Economist slams chaos brought on by truck ban

Categories: Business Updates

Date Posted: 04 Jul 2014

President Aquino should order the lifting of the truck ban in the City of Manila, which has contributed to the recent rise in consumer prices and has made it more expensive for businesses to operate in the country.

According to one of the country’s top economists, Manila’s truck ban, ordered by former President and city Mayor Joseph Ejercito Estrada, has failed to achieve its desired effects.

“Revoke the ban because it’s just creating traffic in other places and goods aren’t getting delivered,” University of Asia & the Pacific economist Victor Abola said.

Speaking during the First Metro Investment Corp.’s mid-year economic briefing, Abola said Malacañang should step in and force Manila’s local government to lift the truck ban, given the repercussions on the broader economy.

“It’s just throwing everything into chaos,” Abola said.

A study by Citigroup last March showed that losses due to the truck ban could reach as much as P320 billion, or the equivalent of 5 percent of gross domestic product (GDP).

This dwarfs the potential benefits of P30 billion in real terms from the reduced traffic arising from the truck ban.

This new policy bans eight-wheelers and vehicles with a gross weight of above 4,500 kilos from plying Manila’s streets between 5 a.m. and 9 p.m. in an apparent bid to ease traffic as construction starts on key projects such as the roads linking the North and South Luzon expressways.

There is a temporary concession to allow trucks to ply the streets between 10 a.m. and 3 p.m.

Abola said recent reports from importers painted a grim picture. Before the truck ban, it used to take an average of two to three days to unload goods from ships at Manila’s ports.

“Now it’s up to two to four weeks to get their goods brought down to the port,” Abola said. He said these delays have contributed to the tight supply of food in the country, which has pushed average consumer prices up.

Nine analysts polled by the Inquirer this week said inflation could reach at least 4.6 percent in June, accelerating from 4.5 percent in May. If the projections were correct, inflation would be at its highest in two and a half years. Paolo G. Montecillo

Source: http://business.inquirer.net/174075/economist-slams-chaos-brought-on-by-truck-ban#ixzz36UQGcDww

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