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Friday, July 26, 2024

Growing car sales and shrinking roads; Grab’s unpaid penalties

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Rising automotive sales in the Philippines are a harbinger of further economic growth. They indicate the increasing disposable income of consumers and their optimism on the prospects of the economy. Increased car sales can also mean that consumers may purchase other large-ticket items in the near future, like housing-and-lot packages.

Philippine automotive sales in February this year rose 27 percent to 30,905 units, up from 24,307 units year-on-year. Combined vehicle sales in the first two months of 2023 jumped 34 percent to 60,404 units from 45,069 units a year ago, with passenger car sales rising 25.6 percent to 14,695 from 11,698 units a year ago and those of commercial vehicles climbing 37 percent to 45,709 from 33,371.

The Philippine automotive market is bullish. The industry forecasts the volume to increase 10.4 percent to 408,300 units in 2023 or 10.4 percent higher than the 369,981 units sold in 2022.

Growing car sales, however, will shrink the road system, especially in Metro Manila―and worsen the traffic jam in urban centers in the absence of of new or expanded thoroughfares.

A study published by the Asian Development Bank way back in 2012―Transport Sector Assessment, Strategy, and Road Map―noted that while some of the principal road corridors in Metro Manila had high capacities, traffic volumes were also extremely high.

“As a result, the movement of people, goods, and services is becoming increasingly difficult. Although restrictions on vehicle usage are in place, their effectiveness is decreasing as rates of motorization increase; consequently, congestion in Metro Manila is increasing rapidly and is estimated to cause economic losses equivalent to about 4.6% of GDP,” said the ADB paper.

The traffic congestion in Metro Manila and elsewhere in the country, thus, is expected to get worse even before it gets better with the registration of new vehicles. The new fleet of vehicles competing for the country’s narrow roads will expectedly compound the traffic jams.

Transport services, according to the 2012 ADB paper, consisted mainly of jeepneys (public utility vehicles), taxis, tricycles, and pedicabs that are privately owned and operated. “In 2010, taxis comprised 667,424 (35 percent) of the 1.9 million vehicles in Metro Manila, and half of the 6.6 million vehicles in the country were motorcycles,” noted the ADB.

The Metropolitan Manila Development Authority, meanwhile, has estimated that about half a million vehicles were added to the streets of the capital region during the two-year pandemic period. The agency noted that there were 247,527 private four-wheel vehicles that plied EDSA every day.

The increasing vehicle sales will certainly add to the nightmare of commuters in EDSA and elsewhere.

It will be more convenient and time-saving to go on commuter trains than driving a car through the city, as what travelers experience in Hong Kong, Tokyo, Singapore and other megalopolises in Asia.


Singaporean ride-hailing app Grab is not yet off the hook, as it likes to believe it. It may face another round of fines, having not fully complied with the P25-million refund ordered by the Philippine Competition Commission for overpricing customers in 2019.

Grab has settled just 70 percent of the refund due to its riders, which PCC OIC-Director Ivy Medina confirmed in a recent press briefing.

“The PCC has found that Grab has not yet fully refunded all of the amounts that they are supposed to have given to the riders,” says Medina

“The commission is now considering whether or not the circumstances or the reasons for which that refund was not yet fully paid to consumers would merit another fine to be imposed on Grab,” she warned. The refund is separate from the P40-million fine that the PCC wants to collect from Grab following its failure to fulfill its price commitments.

The partial payment of the fine has prompted the PCC to ask Congress for more teeth in enforcing the antitrust provisions of the Philippine Competition Act to avoid monopolistic acts. But Marikina 2nd district Rep. Stella Quimbo, in a previous Congressional hearing, said the PCC had the power to investigate Grab Philippines about its abuse of dominance.

Grab’s aggrieved passengers, meanwhile, has found an ally in Senator Grace Poe. The lady lawmaker noted that Grab had a monopoly of the Transportation Network Vehicle Service sector, leaving passengers with little choice.

Grab, according to her, bolstered its dominance of the market when it entered the motorcycle taxi operations business after acquiring MOVEIT, one of three accredited motorcycle taxi operators in the country. The acquisition has emboldened Grab to raise it fares or implement price surges that consumers cannot contest in the absence of a real competitor.

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