Polytechnic University of the Philippines

Sta. Mesa, Manila

Managerial Economics
Formulation of Economic Policy

Mode of Transportation: Delivering Better Quality of Life to Remote Areas like Bansud, Oriental
Mindoro

Submitted by:
Asuncion, Mary Grace R.
Aguilar, Roger L.
Galvan, Roland
Tigas, Jolo Jaimer F.
Vicencio, Lester Kyle M.

BSA 1-15

Submitted to:
Ms. Aldhessa Joyce A. Morillo

March 9, 2019
 Contents

I. Introduction 1

II. Background of the Study 2

III. Formulation of Economic Policy 3

A. Goal _
B. Policy Options _
C. Chosen Policy _

IV. Bibliography _
 Introduction

Our paper is all about formulating the appropriate policy to improve the state of transportation in
remote areas in the Philippines like in Bansud, Oriental Mindoro. Aside from Bansud, Oriental Mindoro,
there are other areas in the Philippines that are marginalized and are hardly accessible. These areas are
usually mountainous terrains and have rough and difficult paths which are tough for vehicles to drive
through. Furthermore, these areas are too far away from cities and commercial centers which adds up to
the problem of transportation. As a result, they are usually deprived of opportunities and access to
primary needs including health care services. Up until now, this problem in transportation still exists as
evidenced by documentaries regarding the hardships being endured by people residing in these areas just
to travel from their place towards their destination.

This economic policy is important because it aims to give hope and shed light over those people
living in these areas and to provide assistance to this marginalized sector by improving the accessibility of
their location. The goal of this paper is to formulate an economic policy that would help remote areas in
the Philippines become more accessible and provide an easier travel for the people living there towards
downtown where most of the opportunities and primary needs including health care services are located.
Included in our policy options are the establishment of cable-car-like mode of transportation, construction
of access roads for land transportation, and the construction of a health center to deliver the health care
services.

The chosen policy was the establishment of the cable car mode of transportation. Overall, it was
more comprehensive compared with the others. It is a faster mode and more environment-friendly since
clearing out a lot of areas of the terrain wouldn't be needed unlike in access road construction. It would
also provide more opportunities for the people other than health care services and other primary needs if
they can go downtown. In some areas, they've already built cable-car-like mode of transportation but it is
both dangerous and tiresome because it is manually operated. In this economic policy, a cable-car-like
mode of transportation will be used but it will be safer, more reliable, and well-maintained.
 Background of the Study

Transportation is one of the foundations of economic and social development of a country or a

community. It is an important key for the productivity of the people through which accessibility and
mobility of them towards their primary needs is a great indicator of how sustainable a community is. In
rural and remote areas, lack of transportation is a crucial problem. As a result, people experience limited
access to services including health, education, and employment. It also affects their quality of life by
somehow shutting down opportunities for them. According to DPWH, the condition of the rural
transportation in the Philippines is poor. The total road network in the Philippines is about 199,000
kilometers. The average road density is 0.67 kilometer/square kilometer. Only about 14% of the roads is
paved. Gravel roads make up about 78% of the total network and the rest are earthen roads. The Little
Baguio of Bansud, Oriental Mindoro is one of the many places in the Philippines who faces the same
problem. It can be traced in every one of them the difficulty to be firm in the same situation every day.
However, seeing those hoping for development gives urge to the researchers to think of an economic
policy that would help them.

The 1993 World Development Report (The World Bank, 1993) illustrates that “lack of physical
infrastructure is the largest obstacle to the use of health services. Distance to health facilities limits
people’s willingness and ability to seek care, particularly when transport is limited’. This was evident to
the people of Bansud as seen the documentary, “Ambulansyang de paa”. We knew that improving mode
of transportation in remote areas is complicated and there are a lot of factors needed to be considered.
One of which is the state and local funding, many rural communities have declining population and with
that a diminished tax base is only available to support funding in maintenance and preservations. Another
one is the accessibility itself, it will be difficult to bring materials and huge machineries for construction.
Lastly, the lack of experts, engineer, and manpower in planning transportation development. To address
these challenges, we would have to choose the best economic policy option that will fit the situation of
the residents of the Little Baguio in Oriental Mindoro.
 Formulation of Economic Policy

A. Goal
There are several reasons as to why there is an urgent need to address the economic issues and
problems faced by the people of Bansud, Oriental Mindoro. These economic issues and problems
include inaccessibility of the place, low quality of living, lack of budget for road and infrastructure
constructions or improvements, the need to improve or establish a stable mode of transportation,
immediate or urgent attention for health issues and problems, and a lot more. Hence, formulation of
economic policy is needed to address these economic problems and issues. First step in formulation
of economic policy is setting the goal. These are some of the goals the researcher had established to
address the economic issues and problems faced by the people of Bansud, Oriental Mindoro:

 Construction of road to make Bansud, Oriental Mindoro accessible;

 Shorten the travel time from urban to rural areas;
 Budget allocation and maximization of the said budget for vehicles, specifically
ambulances;
 Construction of bridges;
 Improve the mode of transportation; and
 Improve the quality of living

these changes can shape more equitable, inclusive societies and improve quality of life for all residents

B. Policy Options

1. Establishment of Cable-Car-Like Mode of Transportation

Cable transport is a broad class of transport modes that have cables. They transport passengers
and goods, often in vehicles called cable cars. The cable may be driven or passive, and items may be
moved by pulling, sliding, sailing, or by drives within the object being moved on cableways. Invented
over a century ago for exploring mountainous regions, aerial cable cars have recently made an appearance
in several big cities, where they are being used as an alternative to conventional urban transport modes.
This technology uses electrically-propelled steel cables to move suspended cars (or cabins) between
terminals at different elevation points. The Department of Transportation (DOTr) is still pushing for the
installation of cable cars as an alternative mode of public transportation. DOTr Secretary Arthur Tugade
said the department is currently in negotiations with various proponents to offer a rate that is similar to
public utility vehicles (PUVs). However, as with any transport project, cities that are considering
investing in a cable car system should carefully consider the advantages and limitations of this
technology:

• Implementation Time and Cost. The unique advantage of cable cars is their ability to climb steep hills at
a fraction of the investment cost of a new tunnel or bridge. They are also often faster to implement than
building new roads, which can appeal to decision-makers looking to show results quickly. Capital costs
can vary widely depending on the context, with most Latin American systems ranging between US$10-25
million per km (Figure 3). Critics say that the jury is out on whether cable cars are investment-worthy,
and point to a cautionary tale from Rio de Janeiro, where financial troubles caused an indefinite
suspension of operations on one of the most expensive urban cable car projects in the developing world.

• Mobility and Accessibility. The recent cable car projects that have received the most attention are those
serving poor hillside neighborhoods, many of which were poorly connected to the rest of the city and
underserved by conventional transport services. Connecting hilly areas to urban centers by aerial cable
cars can bring considerable travel time savings and other socio-economic benefits due to direct linkages
and the absence of constraints from road traffic. However, with an average distance of 800 meters
between stations, cable cars may not serve as many people as bus services, and require users to walk
longer distances to and from the terminals.
• Design and Capacity. The data we compiled from 25 projects in 14 cities shows that urban cable cars
have an average route lengths of 2.7-km, operating speeds of 10 to 20 km per hour, and typical operating
capacity of 1,000-2,000 passengers per hour per direction. The capacity and accessibility depends largely
on the location and design of stations. Based on available data, cable cars are best-suited for areas of
moderate travel demand.
• Operations and Maintenance (O&M). Like any public transport system, cable cars require public
subsidies for operation and maintenance. While it seems like the O&M costs are highly dependent on the
technical features of the system, actual O&M cost data for cable cars is very scarce. Transparent O&M
cost data is key to understanding the sustainability of urban cable cars, so we can only encourage cities
and operators to share this information.
• User Experience and Other Impacts. User satisfaction is critical to the success of a public transport
system. Cable cars have the benefit of giving commuters a “ride with a view,” but they also need high
standards of comfort, safety, and security in order to remain popular over time. A well-designed system
can also improve the quality of urban space around stations and stimulate urban regeneration. While
urban cable car systems are beginning to show positive impacts on the quality of life of users, especially
in previously underserved and inaccessible communities, more work is needed to understand their long-
run costs and impacts. The possibility of developing a new cable car should be considered on a case-by-
case basis as part of a thorough and comprehensive planning process, including an analysis of
alternatives, costs and benefits. Even where cable cars are selected as a viable, lower-cost, and agile
solution, there should be careful attention to its design, network integration, O&M, and long-term
sustainability. Procurement and technology transfer is also key considering that only a handful of cable
car manufacturers in the world have the know-how to build and operate these systems in urban
environments. In any case, cable cars are an exciting and welcome addition to the toolbox of urban
transport planners. These systems, of course, are no alternative to high-capacity mass transit. But they
offer an innovative, economical, and complementary solution that could help many isolated hillside
residents access jobs and opportunities in the city down below.

2. Construction of Access Road for Land Transportation

3. Construction of Health Centers

C. Chosen Policy

Transportation is a central issue in remote areas like in Bangsud, Oriental Mindoro. Residents
have to walk 4-8 hours just to get to the nearest hospital. Thus, one major transportation
environmental issue is vehicle emissions, and the structure of the rural economy is different from
urban areas, requiring different transportation infrastructure. Establishment of cable-car-like as a
mode of transportation would be the most favorable policy among all to address these problems or
issues.

it is powered by electricity, and not by fuels. Therefore, it would not harm or pollute the
environment.

The most favorable and comprehensive economic policy is the establishment of cable-car-
like as a mode of transportation. There are several reasons why it is the most inclusive compared
with others. First, transportation is a central issue in remote areas, and since remote areas have different
are mountainous terrains and have rough and difficult paths, and its structures are different from urban
areas, it requires a different transportation infrastructure. Second, cable car is inexpensive and faster to
implement than building new roads, the need for urgent health care services would be possible if the
residents can go to immediately to the near health centers. Second, cable cars have large capacity ranging
1,000-2,000 passengers per hour per direction. We have seen the issues that the residents in
Bangsud, Oriental Mindoro facing, they have to walk 4-8 hours just to get to the nearest hospital, and
there are a lot of residents in Bangsud that are in critical condition, and should be aid immediately. Lastly,
how this policy stood up, because the major transportation-related economic issue is vehicle
emissions, cable car environment-friendly compared with land transportation, which is subject
to pollution and deforestation. Cable car is powered by electricity, and not by fuels that’s why No
CO2 emissions, if renewable energy is used for electricity and it would not harm or pollute the
environment.
 Bibliography

Slone, Sean (2011). Rural Transportation Needs.

http://knowledgecenter.csg.org/kc/content/rural-transportation-needs
https://blogs.worldbank.org/transport/the-problem-with-rural-transport-is-that-it-is-rural-the-solution-is-
in-branding#