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By Chloe Mari A. Hufana and Ashley Erika O. Jose, Reporters
PRESIDENT Ferdinand R. Marcos, Jr. on Sunday paused the forthcoming restoration of Epifanio de los Santos Avenue (EDSA) that was initially planned to commence next week, referencing the necessity for additional evaluations to discover a “superior approach” and lessen its anticipated influence on commuters, drivers, and the wider economic framework, potentially even shortening the timeline of the project.
The commencement of the P8.7-billion restoration of Metro Manila’s most congested highway, which was scheduled for June 13, has been postponed to July, although Mr. Marcos did not specify a date.
The President shared this news during his visit to the Metro Rail Transit Line-3 Kamuning Station in Quezon City, where he responded to stakeholders’ apprehensions regarding the initiative.
“Numerous individuals [expressed concerns] about the proposed EDSA restoration. Many have come forward, conveying their worries, asking questions such as, ‘What about our livelihoods?’” Mr. Marcos stated in Filipino.
“When we evaluate the cost-benefit analysis, yes, it would be beneficial if we could resolve it, but the sacrifices required — two, three years — would be excessive,” he added. “Currently, it is apparent that too many individuals will bear the burden of the EDSA restoration as it stands. We will seek a superior method — one that is not too difficult for our fellow citizens.”
He noted that the government recognizes the daily challenges faced by Filipino commuters and laborers relying on EDSA, which accommodates around 400,000 vehicles daily and connects essential commercial and residential areas throughout Metro Manila.
In addition to mobility concerns, Mr. Marcos mentioned that the government has been made aware of emerging technologies that were overlooked in the initial planning of the EDSA restoration, stating that he has already directed the secretaries of the Transportation and Public Works and Highways departments to investigate these.
He also instructed relevant agencies to reevaluate the restoration strategy and investigate methods that could potentially decrease the construction period to as little as six months or one year from the original two-year timeline.
The Department of Transportation communicated in a statement that it is collaborating with its partner agencies to explore all available options to hasten the restoration of the highway to minimize opportunity costs for drivers and commuters.
The Metropolitan Manila Development Authority stated in a separate communication that it will no longer enforce the odd-even scheme on EDSA following the suspension of the restoration project. The existing number coding scheme will remain in effect instead.
The EDSA restoration is part of the Marcos administration’s “Build Better More” infrastructure initiative, a pivotal element of its economic strategy aimed at enhancing productivity, alleviating logistical constraints, and fostering long-term growth.
The delay arises amidst growing public anxiety about escalating traffic congestion in Metro Manila and the socioeconomic compromises of significant infrastructure renovations.
Rene S. Santiago, former president of the Transportation Science Society of the Philippines, remarked that EDSA’s restoration is “long overdue,” and another pause “merely postpones the situation.”
“There is a method to lessen the temporary distress,” he mentioned in a Viber chat. “From available work plans, there is space for enhancement, especially on the Metropolitan Manila Development Authority side and the Department of Transportation.”
Meanwhile, Federation of Free Workers President Jose Sonny G. Matula welcomed the deferment of the initiative, describing it as a demonstration of empathy from Mr. Marcos.
“Even if a project is devised by the brightest minds and aims to yield the best results, it may still face rejection or misinterpretation if the public is not consulted and does not feel a sense of ownership,” he commented in a Viber chat.
The labor leader urged the government to reevaluate the EDSA renovation plan and hold extensive discussions with stakeholders, including labor unions, transport workers, and commuters, to adopt a phased, worker-friendly strategy.
“The objective should be to modernize our infrastructure without compromising the well-being of the workforce,” Mr. Matula emphasized. “Advancement should not occur at the expense of the populace. Let us construct better roads but let us also honor the dignity and livelihood of every Filipino worker.”
IMPACT ON COMPANIES
Analysts last week indicated that the EDSA restoration project may have a short-term effect on the revenues of conglomerates whose businesses depend on foot traffic such as malls and entertainment, but their diversified revenue streams and extensive nationwide presence will help cushion the impact.
“Companies like SM Investments Corp. (SMIC) and Robinsons Land Corp. (RLC) which depend on mall visitors for income, could experience a drop in foot traffic during the construction phase,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce mentioned in a Viber message.
The anticipated traffic congestion and prolonged roadworks might deter consumers from frequenting malls, Mr. Arce noted, which could result in decreased retail sales, lower cinema attendance, and a potential downturn in food and beverage revenues.
“Mall and entertainment operations may undergo a short-term revenue decline as consumers adjust their habits, potentially bouncing back post-restoration if improved infrastructure enhances accessibility and convenience,” Mr. Arce stated.
Nevertheless, the anticipated decline in foot traffic would not significantly impact mall operators’ revenue streams, according to China Bank Capital Corp. Managing Director Juan Paolo E. Colet.
“Our preliminary evaluation is that the restoration efforts would not impose a material financial burden on major mall operators with diverse and well-situated properties,” Mr. Colet remarked in a Viber message.
“Shoppers are likely to shift some spending online or towards neighborhood centers, so the prominent EDSA malls like SM, Robinsons and others nearby should observe diminished weekend crowds. However, I believe these malls constitute only a small portion of each group’s portfolio,” Seedbox Securities, Inc. equity trader Jayniel Carl S. Manuel similarly noted in an email.
SMIC, through its subsidiary SM Prime Holdings, Inc. (SMPH), operates 88 malls in the Philippines, with 25 situated in Metro Manila.
In the first quarter, SMIC reported a 9.07% rise in its attributable net income to P20.05 billion from P18.39 billion last year.
It indicated that consumption will drive its long-term growth initiatives, led by its property, banking, and retail divisions.
Conversely, RLC manages 55 malls nationwide, with only nine of these in Metro Manila.
The company recorded a 4% rise in its first-quarter attributable net income to P3.48 billion, while revenue was maintained at P11.03 billion.
RLC previously mentioned that it anticipates earnings to grow by 12% annually to achieve its 2030 goal of generating P25 billion in net income. As part of this aim, the company plans to expand its investment portfolio, with intentions to increase its mall gross leasable area.
Analysts suggested that the projected increase in vehicular traffic could even present growth opportunities for businesses as Filipinos adjust their spending and travel habits.
Globalinks Securities’ Mr. Arce observed that mobility challenges will likely hasten online shopping, benefiting companies with robust e-commerce platforms.
For Seedbox Securities’ Mr. Manuel, traffic congestion could also stimulate the growth of real estate firms, positioning companies like SMPH and RLC to tap into the anticipated housing demand.
“The traffic congestion could actually bolster earnings. Many office employees are likely inclined to pay for accommodation near Makati and Bonifacio Global City to avoid long commutes,” he stated.
“EDSA-side malls might experience minimal near-term rental growth, but SMPH and RLC can recover much of it through enhanced residential and co-living revenues, while telecom companies enjoy a clear volume tailwind. For investors, the construction period appears more like a portfolio reshuffle than a real earnings cliff,” Mr. Manuel added.
Telecommunications and information and communications firms could also witness a revenue boost as mobility restrictions might lead to the resurgence of remote work setups, resulting in a heightened demand for connectivity, Mr. Arce similarly noted.
“With consumers anticipated to spend more time at home and adopt work-from-home arrangements, there could be an increase in demand for dependable internet and telecom services. This scenario favors telecommunication companies,” he commented.
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