Analysis of Roll-On/Roll-Off Transport System:
Its Impact in Western Visayas in Terms of
Agriculture, Tourism, Trade and Industry
An Undergraduate Thesis
Presented to the
Economics Department
Faculty of Arts and Letters
University of Santo Tomas
In Partial Fulfillment of the
Requirements for the Degree
Bachelor of Arts Major in Economics
By
Abulkhayr M. Macabato Jr.
Michael Kevin P. Bayona
Ephraim Jerome S. Lubo
February 2013
APPROVAL SHEET
This thesis entitled: Analysis of Roll-On/Roll-Off Transport System: Its Impact in Western Visayas in Terms of Agriculture, Tourism, Trade and Industry, prepared and submitted by Abulkhayr M. Macabato Jr., Michael Kevin P. Bayona, Ephraim Jerome S. Lubohas been approved and accepted in partial fulfillment of the requirements for the degree, BACHELOR OF ARTS IN ECONOMICS.
______
Leah V. Estacio, M.A.E.
Adviser
PANEL OF EXAMINEES
Approved by the Committee on Oral Examination with the grade of ______.
______
Emmanuel Lopez, Ph.D.
Chairman
______ Alvin Ang, Ph.D. Carlos Manapat, Ph. D.
Panel Member Panel Member
ACKNOWLEDGEMENT
The researchers would like to express their sincerest appreciation and gratitude to the following persons who have greatly helped in the completion of this research:
Prof. Leah Estaciofor patiently advising and guiding their research study until the end.
Dr. Alvin Angfor giving them extra guidance and different ideas on how to start their research topic.
Ate Charlotte who helped them hugely in the initial parts of their research study and enlightening the researchers about proper formatting.
4eco1block mates for trading great ideas and information about how to properly execute some research plans.
Family and friends for giving moral, spiritual, and emotional support to the researchers.
Above all else, the researchers would like to thank God who gave them the opportunity to learn and stand up again through many sleepless nights and days, and overcoming different challenges in completing this research study.
ABSTRACT
Development in transportation is very necessary because it affects social and economic activities like distribution of goods, tourism, manufacturing, trading and etc. Any kind of delay in transportation would lead to an imbalance process of distribution and consumption unless there is product security. Numbers of tourist visits can be influenced by how efficient transportation is as the satisfaction of travelers must be met. Trade and Industry are one of the sectors that hugely depend on transportation because since ancient times, people try to solve and make transportation efficient. In addition, innovations should be considered as a way to promote technological and strategic construction of new modes of transportation. Costs of transportation contribute to the economic value of goods or resources, tourists’ choice of destination and the agricultural output distributed to different destinations. The researchers have seen the need to conduct a study about the necessity of efficient transportation in the country.
Table of Contents
Abstract______4
Lists of Abbreviations______8
Chapter 1. Introduction______10
Background of the Study______10
Statement of the Problem______12
Hypotheses______13
Objectives of the Study______14
Scope and Limitation______15
Importance of the Study______16
Theoretical Framework______17
Conceptual Framework______20
Definition of terms______21
Chapter 2. Review of Related Literature______25
Current Status of RO-RO Transport System______25
Assessment of RO-RO operation______31
Western Nautical Route and Western Visayas’ Agriculture, Tourism, Trade & Industry______33
Importance of RO-RO Transportation System______43
Chapter 3. Research Methodology______49
Research Design______49
Locale of the Study______50
Procedure______50
Instrumentation and Data Collection______51
Tools of Data Analysis______51
Chapter 4. Presentation, Interpretation, and Analysis of Data______53
Regional Development______53
Agricultural Development______55
Tourism Development______57
Development in Industry______59
Development in Trade______61
Chapter 5. Summary, Conclusion, and Recommendation______64
Summary______64
Conclusion______64
Recommendation______65
Appendix A – Bibliography______67
Appendix B - Gross Regional Domestic Product (Western Visayas: In Thousand Pesos)______70
Appendix C – Agricultural Output (Western Visayas: In Thousand Pesos) ______71
Appendix D – Tourists Arrival (Domestic & Foreign) ______72
Appendix E – Output of Industry (Western Visayas:
In Thousand Pesos) ______73
Appendix F – Output of Trade (Western Visayas:
In Thousand Pesos)______74
Lists of Abbreviations
RRTS - Roll-On Roll-Off Transport System
SRNH - Strong Republic Nautical Highways
NEDA - National Economic and Development Authority
NSCB - National Statistics Coordination Board
DA - Department of Agriculture
DAR - Department of Agrarian Reform
DOT - Department of Tourism
DTI - Department of Trade and Industry
DOTC - Department of Transportation and Communication
BAS - Bureau of Agricultural Statistics
PPA - Philippines Ports Authority
PMO - Port Management Office
PCG - Philippine Coast Guard
BREADCO - Bacolod Real Estate Development Corporation
UNESCO - United Nations Educational, Scientific, and Cultural Organization
CRC - Center for Research Communication
GRDP - Gross Regional Domestic Product
JICA - Japan International Cooperation Agency
USAID - United States Agency for International Development
Chapter 1
INTRODUCTION
This chapter is intended to give an explanation about the backgound of the study, research problem, and the hypothesis. The researchers will also present the objectives of the study as well as to stress the relevance of the study and its scope and limitation. The theoretical and conceptual framework of the study will be presented in the latter part of this chapter.
- Background of the Study
One of the disadvantageous geographical characteristic of the Philippines is its archipelagic features. Hence, trade and commerce became very dependent on modes of transportation and its development plays a crucial role in the process of different economic activities in the country. Although Philippines is rich in different kinds of natural resources, the scattered islands in the country made this resources hard to be disseminated in the whole country. Hence, proper allocation or distribution of raw products or different resources is the main problem of inefficient transportation. High income disparity between urban and rural areas in the Philippines shows that there is a slow development in rural areas in the country and there is a need to build network between this two regions in order to cut the barriers to development. Compared to other countries’ economic transportation, the Philippine government is obliged to build infrastructures that will connect the islands of the country otherwise the country will suffer problems brought by inefficient transportation while other countries concentrates on land transportation which is an easier and less costly compared to sea transportation. Philippines is also rich and gifted of various tourist destinations yet transportation also appears to have a role in tourism sector such that tourists consider the travel time and travel cost of visiting a specific destination.
Under the issuance of Executive Order 170, the government promoted “Strong Republic Nautical Highway” or what is famously called RO-RO policy (Roll-on/Roll-off) by former President Gloria Macapagal Arroyo in 2003 and is one of her administration’s major legacies. It is a 919-kilometer nautical highway that will connect 17 cities, towns, and islands throughout Luzon, Visayas, and Mindanao. This project also reduces an estimated 17 hours of travel time to a shorter time that will help boost our economy by allowing easier accessibility and distribution of goods, easier tourist travel, and easier trading. This improvement plan in transportation aims to develop agriculture, trade, and tourism by making transportation cost lower than the usual.
The interconnection of islands by constructing ports throughout the country can make transportation convenient for different sectors of our economy and with lower transportation cost, potential investment opportunities will be created. Islands will be connected through RO-RO passengers, cargo vessels, and different modes of transportation that can be carried by RO-RO vessels.
With the aim of this RO-RO Project to create opportunities and economic development in different regions of the country, this research study aims analyze the impact of implementing this kind of sea transportation system. Hence, the researchers conducted this study that evaluated the program during the term of former President Arroyo of years from 1995-2010.
The researchers will conduct a study of the RO-RO’s impact on agriculture industry, tourism, industry and trade in the region of Western Visayas (Region 6) which is a part of western route of the nautical highway.
- Statement of the Problem
- Main Problem:
- Does Western Visayas achieve regional development through the years as RRTS was established?
- What is the analysis of RO-RO transportation system in terms of Agriculture, Tourism, Industry and Trade?
- Sub-Problem:
a.)Does RO-RO transportation system contributed to the regional development in Western Visayas?
b.)Does agricultural industry benefit from RO-RO transportation system?
c.)Does tourism industry benefit from RO-RO transportation system?
d.)Does trade and industry benefit from RO-RO transportation system?
- Hypotheses
The following hypotheses were conformed for the research study of SRNH:
Ho: There is no significant difference between GRDP (Pre-RO-RO) and GRDP (RO-RO) or there is a significant decrease in GRDP of Western Visayas.
H1: There is a significant increase in GRDP of Western Visayas.
Ho: There is no significant difference between Agricultural Output (Pre-RO-RO) and Agricultural Output (RO-RO) or there is a significant decrease in Agricultural Output of Western Visayas.
H1: There is a significant increase in Agricultural Output of Western Visayas.
Ho: There is no significant difference between Tourist visits (Pre-RO-RO) and Tourist visits (RO-RO) or there is a significant decrease in Tourist visits of Western Visayas.
H1: There is a significant increase in Tourist visits of Western Visayas.
Ho: There is no significant difference between Industry output (Pre-RO-RO) and Industry output (RO-RO) or there is a significant decrease in Industry output of Western Visayas.
H1: There is a significant increase in Industry output of Western Visayas.
Ho: There is no significant difference between output of Trade (Pre-RO-RO) and output of Trade (RO-RO) or there is a significant decrease in output of Trade of Western Visayas.
H1: There is a significant increase in output of Trade of Western Visayas
- Objectives of the Study
The purpose of this study is to determine and evaluate how Strong Republic Nautical Highway known as RO-RO transport system has affected Western Visayas. The researchers shall conduct an empirical study through the use of statistical tool analysis with data which will be gathered from various government agencies and institutions, hence, we would be able to identify if there was any development happened in Agriculture, Tourism, Industry and Trade and the whole region as well. This research study has necessary objectives that should be achieved by the researcher:
1. The research study should identify the factors needed to operate RO-RO transportation.
2. The research study should know if there is an efficient application of the project in terms of regional development.
3. The researchers must compare the economic status of Western Visayas between pre-RO-RO and post-RO-RO era.
4. The research study should identify the problems of RO-RO project.
5. The researcher must provide necessary recommendations about the existing problems of RO-RO project.
The researcher should use secondary data in order to achieve these objectives.
- Scope and Limitations
This research study will cover operations of RRTS in Western Visayas. The study of this regional development includes primarily agricultural, tourism, industry and trading activities. The researchers chose Western Visayas because it became strategic in its geographical location since it is located in the middle of the western nautical highway route of SRNH. Also in terms of agriculture, Negros Occidental is considered as the “Sugarbowl of the Phillippines” and most of the agricultural products of Western Visayas will come mainly from this place. Another thing is there are many tourist spots located in Western Visayas such as the famous “Boracay Island” where many tourists from inside and outside the country were flocking together. ” Such thing made the research group to be more interested in conducting the research study of the impact of RO-RO ports in the regional development of Western Visayas
- Importance of the study
This study will be significant since it should determine if there was a regional development that occurred in region 6. In addition, it will be significant because it will analyze if there was an efficient implementation of RO-RO project in Region VI in terms of agriculture, tourism, and trade and industry sector by analyzing their improvement in the past several years.
Moreover, this study will be helpful to the general welfare of the people in Region VI and its regional economic growth awareness. It will also serve as a future reference for researchers that will also conduct their research that are related to the topic. And more importantly, the study will educate the people that are benefiting to the RO-RO transport system, most especially the investors that are seeking for a place to invest their or build their business.
- Theoretical Framework
This research study deals with the efficient distribution of agricultural products, number of tourist travel, and activities of industry and trading throughout various destinations using sea transportation. Visayas is mainly composed of island-provinces where various agricultural products is being produced and traded predominantly via sea transportation. Also tourists travel around the area to visit various tourist destinations. Another economic area that should be considered is Industry and Trade which depends hugely on transportation. Prior to reforms of maritime transportation, market prices of traded products are affected by transport cost and inefficiencies in transporting the products. Since transport cost is higher before, tourist visits also decreases.
The researchers have best analyzed and studied the “Theory of Transportation” which was developed by French mathematician GaspardMonge(Carlier, 2010).
“(T (X) ϵ B represents the destination of the element of mass initially located at x ϵ A) (Carlier, 2010).”
T (Transport Plan):
“Gaspard Monge first considered the problem of “rembalis et deblais” which asks what is the most efficient (that is work minimizing) way to move pile of soil or rubble to an excavation or fill (Carlier, 2010).”
Monge talks about how will a thing be optimally transported and allocated to its destination. The optimal transportation problem tells us to assume two disjoint subsets: A & B.
“Imagine that the soil initially occupies the bounded region A which is a subset of R3 and that the excavation is the region B, assume also that A and B have the same volume (Carlier, 2010).”
Analyzing the soil and excavation example by Monge, then it tells us that there is an exact size or quantity of things that should be delivered to the point of destination.
In short, the theory describes that because both A and B have the same volume, then there is a uniform amount that should be distributed to the destination from its origin.
After considering the above assumptions, Monge tells that a transport plan has a bijective function:
- Conceptual Framework
In relation to RO-RO transport system, the innovation of sea transportation has benefited agriculture, tourism, trade and industry in Western Visayas. Efficient sea transportation which means easier and effective distribution, travel, and trading encompasses the whole process.
- Definition of Terms
- Universal
TRANSPORTATION - An act/process of transporting or being transported from one place to another
GOODS - Consumable item that is useful to people that can affect the demand curve
SECTOR - Is a part or a division in National Government.
TRANSPORT COST - It is the payment in every act of transporting.
IMPACT - It is the increase or decrease of a value based on the past records.
DISTRIBUTION - It is the process of making a product or service available for use and for consumption.
TRANSPORT PLAN - A strategic plan that help people to have a faster and compatible transportation.
MARKET - It is composed of buyers and sellers that are connected in supply and demand.
PRODUCTION - The act of creating output a good or service.
COMMODITIES - It is usually referred to raw materials.
INVESTMENT - taking the risk of putting money to work to make even more money.
INFRASTRUCTURE - It is a set of interconnected structural elements that provide framework supporting an entire structure of development.
URBAN - a developed area.
RURAL - an area that it located outside cities and town.
CARGO - it is the goods that are being transported by ships and aircrafts
PORTS - it is the place where ships can dock and transfer people and deliver the cargo to the land.
INCOME - it is the incentive received by the people when they sell their product.
EMPLOYMENT - the relationship between two parties, one being the employer and the other being the employee.
TAX REVENUE - it is the income of government to collecting tax to their people.
QUANTITATIVE RESEARCH - refers to the systematic, empirical investigation of social phenomena via statistical, mathematical or computational techniques
INTER-REGIONAL TRADE - is trade that takes place between two or more regions
AGRO-FISHERIES - A sector of agriculture that pertains to fishing
COOPERATIVE- is a type of nonprofit. It is owned by its members and operated for their benefit.\
AGRI TOURISM - as it is defined most broadly, involves any agriculturally-based operation or activity that brings visitors to a farm or ranch.
AGRIBUSINESS - Farming engaged in as a large-scale business operation embracing the production, processing, and distribution of agricultural products and the manufacture of farm machinery, equipment, and supplies.
ENVIRONMENTAL DEGREDATION - describes the erosion of the natural environment through the depletion of resources, the destruction of ecosystems and the extinction of plant and animal species
.
- Technical
NAUTICAL HIGHWAY - An integrated network of highways for water vehicles like ferries.
ROLL ON/ROLL OFF - ships are vessels designed to carry wheeled cargo such as automobiles, trucks, semi-trailer trucks, trailers or railroad cars that are driven on and off the ship on their own wheels.
STRONG REPUBLIC NAUTICAL HIGHWAY (SRNH) - is an integrated network of highway and vehicular ferry routes which forms the backbone of a nationwide vehicle transport system
Chapter 2
REVIEW OF RELATED LITERATURE
A. Current Status of RO-RO Transport System
The present state of RO-RO gives us the idea of what RO-RO does to the people in the Philippines. It shows the improvement of the area near RO-RO especially in different sectors especially the agriculture, tourism, and trade and industry sector. It is important to us to review the current status of the RO-RO so that we should know their plans to develop the system of transportation and services of RO-RO and improve its weaknesses.
Existing road networks allows seamless connection to roll-on roll-off (RO-RO) facilities in seaports and to major airports that will be upgraded to support easier transportation of goods and people within and outside the region. “RO-RO facilities have been built or rehabilitated in various ports in the Philippines. As a result, there was a marked increase in traffic in the inter-modal Roll-on Roll-off Transport System (RRTS) connecting the islands of Luzon, Visayas and Mindanao (Regional Developmant Council VI and National Economic and Development Authority VI, 2011).’’ There was an increase in number vehicles that are transported through RO-RO vessels. Also, a number of improvement and rehabilitation activities to strengthen the physical status of RO-RO. It reduced the transportation cost of the delivery of goods and services.