Kedah near the Malaysian-Thai border (connects with Phetkasem Road (Route 4) in Thailand) to Johor Bahru at the southern portion of Peninsular Malaysia and to Singapore.
The expressway links many major cities and towns in western Peninsular Malaysia, acting as the “backbone” of the west coast of the peninsula. It is also known as the PLUS Expressway, named after the highway’s concessionaire, Projek Lebuhraya Utara Selatan Berhad (North South Expressway Project).
The project was built using Malaysia’s own money and not a private-funded project, according to David.
The expressway passes through seven states on the peninsula: Johor, Malacca, Negeri Sembilan, Selangor, Perak, Penang and Kedah. It provides a faster alternative to the old Federal Route 1, thus reducing travelling time between various towns and cities.
The expressway is part of the Asian Highway Network, an ambitious project that will link Malaysia, Thailand and Singapore by road by the end of 2018.
“Those who want to see the Petronas Tower in the morning, then shop at Chatuchak in the afternoon and finally have a late dinner at Clark Quaey can do that three years from now,” the engineer said, referring to the top tourist destinations in the three countries.
Earlier, the Oxford Business Group, a UK-funded think tank, said the Philippines’ bad road network is causing investors to spend more than 10 percent of their operating expenses to freighting.
“Unless you build more roads, ports and expressways no real growth will come in your country,” said Paulius Kuncinas, the entity’s managing editor.