The Development of Domestic Water Transportation in the Philippines

Abstract

The study utilizes the interisland transport system of the Philippines to identify the elements and explain the major roles they play in the evolution and development of transport systems. It analyzes the structure of maritime transport as it relates to the broad framework of spatial hierarchical relations. A framework for analyzing the development of a particular transport system is provided. Special attention is given to the role of institutions in effecting changes and in the transformation of geographic space through the adoption of technological innovations and the implementation of policy directives. Interisland shipping services in the country has traditionally been provided by the private sector offering a wide range of shipping services under minimum involvement by the government. Containerization, introduced in 1976 along major routes proved to be a success and palletized RO-RO vessels have gained acceptance on the shorter ferry routes. Although the static transport structure has remained basically the same, both qualitative and quantitative changes have taken place in both the nature and magnitude of flows. The interisland shipping industry has experienced greater involvement by the government over the past two...It has been proclaimed by legislation as a public utility industry under the Public Service Act (Commonwealth Act No. 146) and as amended by Presidential Decree No.1 (Reorganization Decree). Overcapacity, poor safety record and low service standards resulting from division in institutional responsibilities were the major reasons for regulation. Institutional changes came easy under the Martial Law regime but it also allowed political favoritism and the implementation of policy directives which contributed not only to the high costs of interisland shipping but also to the high prices charged to the users of shipping services. The regulated liner sector is dominated by three big shipping companies. Together with several others, these companies are organized into a shipping conference which functions as a cartel in all major and secondary routes. The operations of the cartel has been supported by the regulatory regime through policy directives particularly those which limits competition and the perpetuation of the exceedingly high rigid tariff.