No Free Lunch

Wanted: sustainable cities

The Philippines is rapidly urbanizing, and is one of the fastest urbanizing countries in the East Asia and Pacific region. In 1970, our urban population was less than a third (31.8 percent) of our total population. As of 2010 (when the last population census was taken), nearly half (45.3 percent) of our population was classified as urban, and 54.7 percent rural. It is projected that by 2050, around two-thirds (more than 65 percent) of our population will be urban, leaving the rural population a small minority.

Will this be good for Filipinos, or is it something to worry about? In itself, urbanization need not be inherently good or bad. The World Bank, in its recently released Philippines Urbanization Review, observes that globally, 80 percent of economic activity is concentrated in cities, and cities have been essential in lifting millions of people out of poverty. This is because of the opportunities for jobs, services and innovation that density and agglomeration can bring. But if not planned and managed well, these benefits of urbanization may not be realized, and could result instead in the all-too-familiar problems of congestion, slums, pollution, inequality and crime.


The benefits of urbanization in the Philippines have been seen in increased productivity, economic growth and poverty reduction. But the World Bank report observes that the country has not benefited from urbanization gains as much as other countries have. There are a number of peculiar structural issues behind this. First, the country’s archipelagic geography has made connectivity a greater challenge, whether internally or externally. We have long lamented high domestic transport costs for decades, whether by road, rail, sea, or air. In the case of sea and air transport, lack of competition, which persists for domestic shipping to this day, had made transport across the islands more costly than should be. The same is true with communication, with our widely lamented slow and inadequate internet being a direct result of lack of competition in the telecommunications sector.

Second, the country had a relatively unique experience of shifting directly from an agriculture-based to a services-dominated economy, uniquely bypassing the process of industrialization normally associated with urbanization. China’s rapid rise as “factory of the world” in the 1990s through the turn of the millennium, coupled with our weak border controls and rampant smuggling, largely led to this “leapfrogging” peculiar to the Philippine economic story. The resulting stagnation in the manufacturing sector in past decades meant lack of quality jobs, negatively affecting urban-led growth in turn. The World Bank notes that all known cases of high and sustained growth elsewhere were led by urban manufacturing and services, with rising agricultural productivity freeing up labor for the factories in the cities. This typical economic development story did not transpire in the Philippines. The manufacturing impetus was not there, for reasons explained above, and neither did agricultural productivity rise, reflecting traditional weaknesses in our agricultural policies and institutions.


Third, the Philippines’ high exposure to natural hazards, particularly flooding and earthquakes, makes urban management an even greater challenge. Climate change is real, and we in the Philippines are among the most vulnerable to its negative effects.

What we need, then, are cities that sustain people, and cities that are sustainable. We need to assert that cities are for people, not for cars—and get people out of their cars by providing extensive and comfortable mass transport systems, bicycle lanes, and ample pedestrian walkways. We must deliberately plan for climate change and disaster resilience, by knowing, managing and planning around geohazards, and design and build our infrastructure for sustainability. Most importantly, we need to invest in our people, the ultimate object of development, with adequate services for health and nutrition, education and housing.

Easy to say, and hard to do, but those are the inevitable directions we must take, if our rapid urbanization is to be
good for Filipinos.

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TAGS: economic growth, Poverty Reduction, urban population, Urbanization
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