Advertisement

Inflation in transportation sector

Font Size
Bienvenido S. Oplas, Jr.

My Cup Of Liberty

I regularly write on the monthly inflation rates of East Asian economies, and since 2018 until May 2019, the Philippines has been the “inflation valedictorian” of the region because our inflation rate is nearly two to five times those of our neighbors.

Then I checked the country’s inflation by commodity groups and by region. For 2019 Year to Date (YTD, January-May), these commodity groups did not have big difference between Metro Manila and Philippine inflation rates: food and non-alcoholic beverages; clothing and footwear; housing, water, electricity, gas; furnishing, household equipment and maintenance; health; communication; recreation and culture; and, restaurant and miscellaneous goods and services.

Three commodity groups have big difference, considered “outliers,” in Metro Manila versus the national this year (see table).

Inflation is lower in Metro Manila compared to overall Philippines for alcoholic beverages and tobacco — perhaps there is more smuggled tobacco and people shift to local drinks in the provinces. But inflation is higher in Metro Manila for transport and education, meaning Metro people endure more expensive mobility because of the insufficient supply of safe, convenient transportation so they have to drive their cars or motorcycles more often than necessary; and deflation in education in 2018 has ended and reversed.

When I was in Cebu City last April with my two daughters, among the things I noticed there was the difficulty and inconvenience of getting Transport Network Vehicle Service (TNVS) cars, and the long waiting time, so I was moving via taxi. And when I was in Bacolod City last December, the same thing — there were insufficient TNVS cars. At least I had nieces there who gave me rides.




It turns out that in Cebu, the Land Transportation Franchising and Regulatory Board (LTFRB) originally accredited 3,000 TNVS, but it wants to slash this number to half. For a big city like Metro Cebu (including the cities of Lapu-lapu and Mandaue), having only 1,500 TNVS would mean long waiting times, more inconvenience, and higher fares for people who want TNVS quality service.

And in Bacolod, around there are 500 TNVS, and less than 10% of these were granted the needed Provisional Authority (PA) and Certificate of Public Convenience (CPC) by the LTFRB, which does not act or grant their PA and CPC applications.

I saw the letter to President Rodrigo R. Duterte by Primo Morillo, Convenor of the TNVS Passenger Forum, an organization of largely young urban professionals who travel either by TNVS or use their own vehicles. He raised many valid issues from the perspectives of both commuters and car owners who want to share a ride with commuters in a transparent, technology-enabled and market-based pricing system.

The main mandate of the LTFRB is primarily the safety and convenience of passengers and commuters, and the availability of various ride options from entrepreneurs. Many passengers have spoken — they want more TNVS because of safety, convenience, and transparency factors. Why is the LTFRB going against the wishes of the commuters by reducing instead of raising the supply of TNVS?

Some taxi companies have improved their services because of more competition from TNVS, so why restrict further competition? The drivers and owners of these TNVS are also Filipinos, not foreigners; they are mostly micro- and small entrepreneurs like OFWs, not medium or big companies.

The LTFRB should not become a Land Transportation Favoritism and Restrictions Board favoring the taxi and restricting competition via TNVS. Passengers and the public benefit from more choices and options, in service quality and pricing. Inflation in transportation can be tamed by more competition.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com