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UNIVERSITY OF SANTO TOMAS PAGE 1

Analysis of Roll-On/Roll-Off Transport System:Its Impact in Western Visayas in Terms of Agriculture, Tourism, Trade and Industry

An Undergraduate ThesisPresented to the

Economics DepartmentFaculty of Arts and LettersUniversity of Santo Tomas

In Partial Fulfillment of theRequirements for the Degree

Bachelor of Arts Major in Economics

ByAbulkhayr M. Macabato Jr.Michael Kevin P. BayonaEphraim 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. Lubo has 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 Estacio for patiently advising and guiding their research study until the end.

Dr. Alvin Ang for 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.

4eco1 block 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.

I. 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.

II. Statement of the Problem

A. Main Problem:

i. Does Western Visayas achieve regional development through

the years as RRTS was established?

ii. What is the analysis of RO-RO transportation system in terms

of Agriculture, Tourism, Industry and Trade?

B. 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?

III. 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

IV. 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.

V. 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

VI. 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.


VII. 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 Gaspard Monge (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.

ASOIL

1000lbs

BEXCAVATION

1000lbs(capacity)

EFFICIENT TRANSPORTATION

TOTAL TRANSPORT

COST


“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:

X Y

1

2

3

4

A

B

C

D


VIII. 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.

ROLL-ON/ROLL-OFF TERMINAL SYSTEM

(RRTS) IN WESTERN VISAYAS

EFFICIENT SEATRANSPORTATION

Easier & EffectiveDistribution/

Travel/ Trading

TOURISM TRADE & INDUSTRY

AGRICULTURE


IX. Definition of Terms

A. 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

.


B. 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.


The activities of RO-RO created business opportunities for tourism,

commercial, and also for agriculture. For the agriculture, the local farmers from

the provinces around the route of RO-RO have increased their production because

they can sell their major products not only on their own province but also in the

provinces around the world. “Transportation costs via RO-RO had improved the

transport of agricultural products as well as the operation of the ports (Basilio,

Frielink, Acena, Hernandez, & Faustino, 2010).” As the people

In terms of crops, Negros Occidental has a massive land preparation and

planting of palay crops. The people of Negros who use RO-RO in their business

especially the local farmers have a large contribution on the operations of RO-RO.

It is been used to transport their goods to other places in the Philippines. “Negros

is the sugar bowl of the Philippines that the produce more than half of the nation’s

output (Negros-occ.gov.ph, 2012).” It is the largest producer of the country in

terms of sugar. There were temporary crops such as sugarcane and other

vegetables. Planting and harvesting of the crops are noted. Negros also contributes

to the livestock and poultry, trading of the small and large animals. Other

agricultural activity of Negros is the Fisheries.

When RO-RO started operations, it recorded an increase on the travellers

and tourists that are going to the various places in the country particularly in the

areas were known and popular destinations in the country. For the travellers and

tourists who prefer to ride a boat instead of plane was delighted to travel to


various places where they can bring their own vehicle by the help of RO-RO.

They choose to travel through RO-RO transport because travellers and some

tourists find the RO-RO travel more comfortable, affordable, and exciting travel.

“The RO-RO infrastructures have largely boosted the growth of tourism in

several areas along the route to visit the famous tourists’ spots. (Basilio E. L.,

Linking Philippine Islands Through Highways of the Sea, 2008)”. One of the best

examples is the Boracay Island in Caticlan. RO-RO helps the transportation of the

travellers and the tourists became easier and comfortable. “In the year 2003 to

2006, there is a large increase of tourist arrivals in several areas along the route of

RO-RO. Boracay Island grew by more than 50%, in Bacolod by 15%, in Iloilo by

30%, and Dapitan with a huge increase of 200% tourists. (Basilio E. L., Linking

Philippine Islands Through Highways of the Sea, 2008)”. Other areas that had a

dramatic surge of tourists arrival is the city of Cebu, Bohol, and Camiguin. The

arrival of tourists can be attributed to the availability of both

air and RO-RO transport services but more tourists use RO-RO transport because

of its affordability and comfortability.

A.) RO-RO port development at Banago

The governor of Negros Occidental Alfredo Maranon Jr. welcomes the

opening of the Banago port. It was the idea of Philippine Ports Authority (PPA)

and the Port Management Office (PMO) -Pulupandan to develop a RO-RO port on


the said area. The development of the port would lead to competition, lower fees,

charges, and better port service. Governor Alfredo Marañon said, “He believes

that the operation of the new developed RO-RO will not create losses but will

only lessen the income of Bredco Port, Bacolod City’s public port.” The Bredco

port is a privately developed and operated port in the City of Bacolod. It is served

regularly by ships coming to and from Manila, and the cities of Iloilo, Cagayan de

Oro, Zamboanga, and General Santos. Also, there are some of the shipping

companies that call in this port.

“The proposed port development by PPA at Barangay Banago is in close

proximity, if not side by side, with Bacolod Port. A new port in Bacolod City will

threaten revenues at Bacolod Port and also, eventually kill the private port

operation, which in the end the City of Bacolod will suffer (Tuesday, 2012).”

Because of the development of the Banago port, it will create competition to other

RO-RO ports near the area that would lead to decrease on their operations. Also

because Banago port is newly develop the people will use it more rather than the

other port. It will shut down the operation of Bredco port.

B.) 66 RO-RO projects to be cancelled

One of the top project/program that Ex- president Gloria Macapagal

Arroyo had passed is the construction of Strong Republic Nautical Highways.


President Benigno "Noynoy" Aquino declared that the ongoing construction of the

66 out of 72 ports of roll on/roll off (RO-RO) has been cancelled.

"Philippines do not need a 72 RO-RO ports because these would be a

source of corruption, the ports costs around 218 million pesos but actually, it

could only be 91 million pesos that means 127 million pesos are for the corrupt

government officials (Porcalla, 2011).” These ports are placed in the areas

experiencing usually huge waves that would be a threat to the passenger’s safety.

Upon the completion of the project, it will be off-warranty. The government

thinks that it will be a source of corruption because of the huge amount of money

that is involved in the project.

C.) Philippines study urges investment in road, port infrastructure

The Philippine government conducted a study about helping to

lower the transport and trade cost of the country by the use of tanks. It entitles

“Inter-regional Trade of High Value Fruits and Vegetables: Issues on Transport

and Shipping.” “The study focuses on the transportation of fruits and vegetables

produce from the regions of Mindanao to Luzon and Visayas to join the large

market (Liza, 2012).” It says that a good network of roads and ports that links

production areas to the markets is important to lowering the transportation and

marketing cost of the government.


“The lack of efficiency in transportation and in the system of distribution

leads to increase the cost of transportation of agricultural products. It reduces the

quantity and also the quality of the goods. It also decreases the profit of the

producers (Liza, 2012).” It shows that the transportation is one of the major

factors that can help the business to increase their profit. Transportation affects the

quality of agricultural products that if there’s a slower transporting of goods the

quality decreases.

D.) Batangas ro-ro vessel sinks off Romblon at height of ‘Gener’

According to Philippine Coast Guard (PCG) last July 29, 2012, a roll

on/roll off (RO-RO) vessel sank on Tablas Island in Romblon due to encounter to

rough seas caused by tropical storm "Gener". "According to PCG, the ship has 57

passengers and 46 crew members of the MV Shuttle RO-RO 1 (Esplanada,

Batangas ro-ro vessel sinks off Romblon at height of ‘Gener’, 2012).” Only one

passenger reported died due to undisclosed respiratory problems shortly after they

brought to the shore, he is identified as Ernesto Flores.

“They encountered rough sea conditions when Lt. Comm. Armand Balilo,

the PCG spokesman, advice the ship to en route to Batangas City from Dumaguit

via Romblon (Esplanada, Batangas ro-ro vessel sinks off Romblon at height of

‘Gener’, 2012).” The ship accidentally ran aground at Looc Bay in Tablas Island

when they decided to take shelter. Citing a report from the PCG station in


Romblon, Balilo said a PCG rescue team was immediately dispatched to Looc

Bay and when they arrived at the place, they saw the ship sinking and it is on fire.

B. Assessment of Ro-Ro operations

The demand for a reform of the maritime industry was shown by various

agencies that further studied the need to change the traditional shipping that was

ineffective and inefficient in the archipelagic setting. “There was a

recommendation from the studies of JICA, USAID, and SHIPDECO in the early

1990s that extensive use of Ro-Ro shipping is the most appropriate mode of sea

transportation in the Philippines because of its simple operations and does away

cargo-handling (Basilio E. L., Phil. Ro-Ro Experience, n.d.).” Presently, the

previous and present administration has realized the reforms to be taken into

consideration which gave birth to E.O. 170. Maintaining the status quo became an

option for the Philippine Ports Authority which resulted not to adapt the Ro-Ro

shipping in the past. “The PPA concluded that the Ro-Ro shipping was not

appropriate and suitable for the existing ports in the country where the ports

cannot accomodate the services of Ro-Ro shipping (Basilio E. L., Phil. Ro-Ro

Experience, n.d.).” PPA tells that there was a mismatch in the application of the

said reform but actually the existence of cargo-handling services which was

imposed by the PPA prevents the application of Ro-Ro transportation.


There were four main objectives of RRTS: the first is “to reduce transport

cost through a safe, and cost-effective RRTS, specifically inter-island

transportation cost (Basilio E. L., Phil. Ro-Ro Experience, n.d.).” The second is

“to develop tourism, transportation and commerce (Basilio E. L., Phil. Ro-Ro

Experience, n.d.).” The third is “to organize the modernization of agro-fisheries

and food security programs (Basilio E. L., Phil. Ro-Ro Experience, n.d.).” The

fourth is “to encourage the private sector to engage in RRTS operations and

establishment (Basilio E. L., Phil. Ro-Ro Experience, n.d.).”

For almost a decade of operating the Ro-Ro transportation, there are

already comprehensive influences in its application. There were effective changes

in the transportation cost and investments as well. “There was a significant

reduction in the transport cost associated with the reformed shipping operation

(Basilio E. L., Phil. Ro-Ro Experience, n.d.).” RRTS was also successful in its

objectives in a degree that the private sector should also engage and cooperate in

its establishment and operations. “Actually, 2Go express which is an Aboitiz Unit

had started to engage in Ro-Ro shipping by phasing out its container ships that

started in 2004 (Basilio E. L., Phil. Ro-Ro Experience, n.d.).”

The RRTS’ impact to agriculture also took place in the process where

dramatic changes happened in terms of productivity. “According to (Basilio E. L.,

Phil. Ro-Ro Experience, n.d.), there was an increase in the productivity of the

farmers as they were able to easily and efficiently access the broader markets


outside their which in turn provided them an incentive to increase further their

productivity.” Exposing and distributing your products outside your province will

give you higher income and demand will increase as well. The logistics and

distribution sector also benefited the RRTS. “Nestle which had 36 distribution

centers before have reduced to 3 distribution centers only since it the

establishment of Ro-Ro system as delivery trucks and container vans served as

moving warehouses. (Basilio E. L., Phil. Ro-Ro Experience, n.d.).”

C. The Western Nautical Route and Western Visayas’ Agriculture,

Tourism and Trade & Industry.

“The Archipelago of Philippines composes of more than 7,100 islands and

islets. With beautiful sceneries and natural resources, the main goal of

infrastructure development is the accessibility of the islands as well as mobility

within the islands (Basilio E. L., Linking the Philippine Islands Through the

Highways of the Sea, 2008).” Due to lack and hard transportation in the sea, Pres.

Gloria Macapagal Arroyo opened the RO-RO service in 2003 and after only five

years of operation. According to (Basilio E. L., Linking the Philippine Islands

Through the Highways of the Sea, 2008), “Total inter-island domestic cargo and

passenger traffic in 2007 shipped by sea reached 72.8 million metric tons (MT)

and 44.5 million, respectively. Increasingly, RO-RO shipping has facilitated much

of the traffic.”


The use of RO-RO service is to be a “moving bridges” to the

interconnectivity of the islands because it is costly to make a bridge that are not

close to other. “Assuming that the islands to be connected are farther apart such

that it becomes impossible or very costly to construct a bridge similar to the San

Juanico bridge, then what can be employed is a RO-RO ship which will serve as a

“moving” bridge (Basilio E. L., Linking the Philippine Islands Through the

Highways of the Sea, 2008).”

“The Western Nautical Highway connects Luzon and Mindanao by

passing through major islands of Mindoro, Panay, Guimaras and Negros through

Batangas Port as Luzon’s gateway to Visayas and Mindanao (Basilio E. L.,

Linking the Philippine Islands Through the Highways of the Sea, 2008).” Western

Nautical Highway is the gateway from Manila to Negros Occidental which is the

Sugarbowl Capital of the Philippines. It is called the Sugarbowl because Negros

Occidental is the number one producer of Sugar in the country.

“There are six bus lines, 51 buses, 35 RO-RO ships and many trucking

companies plying the Western Nautical Highway today (Basilio E. L., Linking the

Philippine Islands Through the Highways of the Sea, 2008).” Most of the bus

companies that cater the nautical highway are located in Cubao and Espana. “To

go there from Manila, you need to go to the port of Batangas which is located in

the city of Batangas wherein you have to travel by land through the South Luzon

Expressway and the Southern Tagalog Arterial Road and the estimated time of


journey is about 2 hours and a half for a total of 120 kilometers (Agriculture

Business Week, 2009).” Provinces you would pass by would be Laguna, Cavite,

Batangas that these places have many tourist attractions like beach resorts in

Batangas and national heritages sites in Cavite and Laguna. “From Batangas, the

first RO-RO you will ride through the route going to Negros Occidental is the

connection between the island of Luzon to the island of Mindoro which is the

Batangas-Calapan route (Basilio E. L., Linking the Philippine Islands Through the

Highways of the Sea, 2008).” “Aside from the Batangas- Calapan Route, the port

of Batangas is also available to other RO-RO ports namely Abra de Ilog, Puerto

Galera, Odiongan and Romblon (Basilio E. L., Linking the Philippine Islands

Through the Highways of the Sea, 2008).”

“There are many Ro-Ro shipping companies that provides 24 hour service

to this route particularly the Montenegro Shipping, Starlite Ferry, Minolo

Shipping Lines and the Sta. Cruz Shipping Lines (Basilio E. L., Linking the

Philippine Islands Through the Highways of the Sea, 2008).” Estimated time of

travel is 2 hours and 40 mins which is very lengthy but the cost of riding a RO-RO

is cheap.

“From Calapan, you will travel through land to the port of Dangay which

is located in the municipality of Roxas and takes about 2 and a half hours which

covers about 124 kilometers of road (Basilio E. L., Linking the Philippine Islands

Through the Highways of the Sea, 2008).” Mindoro has many tourist attractions


like Mt. Halcon which is one of the challenges that mountaineers would like to

encounter and Apo Reef which is the second contiguous coral reef in the

Philippines. “And from the port of Dangay, you will take another ro-ro route to

Caticlan. And from Aklan, you will need traverse the 210-kilometer stretch to

Iloilo via land travel which takes 5 hours (by car) to 6 hours (by bus) (Basilio E.

L., Linking the Philippine Islands Through the Highways of the Sea, 2008).” The

road condition is good but with some small pockets of rough road. “In Iloilo there

are 3 RO-RO ports particularly Muelle, La Paz and Dumangas. Dumangas is the

busiest in terms of RO-RO traffics. The RO-RO trip from Dumangas to Bacolod

(BREDCO port) approximately takes 1 1/2 hours and covers a total distance of 22

nautical miles (Basilio E. L., Linking the Philippine Islands Through the


In Bacolod, the port of BREDCO is own privately and it is operated in the

City of Bacolod. “It is opened for commercial traffic since 1995 and serves the

ships going to and coming from Manila, Iloilo, Cagayan De Oro, Zamboanga, and

General Santos (Basilio E. L., Linking the Philippine Islands Through the

Highways of the Sea, 2008).” It is the only private port existing in Bacolod City

and it also caters to both domestic and international ships which we exports sugar

to them and we import fertilizers for the crops in Negros Occidental. “There are

the shipping lines/companies that call in this port particularly the ff., Negros

Navigation & Company, SuperCat Corporation, Bullet Express, Aboitiz Transport


System Superferry., Aleson Shipping, William Lines, Weesam Express and

Sulpicio Lines (Basilio E. L., Linking the Philippine Islands Through the


There has been an increase in agricultural production since the start of the

RO-RO service. Many farmers are now producing more goods because of the

easier transport of goods being served by the RO-RO or the SRNH. “Since the

opening of SRNH, especially the Western Nautical Highway, opened up new

markets for farmers (Basilio E. L., Linking the Philippine Islands Through the

Highways of the Sea, 2008).” This opportunity is being taken advantage by

Negros Occidental since they are the sugarbowl of the Philippines and it exports to

different parts of the country and also internationally.

“The lifeblood of the economy in Negros Occidental is Agriculture and in

general it is still an agricultural province. Food Security and Agricultural

Productivity is one of the priorities of the present administration (Negros

Occidental Social And Economic Trends, 2011).” Due to the increased production

of agricultural commodities, datas on Agriculture is very important for the

improvement of the country and it shows the status on aspects on the economy

especially poverty. Also the data gathered in agriculture could be a great help in

people who are interested in investing on areas which is a great potential in

agricultural business and other agricultural related investments. “As such, data on

agriculture and fishery is important in guiding our policy makers, executives and


implementors in development planning and other related activities that focus on

achieving this goal (Negros Occidental Social And Economic Trends, 2011),”

“Palay production in Negros Occidental reached 710,643 MT in 2010 with

609,581 MT coming from the irrigated areas as said by the Office of the

Provincial Agriculturist data. There was an increase in the average yield from 4.17

MT per hectare in 2006 to 4.20 MT per hectare in 2010. (Negros Occidental

Social And Economic Trends, 2011).” Production of Palay is steadily increasing

in Negros Occidental because of shifting its other crops because of volatility in

prices to rice. Rice is also easier to produce and sell because of it is a staple food

here in the Philippines.

“The focus of the provincial government on food security and agricultural

productivity is the cause of this improvement. Philippine Rice Research Institute

(PhilRice) was established in the province in 2004 to further develop the rice in

Negros Occidental and to accommodate the needs of Negrenses towards a better

production of rice for food security (Negros Occidental Social And Economic

Trends, 2011).” The officials on Negros Occidental are trying to make the

province not only focused on food suffiency but also it tries to make the province

food secured on rice. If Negros Occidental has achieved food sufficient on rice, it

would be an economic advantage to their province. Also, the province also

focuses on their main commodity which is sugar cane. That is why the province is


called the “Sugarbowl of the Philippines” because they are the number one

producer of sugar in the Philippines.

“The gross tons cane milled in the 10 different mill districts reached

9,732,998.00 metric tons in crop year 2009-2010. The raw sugar production on

the same crop year was pegged at 1,017,246 metric tons comprising almost 52

percent of the total Philippine production (Negros Occidental Social And

Economic Trends, 2011).” There are many by products produced by sugar due to

enormous production. Molasses which are made by beating the sugarcane, bagasse

which are the fibrous object left in sugar cane after getting the sugar, and filter

cake mud which has many purposes such as animal feeds or fertilizer. They also

add to the income of those who produce sugar. “3 refineries located at the northern

parts of Negros Occidental that produce 9,485,727 50-kg bags which is 52.72

percent of the refined sugar production in the country (Negros Occidental Social

And Economic Trends, 2011).” Most of the farms in Negros Occidental are

making sugar as a main livelihood. “Supporting the sugar industry are the 13,039

planters owning 12,851 farms with a total area of 164,157 hectares (Negros

Occidental Social And Economic Trends, 2011).” Muscovado sugar is another

popular product of sugarcane because of its health benefits. It is often called

organic sugar because it does not contain any harmful chemicals in processing. It

is a very successful product because it has reached internationally and many

people are now being health conscious. “According to (Negros Occidental Social


And Economic Trends, 2011), Alter Trade Corporation which is the existing

producer of muscovado sugar in Negros is trying to cope up with the international

demand. Also, small cooperatives are producing organic muscovado sugar.”

Most agricultural crops can be grown because of abundant water source,

like fertile lands and relatively favorable climate in Negros Occidental. High value

crops can be grown commercially especially the sugarcane farms. Other crops

such as corn, coconut, banana, cassava, camote and etc. are also adding up to the

agricultural production of Negros Occidental. “Corn reached 81,088 metric tons in

2010 which is considered one of the staple foods aside from rice. The top leading

fruits in production are the following items: coconut which total produces is

108,840.03 Kg, banana which total production is 83,674.02 Kg, cassava which

total production of 25,950.75 Kg, mango total produces is 13,737.30 Kg, camote

total produces is 17,411.32 Kg and others (Negros Occidental Social And

Economic Trends, 2011).” In fisheries, Negros Occidental also has an advantage

because of the sea surrounding the island. “Fish is still another significant

commodity in the province with a production of 94,082 metric tons in 2010

coming from commercial fishing, municipal fishing and aquaculture (Negros

Occidental Social And Economic Trends, 2011).”

“Tourist arrivals increased in Western Visayas with a revenue of P43.2

billion in tourism receipts last year, according to the latest data released by the

NSCB 6. (French, 2012) “. The increase of tourist arrivals in Western Visayas is


because of Boracay Island which is located in Aklan. “Aklan has topped the

highest tourist arrivals in 2011 as compared in 2010 with 88.9 percent, followed

by Negros Occidental with 38.4 percent; and Capiz with 35.3 percent. Iloilo City

experienced a rate of tourist arrivals of 4.1 percent. (French, 2012)” Aklan topped

the highest tourist arrivals because of Boracay Island. Second is Negros

Occidental because it is called the “Sugar Capital of the Philippines.” Capiz is the

third because of its rich aquaculture and is called “Seafood Capital of the

Philippines.” “Iloilo, Guimaras and Antique has decreased its tourist arrivals in the

year period. (French, 2012)” Iloilo is known for its old churches. Guimaras is the

Mango Capital and Tibiao in Antique is famous for its kayaking spots.

Since the opening of the RO-RO Transportation, more people have gained

accessed to Boracay because of cheap transportation via Bus and RO-RO boats.

“Manila to Caticlan via RO-RO bus is P945 one way. (Backpacking Philippines,

2009)” “Boracay belongs to the Municipality of Malay which can be found in the

Province of Aklan. It has a total area of 1 006.64 hectares. Boracay Island is

composed of three barangays, (Bulabog, Manoc-manoc,and Yapak) (Rowan,

2011)” Boracay is famous for its white sand beaches and one of the most beautiful

beaches in the world. It is also known for its very marvelous nightlife which

people from all over the world flocks to it.

Another tourist spot in Western Visayas is Tibiao in Antique which is

famous for kayakers. Tibiao is a heaven for thrill seekers and nature lovers


because of the proximity to travel spots like Boracay, Iloilo and etc. “Tibiao is an

agricultural municipality located in the northern part of Antique and is located 75

kilometers north of San Jose de Buenavista which is the capital town of the

province of Antique. (Municipality of Tibiao, 2012)”

Iloilo is famous for its historical attractions namely the baroque chapel of

San Agustin which is a UNESCO world heritage site and Calle Real which is the

commercial center of Iloilo while there are many preserved colonial structures in

Negros Occidental.

In Guimaras, which is the Mango Capital of the Philippines, there is a

certain trend there that tourist from all over the Philippines flocks over to it. It is

the agritourism of the Mango fruit of the province. Guimaras mangoes are the

sweetest in the country and reportedly one of the sweetest in the world.

“Agritourism describes the act of visiting a working farm or any agricultural,

horticultural or agribusiness operation to enjoy, be educated or be involved in

activities. (Agricultural Marketing Resource Center, 2006)”

Agritourism in Guimaras not only limits to Mango farms but also bee

farms, salt farms, and aqua culture ponds. The agritourism circuit of the province

covers all 10 municipalities. “Agri-tourism Circuit starts from the port of entry of

Rizal in Jordan. It continues south to Nueva Valencia along the western side of the

Circumferential Road, and then move to Sibunag on the eastern side. It then goes


north to San Lorenzo and Buenavista, then west to close the approximately 71-

kilometer loop. (Discover Guimaras, 2012)”

D. Importance of RO-RO Transport System

Most of the islands have remained isolated from economic growth and

experiencing poverty. Also, most islands rely on poor and infrequent transport

service that causes difficulties in movement of goods and people. “Physical

isolation can be the most developmental challenge that countries that are

archipelagic lands are facing” (Kunio Senga, 2010).

To reduce high cost of transportation of goods, Ex-president Gloria

Macapagal Arroyo issued Roll on/Roll off (RO-RO) transport policy. It

established an integrated highway system that consist of both road and nautical

networks that help us to have faster transportation of goods. “The goal of RO-RO

is to establish an integrated national system that consist of road and nautical

networks that would promote faster movement of people and goods from

Mindanao to Luzon and Luzon to Mindanao” (Basilio E. L., 2008).

“In 2003, RO-RO was introduced from Zamboanga del Norte through

Negros, Panay and Mindoro to Batangas. RO-RO transport system has slashed

travel time from Mindanao to Luzon from 36 hours to 24 hours, and freight cost

by 30%, that is so crucial to food shipments.” (Arroyo, 2008) It became more

faster in terms of the movement of the goods for the business and the travel time


as well. Transportation cost has reduced with a large amount that helps people to

have more income. Ex-President Gloria Macapagal Arroyo once said “This is one

legacy I’d really like to leave behind”.

Infrastructure development serves a motivation for development and

growth of an area, a good example of this would be the city of Roxas. “Before it

became a city the municipality of Roxas in Oriental Mindoro has experienced the

development that stands out in the whole context of SRNH.” (Basilio E. L., 2008)

The municipality of Roxas which is not that urbanized before has obtained the

needed boost of economic energy because of the introduction of RO-RO transport

policy. The development of small RO-RO ports created a lot of opportunities for

the people of the municipality. “Since the opening of Dangay Port, it has rapidly

increased the number of goods and people travelling the area. Cargo traffic grew

1780% and passenger traffic grew by 745%. Also, the number of rolling cargoes

(cars, trucks, and jeepneys) passing to the port also increased from 9269 to 75517

(715% increase)”. (Basilio & Dy, Bridges Across Oceans, 2010) Because of RO-

RO, the city has experienced an aggressive development towards urbanization

with developments in agriculture, commerce, and tourism.

In agriculture, because of RO-RO transport policy of Ex-President Gloria

Arroyo the local farmers have reached larger markets from Luzon like Manila and

Batangas; and from Visayas like Panay Island. The farmers are having incentives

to increase their production of their products so that it would reach larger markets.


In commerce, commercial establishments continue to expand. It includes

drugstores, restaurants, banks, hardware stores, auto supplies and also gas stations

have increased because of the increased in vehicular traffic. In tourism, the

increased number of people that are travelling to experience the internationally

known Boracay Island in Visayas.

Ports facilitate the flow of people and the goods. “This development could

result to increased in production, income, investments, employment, consumption,

savings, and more tax revenues for local government’’ (Basilio & Dy, Bridges

Across Oceans, 2010). Products have reached more and larger markets via RO-RO

that causes greater incentives to produce and develop new products.

“As an incentive for area development, the Strong Republic Nautical

Highway offers various economic opportunities to the people that are being

benefited by the RO-RO. Increasing inter-island trade has benefited even the

smallest Filipino people” (Basilio E. L., 2008).

“Center for Research and Communication (CRC) has conducted a research

about the transportation of goods via Western Nautical Highway is cheaper

compared to conventional shipping.” (Basilio E. L., 2008) One of the reasons of

having a high transport cost is the cargo handling cost. The removal of this cargo

handling charges has lowered the transport costs because the yearly increase of it

has stopped since the introduction of RO-RO. Total transport cost from SRNH is

much cheaper compared to Road RO-RO shipping. SRNH avoid a high cost of


payment in freight charges, terminal fees from the port; decrease the cost of fuel,

and charges from local government. The only exception was 2006 because of the

surge of oil prices in the Philippines that cause our transportation to increase.

The opening of Strong Republic Nautical Highway opened up new

markets for farmers. Farmers who used to sell their products in Manila from the

provinces reached the new markets because of Nautical Highways. “Increasing

and developing farm productivity through high-yielding varieties, fertilization,

irrigation, and a new farming techniques can be discouraged by an inefficient

transport and distribution system” (Basilio, Frielin, Acena, Hernandez, &

Faustino, 2010). In line of the decreasing of transportation costs via RO-RO, the

system has improved the transport of agricultural products as well as port

operation. It gives us alternate routes for greater efficiency in the transport of

products. “The development in Agricultural sector that brought by the RO-RO

encouraged farmers to increase their production to take advantage of the

opportunities for increasing their income” (Basilio E. L., Linking the Philippine

Island, 2008)

In terms of tourism, the tourism industry is one of the sectors that greatly

benefited from RO-RO. It boosted the number of growth of travellers and tourists

arrivals to different areas along the route. It gives the travellers and tourists a

convenient and accessible transportation so that they can travel to the tourists’

spots in the Philippines. The tourist spots in our country will be explored by the


people who love to travel and have an unforgettable adventure. Also, RO-RO

transportation has a good access of transport than transportation on land because

of the rapid increase of the people using vehicles and as a result of it; it also

increases the traffic in land. “During the first half of the twentieth century in

Ireland, the traffic on the land increased and because of that the some of the

passengers moved to the sea. (Trant, Schmidt, & Gallagher, 2007)”

The RO-RO transport policy has not only linked the major islands Luzon,

Visayas, and Mindanao but it also shows us the economic development that we

achieved because of this policy. The goods are being shipped more

efficiently particularly, the movement of the people and the goods. New inter-

island links haven created and the regional market have expanded into a larger

market. Local areas have developed rapidly their infrastructures and increased

their economic activities. Increased of the tourism sector of the provinces that are

cover of the RO-RO transport policy and lastly, reducing transportation costs

“Due to the space required for maneuvering, vehicles cannot be stowed

effectively. The vehicles require a large amount of the ship’s space for cubic

capacity.” (Ravn, 2003) RO-RO is very management intensive, requiring careful

stowage planning which results to attract high value of freight that can obtain

higher freight rates.

Another disadvantage of Ro-Ro is the waste of cargo carrying capacity due

to undercarriage and all-around clearance requirements. Although the degree of


packing may be reduced for Ro-Ro shipments, keep in mind that the cargo will

travel aboard an oceangoing vessel and will be subjected to all the hazards of an

ocean voyage. In case of accidents in shipping, there are possible threats to the

environment and rising cost of fuel to run the ships. "Also, it is impossible to

retrieve the cargo in case of accident. Most of the goods are unrecoverable as it

sinks in the deep seas. In other cases, goods like crude oil can cause water

pollution when it spills into the sea in case of an accident that leads to

environmental degradation and poses a threat to aquatic resources." (Ghelani,

2011)


Chapter 3

RESEARCH METHODOLOGY

A. Research Design

A Time-series Descriptive Research Design was used by the researchers to

conduct the research study further. “This design involves successive observations

throughout a programmed intervention and assesses the characteristics of the

change process (Gottman, McFall, & Barnett, 1969)”. The purpose of this research

structure was to study and observe whether there was a growth happened or there

wasn’t in establishing RO-RO transportation in Western Visayas. Since the study

was comparing two time periods: an era where RO-RO transportation was not yet

established and an era where it was already established, a time-series research

design would be a helpful researching tool since it shows the changes in a specific

situation that has been affected by both internal or external factors. Relating the

research design to the research topic, the researchers used Time-series research

design in order to gain an answer on how RO-RO transportation system has

affected growth and development in Western Visayas (Region 6). According to

(Gottman, McFall, & Barnett, 1969), Time-series research design has a unique

capability to show or produce continuous fluctuating record over the complete

process of the studied program.


B. Locale of the Study

The image below shows the map of where the locale of the study is

conducted. Western Visayas (Regions 6) is made up by the provinces of Aklan,

Antique, Capiz, Iloilo, Guimaras, ang Negros Occidental.

Source: DTI

C. Procedure

The researchers have gathered secondary data from various government

institutions that are necessary in order to complete numerical data that are needed


to perform statistical tool analysis. The researchers went to gather

secondary/numerical data that was collected from Government institutions such as

NSCB, DA, DOT, DTI, DOTC, BAS, and PPA.

D. Instrumentation and Data Collection

Since the research revolves around RO-RO transportation under the

SRNH, the time-series data was appropriate for the study. Secondary data was

gathered and used where we variables such as GRDP, Agricultural output, Tourist

travels, and Trade and Industry were collected. All of this numerical data only

pertains to Western Visayas since it is the research locale. After the data was

gathered, the researchers were able to make an input and proceeded to statistical

tool analysis in order to find out necessary outcomes.

E. Tools for Data Analysis

Data analysis toolpak of Microsoft Excel was used by the researchers in

processing the data gathered to be able to get an output and interpret its statistical

valuations. Since the study compared two periods, then a data for pre-RO-RO era

and post-RO-RO era were collected with five variables for each era, the

researchers have used t-Test: Two-Sample, Assuming Unequal Variances as

statistical tool analysis.


• Welch-Satterthwaite test

• Degrees of freedom

The variables were Gross Regional Domestic Product where its unit was in

thousand pesos, Agricultural output where its unit was in thousand pesos, Tourist

arrivals of Domestic & Foreign travellers, Industry output where its unit was in

thousand pesos, and output of Trade where its unit was in thousand pesos.


Chapter 4

PRESENTATION, INTERPRETATION AND

ANALYSIS OF DATA

This chapter contains the outcome of statistical tested data of the variables that

will show the research study’s findings and analysis. It consists of Regional,

Agricultural, Tourism, Industry and Trade growth interpretation. The findings are

divided into two: pre-RO-RO years which represent the time period before RRTS

was implemented and the RO-RO years which represents the period where RRTS

was already implemented. The data for pre-RO-RO period lasted from 1995 to

2002, while the data for RO-RO period lasted from 2003 to 2010.

A. Regional Development

The Gross Regional Domestic Product of pre-RO-RO years shows a mean of

65228245.75 as the Gross Regional Domestic Product of RO-RO years shows a

mean of 95944727.75. The computed variance for GRDP of pre-RO-RO period

was 32351272459935.4 and the computed variance for GRDP of RO-RO period

was 176244707040507. Using a level of significance of 0.05, the t-critical for

right-tailed test was equal to 1.833. The calculated t-Test was equal to 6.015

which was more than 1.833 and lies in the critical region. There was a significant


increase in the Gross Regional Domestic Product of Western Visayas since the

implementation of Roll-on/Roll-off Transport System.

Figure 1 below shows the Gross Regional Domestic Product of Western

Visayas since 1995-2010. The horizontal axis represents the years 1995-2003

which pertain to the pre-RO-RO period until the years 2003-2010 which pertain to

the current RO-RO period. The vertical axis represents the values of Gross

Regional Domestic Product. As a result of implementing the Roll-on/Roll-off

Transport System, the movement of GRDP’s line in the graph is almost a

continuous upward-sloping which means that there has been a growth in the

aggregate gross value added of all sectoral producers in Western Visayas. (See

Appendix B)

Figure 1:

19951997

19992001

20032005

20072009

0.00

40,000,000.00

80,000,000.00

120,000,000.00

Gross Regional Domestic Product (Region 6)

GRDP (In Thousand Pesos)

Source: NSCB


Table 1 below shows the annual growth rate of Gross Regional Domestic Product from 1995-2010.

Table 1:

Year GRDP ANNUAL GROWTH RATE1995-1996 6.08%1996-1997 0.87%1997-1998 0.54%1998-1999 6.12%1999-2000 4.11%2000-2001 3.56%2001-2002 4.98%2002-2003 3.95%2003-2004 7.76%2004-2005 5.01%2005-2006 4.93%2006-2007 7.66%2007-2008 4.29%2008-2009 5.92%

B. Agricultural Development

The Agricultural Output of pre-RO-RO years shows a mean of 19582144.875

as the Agricultural Output of RO-RO years shows a mean of 24907944. The

computed variance for Agricultural Output of pre-RO-RO period was

1990128833244.43 and the computed variance for Agricultural Output of RO-RO

period was 5900960810016.86. Using a level of significance of 0.05, the t-critical

for right-tailed test was equal to 1.796. The calculated t-Test was equal to 5.362

which was more than 1.796 and lies in the critical region. There was a significant

increase in the Agricultural Output of Western Visayas since the implementation

of Roll-on/Roll-off Transport System.


Figure 2 below shows the Agricultural Output of Western Visayas since 1995-

2010. The horizontal axis represents the years 1995-2003 which pertain to the pre-

RO-RO period until the years 2003-2010 which pertain to the current RO-RO

period. The vertical axis represents the values of Agricultural output. Although

there was an upward sloping-pattern, there was a sudden decrease in agricultural

output in the year 1996-1998. This sudden drop was caused by a decrease of

production of Major Crops such as Palay and Corn. In addition, the production of

Fisheries has decreased as well in these years. (See Appendix C)

Figure 2:

19951997

19992001

20032005

20072009

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

AGRICULTURAL OUTPUT

AGRICULTURAL OUTPUT (In Thousand Pesos)

Source: NSCB

Table 2 below shows the annual growth rate of Agricultural output from 1995-2010.


Table 2:Year AGRICULTURAL OUTPUT ANNUAL GROWTH RATE1995-1996 3.85%1996-1997 -4.81%1997-1998 -5.76%1998-1999 13.82%1999-2000 1.89%2000-2001 4.88%2001-2002 2.18%2002-2003 1.36%2003-2004 7.01%2004-2005 1.03%2005-2006 2.39%2006-2007 0.77%2007-2008 3.91%2008-2009 2.64%

C. Tourism Development

The Tourists Arrival of pre-RO-RO years shows a mean of 532197.75 as the

Tourists Arrival of RO-RO years shows a mean of 1581258. The computed

variance for Tourists Arrival of pre-RO-RO period was 21802086915.643 and the

computed variance for Tourists Arrival of RO-RO period was 183504459316.

Using a level of significance of 0.05, the t-critical for right-tailed test was equal to

1.833. The calculated t-Test was equal to 6.549 which was more than 1.796 and

lies in the critical region. There was a significant increase in the Tourists Arrival

in Western Visayas since the implementation of Roll-on/Roll-off Transport

System.


Figure 3 below shows the Tourists arrival in Western Visayas since 1995-



period. The vertical axis represents the values of Tourists arrival. In 1999 to 2000,

there was a 1.8% growth rate of domestic visitors in Western Visayas. However,

there was a sudden growth during years of 2001-2002 of 32.9%. (See Appendix

D)

Figure 3:

19951997

19992001

20032005

20072009

0

500000

1000000

1500000

2000000

2500000

TOURISTS ARRIVAL

TOURIST ARRIVALS (Domestic and Foreign Travellers)

Source: NSCB

Table 3 below shows the annual growth rate of Tourists arrival from 1995-2010.

Table 3:


Year TOURISTS ARRIVAL ANNUAL GROWTH RATE1995-1996 6.60%1996-1997 5.77%1997-1998 2.73%1998-1999 1.92%1999-2000 45.57%2000-2001 -6.21%2001-2002 26.76%2002-2003 13.41%2003-2004 34.74%2004-2005 15.82%2005-2006 -8.50%2006-2007 42.96%2007-2008 8.63%2008-2009 1.49%

D. Development in Industry

The Industry Output of pre-RO-RO years shows a mean of 16341088 as the

Industry Output of RO-RO years shows a mean of 25637664.875. The computed

variance for Industry Output of pre-RO-RO period was 3389606493748.29 and

the computed variance for Industry Output of RO-RO period was

25714027559232.4. Using a level of significance of 0.05, the t-critical for right-

tailed test was equal to 1.833. The calculated t-Test was equal to 4.874 which was

more than 1.833 and lies in the critical region. There was a significant increase in

the Industry Output in Western Visayas since the implementation of Roll-on/Roll-

off Transport System.

Figure 4 below shows the Industry output in Western Visayas since 1995-




period. The vertical axis represents the values of Industry output. As a result of

implementing the Roll-on/Roll-off Transport System, the line of output of industry

shows an upward-sloping pattern since pre-RO-RO period until present. The slope

of the RO-RO period is much steeper than the slope of pre-RO-RO period. In the

latter years (2000-2002) of pre-RO-RO period, industry was almost stagnant until

2003 where there was a sudden growth that happened and is still increasing until

present. It mainly shows that the industry sector has continuously increased and

has benefitted in the implementation of Roll-on/Roll-off Transport System. (See

Appendix E)

Figure 4:

19951997

19992001

20032005

20072009

05000000

100000001500000020000000250000003000000035000000

INDUSTRY

INDUSTRY (In Thousand Pesos)

Source: NSCBTable 4 below shows the annual growth rate of Industry output from 1995-

2010. Table 4:


Year INDUSTRY OUTPUT GROWTH RATE1995-1996 7.27%1996-1997 3.16%1997-1998 3.74%1998-1999 5.52%1999-2000 9.44%2000-2001 1.61%2001-2002 0.06%2002-2003 6.16%2003-2004 6.93%2004-2005 5.86%2005-2006 4.06%2006-2007 13.14%2007-2008 8.82%2008-2009 12.02%

E. Development in Trade

The Trade output of pre-RO-RO years shows a mean of 13997108.375 as the

Trade output of RO-RO years shows a mean of 21858757.875. The computed

variance for Trade output of pre-RO-RO period was 1045536638795.43 and the

computed variance for Trade output of RO-RO period was 8943106067726.71.

Using a level of significance of 0.05, the t-critical for right-tailed test was equal to

1.833. The calculated t-Test was equal to 7.036 which was more than 1.833 and

lies in the critical region. There was a significant increase in the Trade output in

Western Visayas since the implementation of Roll-on/Roll-off Transport System.

Figure 5 below shows the output of Trade in Western Visayas since 1995-




period. The vertical axis represents the values of output of Trade. As a result of

implementing the Roll-on/Roll-off Transport System, the line of output of Trade

also showed an upward-sloping pattern since pre-RO-RO period until present but

there were instances that growth became almost stagnant in the years 1996-2000.

Notice that the slope between years 2003-2007 was much steeper than the years

1995-2002. This mainly shows that Trade has improved and developed since the

start of Roll-on/Roll-off Transport System. (See Appendix F)

Figure 5:

19951997

19992001

20032005

20072009

0

5000000

10000000

15000000

20000000

25000000

30000000

TRADE

TRADE (In Thousand Pesos)

Source: NSCB

Table 5 below shows the annual growth rate of Gross Regional Domestic Product from 1995-2010.

Table 5:


Year TRADE ANNUAL GROWTH RATE 1995-1996 6.79%1996-1997 1.72%1997-1998 0.55%1998-1999 2.40%1999-2000 1.27%2000-2001 3.72%2001-2002 8.69%2002-2003 6.58%2003-2004 10.13%2004-2005 7.07%2005-2006 7.12%2006-2007 10.66%2007-2008 1.19%2008-2009 1.80%

Chapter 5

Summary, Conclusion, and Recommendation


A. Summary

The research study further explains that the implementation of Roll-on/Roll-

off Transport System has contributed to Western Visayas as a whole. Although

there were circumstances throughout the period that some sectors have fluctuated,

this is mainly an effect of internal and external factor. There were five variables

that were used in the study. First, Gross Regional Domestic Product was used to

determine if regional development has occurred since the start of RRTS. Second,

Agricultural output was used to determine if agricultural development has

occurred since the start of RRTS. Third, Tourists arrival was used to determine if

regional development has occurred since the start of RRTS. Fourth, output of

Industry was used to determine if development in industry has occurred since the

start of RRTS. And lastly, output of Trade was used to determine if development

in Trade has occurred since the start of RRTS.

B. Conclusion

In the long-run, the research study showed that Western Visayas has

developed as a region in terms of Agriculture, Tourism, and Industry & Trade.

Indeed, solving inefficient transportation will lead to improvement of circulating

social and economical products which gives birth to services and other sectors.

Since a large production of sugar comes from Negros Occidental, because of the


help of convenient and easier sea transportation, sugar producers are able to save

money compared to a costly and inconvenient way of distributing products out of

the region. Because of this, these producers can save money and invest in other

business operation that will give an economic development in the region. Not only

producers can benefit from distributing their products but distributors from outside

the region who distribute their product to region 6 have enjoyed the project. In

addition, Tourists have now an option to choose sea transportation than costly air

transportation especially those who live nearby Western Visayas.

C. Recommendation

To the producers and consumers:

The researchers recommend that local producers not only in Western Visayas

should patronize the use of Roll-on/Roll-off Transport System. This kind of

system benefits all actors in the economy. Both producers and consumers enjoy

the convenient transportation implemented by RRTS.

To the government:

The researchers recommend that the government should give a huge

priority in the operations of Roll-on/Roll-off Transport System and should try to

achieve its full potential. The researchers believe that RRTS will reach its full

potential if the government will extend its transport operation in the whole country


especially in regions that was left behind. The reason behind the need in extending

the operation is that it will give new economic opportunities for regions or

provinces that has a potential to develop especially the poor provinces in

Mindanao. Although RRTS was extended in some parts of Mindanao, it is not

enough to match the demand of employment that RRTS can give. New Jobs can

be created and the economic process and trading becomes huge and more people

can participate in the long-run.

Appendix A – BIBLIOGRAPHY


Agricultural Marketing Resource Center. (2006). Retrieved 2013, from http://www.agmrc.org/commodities__products/agritourism/

Agriculture Business Week. (2009, January 06). Retrieved October 1, 2012, from Agribusiness Week: http://www.agribusinessweek.com/the-ro-ro-connection-part-5/

Arroyo, G. M. (2008). Linking the Philippine islands. pasay city: Center for Research and CommunicationFoundation Inc.

Backpacking Philippines. (2009). Retrieved 2013, from http://www.backpackingphilippines.com/2009/04/boracay-roro-bus-ferry-batangas-mindoro.html

Basilio, E. L. (n.d.). A Market Oriented Policy Reform Option.

Basilio, E. L. (2008). Linking Philippine Islands Through Highways of the Sea. Pasig City: Center for Research and Communication, Inc. .

Basilio, E. L. (2008). Linking the Philippine Island. 23.

Basilio, E. L. (2008). Linking the Philippine Islands. Through highway of the sea , 7.

Basilio, E. L. (2008). Linking the Philippine Islands Through the Highways of the Sea. Center for Research and Communication.

Basilio, E. L., & Dy, R. T. (2010). Bridges Across Oceans. An Initial Assessment of the Economic Impact of RO-RO in the philippines , 31.

Basilio, E. L., Frielin, B., Acena, J., Hernandez, R., & Faustino, E. (2010). Bridges Across the Ocean. 38.

Basilio, E. L., Frielink, B., Acena, J., Hernandez, R., & Faustino, J. (2010). Bridges Across the Oceans. Manila: Asian Development Bank.

Carlier, G. (2010). Optimal Transportation and. IMA, New Mathematical Models in Economics and Finance.

Discover Guimaras. (2012). Retrieved 2013, from http://guimaras.gov.ph/tourism/agricultural-tourism/


Esplanada, J. E. (2012, july 30). Batangas ro-ro vessel sinks off Romblon at height of ‘Gener’. Philippine Daily Inquirer .

French, L. A. (2012, June 19). WV tourist arrivals hit double digit growth in 2011. Iloilo City, Region 6.

Furuoka, F. (2009). Unemployment and Inflation in the Philippines: New Evidence from Vector Error Correction Model. PIDS.

Ghelani, B. P. (2011). Disadvantages of Sea Freight Shipping.

Gottman, J. M., McFall, R. M., & Barnett, J. T. (1969). DESIGN AND ANALYSIS OF RESEARCH USING TIME SERIES. DESIGN OF RESEARCH USING TIME SERIES , 299-306.

International Labor Organization. (2010). Working towards an ILO convention on domestic work : an MFA report.

Kunio Senga. (2010). Briges across Oceans. Initial Impact Assessment of the Philippines Nautical , vi.

Liza. (2012, June 27). Ph study urges investments in road, port transportation. Portcalls Asia .

Mortensen, D. (2003). Wage dispersion: why are similar workers paid differently? MIT Press.

Municipality of Tibiao. (2012). Retrieved January 2013, from http://www.tibiaoantique.info/for-visitors/map-a-location.html.

National Statistics Office. Philippine Medium-Term Youth Development Plan 1999-2004. Negros Occidental Social And Economic Trends. (2011, December 23). Bacolod, Negros Occidental, Philippines.

Negros-occ.gov.ph. (2012). Provincial Government of Negros Occidental.Orbeta, A. (2003). Education, labor market and development: a review of the trends and issues in the Philippines for the past 25 years. Philippine Institute for Development Studies.

Paderanga, C. (1989). Tertiary Education in the Philippines: Individual Rationality and Social Myopia. UP-School of Economics.


Pernia, E. (2008). Is Labor Export Good Development Policy? UPSE.

Porcalla, D. (2011, august 4). 66 roro projects to be cancelled. The Philippine Star .

Ravn, E. S. (2003). Probabilistic Damage Stability of RORO Ships. 1.Regional Developmant Council VI and National Economic and Development Authority VI. (2011). Western Visayas Regional Development Plan 2011-2016. 47.

Reynolds, L. (1998). Labor Economics and labor relations. Upper Sadle River, New Jersey: Prentice-Hall.

Rowan, T. S. (2011). Revisiting Boracay Island, the Philippines: An Integrated Coastal .

Sanchez-Robielos, Teresa, M., & Gonzalo, J. Philippine Employment and Industrial Relations Policies: An Assessment. Philippine Institute for Development Studies.

Stiglitz, J. E. (2000). Economics of the Public Sector. New York: W. W. Norton.

Trant, G., Schmidt, F., & Gallagher, M. (2007). Feasibility of New RoRo/RoPax Services Between Ireland and Continental Europe. Maritime Institute.

Tuesday, T. E. (2012, july tuesday). NEGROS Occidental Governor Alfredo Marañon Jr. welcomes RO-RO port development at Banago.

Appendix B – Gross Regional Domestic Product

(Western Visayas: In Thousand Pesos)


YEAR GRDP (In Thousand Pesos)1995 575968971996 610975751997 616266571998 619623211999 657554652000 684612322001 708961802002 744296392003 773696722004 833745572005 875531132006 918659522007 989047322008 1031454892009 109252408

Source: NSCB

Appendix C – Agricultural Output



YEAR AGRICULTURAL OUTPUT (In Thousand Pesos)1995 186717421996 193914141997 184580141998 173939441999 197975322000 201707452001 211558122002 216179562003 219112122004 234482762005 236888002006 242547662007 244411972008 253970982009 26068514

Source: NSCB

Appendix D – Tourists Arrival

(Western Visayas: Domestic and Foreign)


YEAR TOURIST ARRIVALS (Domestic & Foreign)1995 3904031996 4161511997 4401831998 4522211999 4608842000 6708982001 6292432002 7975992003 9045662004 12188142005 14116432006 12916152007 18465542008 20059262009 2035905

Source: NSCB

Appendix E – Output of Industry



YEAR INDUSTRY (In Thousand Pesos)1995 136748961996 146697351997 151334801998 156999581999 165658582000 181303542001 184215912002 184328322003 195686342004 209238792005 221509722006 230508052007 260804152008 283800292009 31792040

Source: NSCB

Appendix F – Output of Trade



YEAR TRADE (In Thousand Pesos)1995 125134591996 133626601997 135922852998 136665361999 139945332000 141718702001 146987772002 159767472003 170281322004 187522582005 200771292006 215073092007 238001382008 240842462009 24516913

Source: NSCB

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