* This is my article in BusinessWorld last Tuesday, March 26.
The Market-Oriented Reforms for Efficiency (MORE) series
continues and tackles the air transportation sector. For an archipelago of more
than 7,500 islands and about 20 are big islands with big populations, and air
travel is necessary to hasten the movement of people and goods.
For the Philippines, the good news is that from mere
trickles of less than nine million local and foreign passengers transported in
the past four decades (1986, 1996, 2006 data), things have significantly
improved starting 2010 (global recovery from financial turmoil of 2008-09, then
change of administration from Gloria Arroyo to Benigno Aquino III). That year,
passengers jumped to 22.6 million, then 35 million in 2014 and 40 million in
2016.
The bad news is that compared to our neighbors in East
Asia, we are not dynamic and liberal enough to allow more airline competitors,
and/or we do not have more big airports, including budget terminals, to fly
more passengers. Several neighbors with smaller populations than us — Hong
Kong, Malaysia, Thailand, S. Korea — have more air passengers than the
Philippines (see table).
Note that of the Philippines’ 40 million passengers in
2016, only six million were international visitors (corresponding to 6 million
foreign arrivals,) so some 34 million or 85% were domestic passengers.
We need to further liberalize airline competition in the
country. We also need to expand physical infrastructures like bigger and more
provincial airports, have more budget terminals, more toll roads that link the
airports to big city centers and major tourist destinations.
These will have a combined effect of attracting more
local and foreign fliers, and of hastening commerce, tourism, investments, job
creation, business expansion and economic growth in the country.
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See also:
BWorld 304, MORE tax relief in CIT, March 23, 2019
BWorld 305, MORE electricity supply in East Asia, March 24, 2019
BWorld 306, MORE stock market development, March 26, 2019
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