The land transport sector is an important contributor to economic growth. It provides mobility to businesses and the labor force and is vital in keeping the country’s trade and commerce by transporting the products of several industries, particularly those of the agriculture and manufacturing sectors. In addition to serving the agriculture and industry sectors, land transport also fuels the development of tourism and helps facilitate the inflow of investments, according to the Institute for the Development and Econometric Analysis, Inc. (IDEA).
Furthermore, it reports that “broadly defined, the land transport sector includes the transport of passengers and freight by land involving any type of vehicle. Specifically, it involves bus line operations, transport via railways, operation of freight road transport, operation of smaller vehicles such as public utility cars and taxicabs, jeepneys and Asian utility vehicles (AUVs), tricycles and pedicabs, and the operation of chartered buses and cars such as tourist buses and rent-a-cars. The land transport industry has maintained strong linkages with other sectors of the economy. The automotive industry accounts for a considerable bulk of the industry’s initial and fixed costs, while the energy sector accounts for the largest portion of the industry’s operational and variable costs.”
Meanwhile, the Land Transportation and Franchising Regulatory Board (LTFRB) has the authority to intervene in the issuances of franchises to transport operators. The government boards set certain environmental and safety standards, as well as other requirements such as gas emission tests and accident insurance that the operators need to satisfy before they are allowed to operate.
According to IDEA, “for more than a decade, the gross value added (GVA) of the land transport sector has generally increased before the slump experienced in 2005 (see Fig.1). Before 2005, the land transport sector had grown at an average rate of 3.5% annually. However, in 2005, the sector’s output declined by 3.8%, following a year that posted the highest growth in output of 6.4%. The land transport sector has since recovered: in 2007, the sector’s GVA grew by 5.6% to Php36.15 billion from Php34.23 billion in the previous year”.
Overall, it was said that the land transport sub-sector is the largest contributor to the output of the Transport and Storage sector. From 64.7% in 1990, the land transport sector now accounts for 69.5% of the total output of the Transport and Storage sector.
The top five revenue earners in 2007 for the land transport industry are Fast Distribution Corporation, Victory Liner, Tri-Solid Movers Services, Inc., CS and T Subic, Inc., and Pangasinan Five Star Bus Co. Inc. Fast Distribution Corporation, which rents out trucks for freight transport, posted the highest revenue in 2007 with Php2.46 billion.
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