CUTS-CREW Philippines
Diagnostic Country Report
Methodology for the
Passenger Transport Sector (Bus)
Structure of Analysis
1. Identification of components of competition reform
2. Institutional responsibility in reform
implementation and actual performance review
▫
Coordination issues across agencies (DOTC, LTO,
LTFRB, MMDA) and government units (LGUs)
3. Impact of competition reforms on market structure
4. Impact of competition reform on consumer and
producer welfare
5. Assessment of consumer and producer concerns
6. Further suggested reform initiatives and likely
benefits
Methodology
1.
2.
3.
4.
DESK BASED RESEARCH
FIELD WORK
ANALYSIS
REPORT WRITING
Step 1: Desk-based Research
i. Thorough literature review, discussion with expert of
competition policy, reform initiatives, previous
studies
ii. Collection and analysis of secondary data
iii.Stakeholder identification
iv.Selection of impact/welfare issues to be covered ,
hypothesis formation
v. Selection of variables on which data to be collected,
identification of data sources
vi.Development of questions and discussion points for
Focus Group Discussion (FGD)
vii.Development of guidelines for in-depth interview
STEP 2: FIELD WORK
i. Data collection on price, routes, alternates, etc.
ii. FGD
iii. In-depth interview
STEP 3: ANALYSIS
i. Quantitative PLUS Qualitative
ii. Impact of reform
iii. Changes over time
iv. Comparison across city/ routes
STEP 4: REPORT WRITING
Competition Reform and Welfare
Analysis: Producer Welfare
• EASE OF ENTRY FOR PRIVATE OPERATORS
 At policy level as well as industry structure level (e.g. issues like
“colorum” operators)
• FREEDOM AND TRANSPARENCY IN OPERATIONAL DECISION
 Process of fare determination
 Process of route identification
 Decision on number of buses to ply on each route, across different time
points, etc.
 Price adjustment in response to input cost (fuel price, financing cost,
etc.) changes
Competition Reform and Welfare
Analysis: Producer Welfare (cont)
• COMPETITIVE NEUTRALITY
 Whether level playing field exists for all players
• PREDICTABILITY OF REGULATORY ACTIONS, GOVERNMENT
POLICY FORMULATION AND INTERVENTION, ETC.
• EASE OF DOING BUSINESS
 Whether the business is subject to significant regulatory, procedural, etc.
burden hampering the productivity
• ACCESS TO ESSENTIAL SERVICES
▫ E.g. road infrastructure, finance, etc.
Competition Reform and Welfare
Analysis: Consumer Welfare
• AVAILABILITY OF BUS TRANSPORT
o Coverage by bus transport as a share of total passenger movement
o Overall as well as frequency across different hours of the day/week
o Certainty of availability
o Demand-supply gap
• PRICE SETTING MECHANISM
o Evaluation of the price setting mechanism in terms of its fairness
towards the end consumers vis-à-vis the transport operators’ interest
• PRICE DYNAMICS
o The bus fare dynamics in actual/historical experience and its welfare
impact
Competition Reform and Welfare
Analysis: Consumer Welfare (cont)
• PRICE-QUALITY INTERACTION
o Choice to consumers in terms of alternate bus transport modes
available
o Comparative evaluation of pricing structure of alternate modes
• SERVICES AVAILABLE TO CERTAIN SECTIONS OF THE
SOCIETY
• ENVIRONMENTAL STANDARDS FORMULATION AND
IMPLEMENTATION
• PASSENGER SAFETY STANDARDS
Competition Reform and Welfare
Analysis: Consumer Welfare (cont)
• TIME DELAYS DUE TO TRAFFIC CONGESTION
o Productivity losses of consumers due to time delays
o Congestion as the population of vehicles (including buses) grows faster
than the capacity growth of roads
o Current situation of oversupply of buses: evaluation not just by
assessing the total number franchises issued but also by looking at
oversupply "where" and "at what time"
 e.g., oversupply in EDSA during the morning peak periods and afternoon
peak periods
o Comparative evaluation of alternate mode, i.e., MRT-3
 Erosion of the time-saving advantage of the alternative as passenger growth
outpaced the capacity of the rail system
Study Area: Bus Transport
Bus transport
• Intra-city: Metro Manila
▫ Muntinlupa City-Makati City-Quezon CityCommonwealth/Lagro via EDSA
▫ OR:
▫ Baclaran (Pasay City) to Bagong Silang (Quezon City) via
EDSA
• Inter-city: City in CALABARZON to Metro Manila
▫ Origin (Rizal): Antipolo City- Pasig City- Makati City
and
▫ Origin (Cavite): Dasmarinas City-Paranaque CityMakati City
Sampling Frame
Bus transport
In-depth Interview
FGD
Intra city
Input Suppliers
(petrol,diesel)
Bus Operators: Public &
Private*
State Government
Officials
Inter city
Input Suppliers
(petrol,diesel)
Bus Operators: Public &
Private*
State Government
Officials
Total
*: distribution of 10 samples into public and private operators will vary in
accordance to the nature of local transport network.
Field work
Data collection - Primary
• No Field/Perception Survey
▫ Manpower and budget constraints
• In depth interview
 Guideline based open ended discussion
• Focus Group Discussions
Analysis
• Competition Policy Reforms:
▫ 2005 Moratorium on issuing bus franchises
(DOTC Department Order No. 2005-57)
▫ Coordination issues among DOTC, LTO, LTFRB,
MMDA and LGUs
Analysis
• Quantitative (estimate producer surplus and
consumer surplus)
▫ Comparison across time: impact on select
variables pre and post reform
 before and after the 2005 moratorium on issuing bus franchises
▫ Comparison across city, route
▫ Impact comparison across different reform
initiatives
▫ Possible Cost-benefit analysis (?)
• Qualitative
▫ FGD
▫ In depth interview of relevant stakeholders