1. Bus Transport Sector in the Philippines
CUTS-CREW
Philippine Institute for Development Studies

2. Selected Statistics, Philippines
Philippines
Population
92,337,852
Land Area (square kilometer)
343,448
Population Density (people/sq km)
269
Poverty Incidence (2009)
20.90%
Per Capita GDP (2011; current US$)
2,370
Passenger cars (2010; per 1,000 people) 9
Selected Statistics, Philippines

3. Public transportation in the Philippines
Bus
LRT 1
LRT 2
MRT 3
AUVs
Jeepneys
Tricycles
Public transportation in the Philippines

4. Transport and Storage
2008
2009
2010
2011
2012*
Land
92,311
92,835
89,331
93,051
100,675
Water
13,816
11,059
12,337
13,781
15,453
Air
16,516
16,418
17,978
18,592
19,120
Storage & services incidental to transport
32,841
31,711
34,443
39,673
43,503
Total
155,484
152,023
154,089
165,097
178,750
Gross Value Added in Transportation, (million pesos, 2000 prices) Source: NSCB, PSY 2013

5. Percentage of Motor Vehicles, by Type (2008-2013) Source: LTO, NSCB PSY 2013

6. Number of PUBs traversing Metro Manila (2008-2012) Source: MMDA
Year
Number of PUBs
Total Number of Motor Vehicles
% share of PUBs to Total Number of Vehicles
2008
49,381
2,181,330
2.3%
2009
60,488
2,265,643
2.7%
2010
55,674
2,682,643
2.1%
2011
55,540
2,457,874
2012
40,787
2,216,945
1.8%
Number of PUBs traversing Metro Manila ( ) Source: MMDA

7. What is the state of competition in the bus transport sector?
What is the regulatory and institutional framework governing bus transport? How do they impact competition in the market?
What competition reforms have been implemented? How did the reforms affect:
the market structure?
the welfare of consumers and producers?
Research Questions

8. Regulatory Framework in Bus Transport
Bus transportation – governed by the DOTC through its line agencies (LTFRB, LTO)
LTFRB – regulation of entry & exit, bus fares
LTO – implementation of LTFRB & other transport policies
MMDA, PNP, LGUs – other agencies involved in implementation of traffic laws & transport regulations
NEDA, DPWH – involved in planning and development of road infrastructure & development policies
Regulatory framework – complicated regime where regulation and enforcement is shared by several agencies
Regulatory Framework in Bus Transport

9. Regulatory Framework in the Bus Transport Sector
Transportation Planning & Development
Transport Planning & Regulation
DOTC
Regulatory Policy Setting
LTFRB
Implementation
LTO
MMDA
PNP
LGUs
Infrastructure Planning & Development
NEDA
DPWH
Regulatory Framework in the Bus Transport Sector

10. Reforms in bus transport
DOTC Department Order No (1992)
Provided the framework for liberalization reform in transportation including entry & exit, route-setting mechanisms, and fare regulation & adjustment procedures
Reforms imposing moratorium on issuance of new franchises or certificate of public conveyance (CPCs)
Moratorium on issuance of CPCs for provincial buses (2000)
MC nationwide moratorium on new CPCs (2003)
Reforms in bus transport

11. Analysis of Policy Reform
Number of operators and buses, Manila Routes
Route
Number of operators
Number of buses
Average no. of bus/operator
Manila EDSA Route
266
3,711 14
Manila Non-EDSA Route
128
1,632 13
Manila-Provincial North Bound
371
3,684 10
Manila-Provincial South-Bound
357
3,568
TOTAL
1,122
12,595 11
Study Area
Alabang-Fairview 21
341 16
Baclaran-Novaliches 17
171
Manila-Baguio
218 22
Manila-Lucena
132 58
862 15
Route
Number of operators
Number of buses
Average no. of bus/operator
Manila EDSA Route
266
3,711 14
Manila Non-EDSA Route
128
1,632 13
Manila-Provincial North Bound
371
3,684 10
Manila-Provincial South-Bound
357
3,568
TOTAL
1,122
12,595 11
Study Area
Alabang-Fairview 21
341 16
Baclaran-Novaliches 17
171
Manila-Baguio 7
240 34
Manila-Lucena 8
132 58
862 15
Analysis of Policy Reform

12. The bus transport sector evolved from a highly regulated and concentrated market in the 1970s to a liberalized market composed primarily of small operators
The market operates under a highly complicated regime where regulation and enforcement is shared by several agencies resulting to implementation failures & regulatory capture
Operation of illegal (“colorum”) buses
Proliferation of “kabit” system where a bus owner enters the market through arrangement with an operator with established franchise
Market inefficiency manifests in too many operators and buses resulting to traffic congestion
Findings

13. Market Structure Indicator
Herfindahl-Hirschman Index (HHI)
𝐻= 𝑖=1 𝑁 𝑠 𝑖 2 , where si is the market share of firm i in the route, and N is the number of bus operators. The higher the HHI is compared to 1/N, the less competitive is the bus market in the route
Suggested classification:
Substantial competition: 1 𝐻𝐻𝐼 ≤# 𝑜𝑓 𝑜𝑝𝑒𝑟𝑎𝑡𝑜𝑟𝑠
Mild competition: 1.4< 1 𝐻𝐻𝐼 <# 𝑜𝑓 𝑜𝑝𝑒𝑟𝑎𝑡𝑜𝑟𝑠
Market Structure Indicator

14. Market Structure of the Bus Transport Sector, Study Area
Route
HHI
1/HHI
(a)
Number of operators
(b)
Level of competition
Alabang-Fairview
0.087
11.5 21
substantial
Baclaran-Novaliches
0.070
14.3 17
Manila-Lucena
0.220
4.5 8
Manila-Baguio
0.405
2.5 7
Market Structure of the Bus Transport Sector, Study Area

15. Next Steps: Data for Further Analysis
Secondary Data
Price data, fare changes
Time series data on market structure
Data on substitute modes of transportation (MRT, LRT fares, ridership & cost of operation)
Primary Data
CUTS-CREW matrix
Next Steps: Data for Further Analysis

16. Appendix Slides

17. Metro Manila Bus Route Network