Home » Features, Ports/Terminals » Manila truck ban a ‘policy failure with unintended consequences’- PIDS

State think tank Philippine Institute for Development Studies (PIDS) sees the Manila daytime truck ban as a policy failure, citing it as one of those seemingly well-intended government policies that had “unintended consequences”.

In a new book titled “Unintended Consequences: The Folly of Uncritical Thinking,” researchers from PIDS discussed why state policies can have unintended consequences and how these consequences can be minimized.

They stressed the importance of critical thinking in designing public policy and programs, noting it was not good for the country “if the voting population and its leaders were to be swayed by arguments that solely appeal to their emotions and instinctive thoughts, unchecked by evidence-based critical analysis.”

In Chapter 2 of the book, titled “Cargo Truck Ban: Bad Timing, Faulty Analysis, Policy Failure,” PIDS president and the chapter’s author Gilberto Llanto noted that the Manila daytime truck ban implemented in 2014 “provided immediate relief to harried commuters and non-truck drivers.”

“A reason for rejoicing was the greater mobility as traffic flowed faster in the city streets during the operating hours of the truck ban. Reduced gas emissions were definitely a benefit,” Llanto added.

On February 4, 2014, the Manila city council passed Ordinance No. 8336, which prohibited trucks with gross weight of 4.5 tons and above from plying the city streets from 5:00 a.m. to 9:00 p.m., from Monday to Saturday, even after opposition from stakeholders and some government agencies. The ordinance underwent several modifications soon after.

Simple but simplistic solution

“However, it turned out that the common sense solution is simple to implement, but it is also simplistic. True, there were private gains, but there were also huge losses to society. The expected benefits seemed obvious, but the unintended consequences seemed not, at least at the time when the ordinance was framed,” Llanto added.

Due to the ban, cargo trucks formed long queues as they waited to get in and out of the Port of Manila. Adding to the problem were the imposition of higher fines for colorum trucks by the Land Transportation Franchising and Regulatory Board, pursuant to Joint Administrative Order No. 01-2014, and the reported “rent-seeking (euphemism for extortionist) traffic enforcers” even when there was a “no apprehension policy.”

Llanto said all these created an artificial shortage of trucks that led to the higher cost of trucking services.

The truck ban also constrained cargo movement, with truckers reporting cases of delay in the delivery of goods to clients.

Businesses incurred production losses and interruptions that caused a temporary shortage of goods in the market. As a consequence, consumers in Metro Manila suffered from increase in commodity prices during the latter part of the third quarter of 2014.

“During the seven-month period of the truck ban, commuters were relieved of traffic jams, but ironically as consumers, they faced higher-priced goods due to delayed delivery and spoilage of goods compounded by the higher cost of trucking services,” Llanto pointed out.

As for producers, the truck ban, together with the assignment of particular routes inside the city for trucks to traverse, constrained the movement of cargo to and from the Port of Manila.

“The irony was that road congestion was relieved, but nobody seemed to have anticipated a negative spillover effect: port congestion,” Llanto said.

He noted, however, that “congestion in the Port of Manila is common especially in the months of July up to December when importation activities are at its peak” due to high consumer demand during the Christmas season.

But port authorities have always managed to ensure that cargoes moved in and out of the port despite the congestion, he said, adding that congestion both on the roads and in the Port of Manila, although inefficient, was tolerable.

Losses and delays

Llanto said port congestion as a result of the truck ban led to delay in cargo releasing. He noted that it was normal for some shipments to face delays in the release of cargo of one day to a month, which happened sometimes because of documentation problems before the truck ban. After the ban, delays took much longer, anywhere from a week to three months.

Such costly delays affected the smooth operation of the logistics chain, and ultimately, the firms in the economic zones, Llanto said. He cited survey data indicating that the cost of shipping a 20-footer or a 40-footer container by truck doubled from P18,000 before the truck ban to P36,000 after the truck ban.

“In the end, the port congestion adversely affected the country’s main supply chain. Remember that the lion’s share of GDP is produced in the NCR and CALABARZON, and that the Port of Manila is the country’s vital link to regional and global production chains,” Llanto pointed out.

“Nobody ever imagined that a simple solution [would] create a serious disruption of the very lifeblood of a growing economy!” Llanto said.

After seven months, the City of Manila on September 13, 2014 lifted the truck ban indefinitely.

A separate report done by a PIDS study team estimated total losses of P43.85 billion due to the seven-moth Manila City truck ban. The estimated economic cost included employment and output losses of manufacturing firms in economic zones net of the benefits of the truck ban (reduced emissions and reduced traffic congestion in the restricted areas).

Llanto concluded that “there is no doubt that huge cargo trucks moving to and out of the City of Manila contribute to road congestion.”

“Imposing a cargo truck ban will provide relief to commuters and non-truck drivers, but it will never solve the road congestion problem.”

He said road congestion is not rooted in the volume of cargo truck movement during the productive daytime hours.

“The problem lies with the fact that those trucks are compelled to use the city streets to get to the Port of Manila, the country’s major seaport,” Llanto said.

The Port of Manila is the country’s most important shipping gateway for both domestic and international trade and is a vital link to regional and global production chains. It is an essential part of the economy’s transport and logistics network that services the needs of consumers and producers alike, especially manufacturing firms at the economic zones south of Manila.

“By necessity, cargo trucks have to be in the streets of Manila regardless of the road congestion they create. As policymakers think about the benefit arising from a truck ban, they should also be aware of the economic costs, especially the unintended consequences of their policy decision. In the particular case of the truck ban, this chapter showed how costly the truck ban was to the country,” Llanto pointed out.

“Does this mean that we should just let go of the problem of road and port congestion? The quick answer is no,” he said, adding that there are immediate, medium-term and long-term solutions to the problem as indicated in the PIDS study, “A System-Wide Study of the Logistics Industry in the Greater Capital Region” published in 2015.

Llanto also cited how another big city, Bangkok, solved its own problem with road and port congestion by building a new port, Laem Chabang, outside the city. – Roumina Pablo

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