An Analysis of the Benefits and Costs of the Adoption of Congestion Pricing as an Alternative Parking Arrangement in Baguio City’s Central Business District

The surge in private vehicles in Baguio City has significantly surpassed its historical carrying capacity. By 2018, registered vehicles reached approximately 57,600, nearly three times the ideal limit of 15,000 required for normal traffic flow. This unregulated growth, particularly in the Central Business District (CBD), has created an aggressive demand for parking spaces, a resource that is both finite and high in value. This study frames streets and parking provisions as "impure public goods". Because they are often non-excludable and rivalrous, they create a "free-rider" dilemma where motorists enjoy the benefit of parking without contributing to the cost of upkeep. This communal nature encourages self-interested behavior, leading to inefficient resource allocation and "bottlenecks" that aggravate city-wide congestion. Current interventions primarily focus on increasing supply, such as the construction of multi-level parking, or implementing regulatory measures like the Number Coding Scheme. However, these remain inadequate. Findings indicate that unreasonably cheap parking rates (e.g., SM Parking's P40.00 whole-day flat rate) and outdated sanctions (the P150.00 fine used from 1984 until 2019) contribute to low parking turnover and provide little incentive for motorists to follow rules. Furthermore, there is a noted lack of strict enforcement regarding National Building Code parking occupancy requirements for commercial establishments This research evaluated the adoption of a standardized pay parking scheme, congestion pricing, by assessing its cost-effectiveness across 20 designated areas (12 private and 8 government-provisioned). Utilizing a mixed-method triangulation design, the study incorporated policy documents, stakeholder interviews, and a "Willingness to Pay" (WTP) survey. Findings of the study show that the current system already generates a positive Benefit-Cost Ratio, yet fails to manage demand. Quantitative analysis across six occupancy scenarios demonstrates that the benefits of congestion pricing consistently outweigh its costs. The study concludes that congestion pricing is a viable alternative worth pursuing. By implementing fair market prices that reflect true demand, the city can influence motorist behavior, disincentivize unnecessary private vehicle use, and encourage a shift toward public utility vehicles (PUVs). To maximize these benefits, the policy must be coupled with an improved, efficient public transportation system and more stringent enforcement of existing building codes. Revenue from the implementation of congestion pricing may be used to improve the public transportation system and strengthen enforcement of parking and traffic rules and regulations.