One of my most notable takeaways from the recent State of the Nation Address (SONA) of President Ferdinand R. Marcos, Jr. was the commitment to continue the infrastructure programs of the previous administration. It was punctuated by a statement by the President that his administration would not stop any projects already in the works. It was also mentioned that there were about 200 projects in the pipeline.

Given the long gestation period of infrastructure building from the time of planning to awarding to land preparation and actual construction, it makes absolute sense to keep continuity in infrastructure projects. Major developments may take more than six years altogether butthere are those, too, that are shorter and that overlap administrations. Funding of these projects will also crossover and must, therefore, be assured that the project returns are realized despite changes in the administration. Otherwise, lenders will be very wary of extending loans to the Philippines.

“Build. Build. Build ” has evolved to “Build Better More”, clearly a play on the new President’s initials of BBM. Frankly, it does sound better, capturing the aspect of quality as much as quantity of projects. The Finance Secretary, Benjamin Diokno, has mentioned that 5 to 6 percent of Gross Domestic Product (GDP) must continue to be allocated to infrastructure. Indeed, these are all very promising. I am hopeful that they will be realized.

Being an archipelago, the need to connect our local government units across the nation is vital to nation building. Better inter-island connectivity goes a long way to improving the productivity and cost efficiency of our local industry, agriculture and services sector such as tourism. Though roads and bridges might be the most number of projects, the development of airports and ports is no less important.

Clearly, the expansion of infrastructure is a critical enabler of mobility that, in turn, is an essential driver of economic growth.The advent of motorization in the country started in the early 2010’s with motor vehicle sales risingat double digit rates, year-on-year. The market peaked in 2017 at close to 475,000 units. In that year, car buyers accelerated their purchases in anticipation of a significant price hike brought by the Tax Reform for Acceleration and Inclusion (TRAIN) Law. Consequently, sales dropped by 15 percent in 2018 before rising 2.5 percent in 2019. Of course, car sales were completely devastated in 2020 and 2021 due to COVID. This year, CAMPI projects a market size of 336,000 units.

Although the traffic in Metro Manila might cause you to disagree, the density of motor vehicles in the Philippines is one of the lowest in Asia. At 41 cars per 1000 people, we are lower than India and Indonesia that have similar per capita GDP levels as us. Malaysia has the highest densityat about 525/1000, followed by Thailand. This means that the Philippines still has a lot of runway to grow its vehicle population in line with increasing economic activity.The expansion of our roads and bridges network will accelerate demand in vehicles, especially for commercial use.

A driver for demand will be the improved access from farm to market or rural to urban centers, made possible by improved infrastructure. With economic growth projected by the new administration to be sustained at 8 percent per annum, surely increased mobility will be an essential enabler.

A new breed of commercial vehicles will be needed to meet the expected rise in business demand, especially from the Micro, Small and Medium Enterprises (MSME) that comprise99.5% of establishments in the Philippines. In addition, a whole new suite of solutions will have to accompany this emergent demand for mobility.

For example, shared logistics solutions – think, Transport Network Vehicle Services (TNVS) for farm goods – and booking apps, are needed to enhance market access by farm owners and agripreneurs. This will, in turn, reduce intervention costs and mark-ups by middle men, thus resulting to higher selling prices for the farmersand lower buying prices for the consumer. Fleet management systems are also necessary to assure the optimal usage and productivity of vehicles in the logistics industry, for instance.As well, new financing schemes and packages will have to be introduced to allow MSME’s to invest in mobility solutions.

This month, Toyota will be launching it’s entry into the field of new mobility. It will be establishing an entirely new enterprise whose main mission is to be a one-stop-shop mobility solutions provider. It aims to complement the traditional automotive manufacturing and sales businessof its parent, Toyota Motor Philippines Corp. This signals the opening salvo in its declared goal of transforming itself from an automotive company to a mobility company.

These are exciting times. New mobiliity is, indeed, rising.

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