Making MM inclusive, competitive, sustainable

Metro Manila (MM) is the 18th largest megacity in the world, and one of the fastest growing in Asia. In 2015, it recorded a night-time population of 12.88 million, which balloons to around 15 million at daytime. It is also the most crowded region of the Philippines, with a density of 20,785 persons per hectare.

Urbanization is generally acknowledged by urban development experts as a driving force for economic growth as well as poverty reduction. Globally, over 80 percent of economic activity is concentrated in cities, which are essential for lifting people out of poverty through the opportunities that density and agglomeration can bring with jobs, services and innovation. However, if not carefully planned and managed, the benefits of urbanization are not realized and, as shown in MM, can result in congestion, slums, pollution and inequality.

Urbanization is also correlated with economic efficiency and growth. For the past several years, MM has dominated the country’s economic activities. This has perpetuated its dominance as the country’s premier center for finance and commerce. Its performance has been and continues to be critical for the overall development and growth of the entire country.

While MM’s urbanization has had some positive impact on increased productivity and economic growth, it has had very little contribution to poverty reduction. Some reports indicate that poverty in MM in 2015 was higher than the national average of 26.3, and that this has been increasing since 2006. This suggests that the metropolis’ urbanization leaves much scope for addressing the issue of poverty.

City competitiveness is an important part of successful urbanization. A competitive city facilitates its businesses to create jobs, raise productivity, and increase the incomes of its citizens. The primary source of job creation in cities all over the world has been the growth of private sector firms, typically accounting for around 75 percent of job creation. While MM has led the country in the service sector, particularly the business process outsourcing industry, it remains behind its international peers, suggesting the need for reforms to foster additional economic growth and job creation.

There are a number of underlying issues affecting MM’s urbanization and competitiveness, among them: (i) a stagnating manufacturing sector that has not resulted in high-quality jobs; (ii) high exposure to natural hazards, particularly flooding and earthquakes; (iii) highly fractured metropolitan governance and urban development system; and (iv) major shortcomings in land administration and management. The resulting impact of these issues, coupled with rapid urbanization, has greatly hampered MM’s competitiveness, affecting job creation, poverty reduction and livability.

Commitments to bold reforms are thus needed to be taken by the national government, the Metropolitan Manila Development Authority (MMDA), the local government units (LGUs) comprising MM, the private sector and civil society. Because of their scope and complexity, these reforms need to be orchestrated by no less than the Office of the President. The five major reform areas are:

Improving efficiency through better management of metropolitan development. Manage urban density and prepare for further concentration by making productive factors more efficiently allocated among LGUs; improve land administration and management, and strengthen land use planning to make the land market function for growing density; increase investment in inter-regional connectivity infrastructure and mass rapid transport.

Improving city competitiveness to generate local economic development and jobs. Further simplify business registration, licensing and business permit renewal; improve transparency of business regulations; introduce simplified tax regime for micro-enterprise; expand incentives for collaboration between universities and business; consolidate business support systems; increase transparency and accountability of LGUs to strengthen incentives for reforms; modify the structure of LGU planning system to give priority to economic development targets.

Promoting inclusive growth by creating opportunities for the urban poor. Provide skills training and formal wage employment placement services for the poor in collaboration with the private sector; establish an integrated land and informal settler families (ISFs) information system; help secure property rights and provide home improvement grants; provide infrastructure and site development for formal but blighted communities and informal settlements that are in the process of securing land tenure; provide facilitation and capacity-building for community-driven slum upgrading; strengthen support to LGUs to enable them to fulfill their mandate to implement housing programs; implement key policy reforms in the areas of metropolitan development planning, housing finance, land use management and disaster risk management.

Strengthening metropolitan governance for better delivery of infrastructure services, and urban planning/management. Restructure the MMDA to strengthen its overall metropolitan-wide and inter-LGU planning and management capacity and service delivery; strengthen accountability systems for local service delivery through fiscal decentralization reforms; strengthen the capacity of LGUs for local revenue administration, and improve the institutional environment for debt financing.

Strengthening land administration/ management to promote city competitiveness and sustainable urbanization. Establish a unified land information system at the LGU level; develop a metropolitan-wide spatial data information system that will facilitate exchange and sharing of land records among agencies and make these accessible to the public; develop and implement a metropolitan-wide land tenure improvement program; develop a metropolitan-wide physical planning framework that takes into account future requirements for space, economic activities and incentives for updating of comprehensive land use plans; implement LGU-based shelter programs to help ISFs secure property rights through city-wide community upgrading strategies.

The actions above are by no means complete; they are some of the major reforms needed to help realize the benefits of MM’s continued urbanization. The LGUs comprising the metro have a critical role to play, not only to strengthen opportunities within their individual territories, but also to enable them to share in the benefits of metropolitan-wide agglomeration and economic growth. The national government also has crucial actions to take, without which improvements to existing conditions cannot be achieved. The private sector and civil society have roles to play, too, since they contribute significantly to what is actually built and become operational on the ground.

In addition to all these, the MMDA has the unenviable role of coordinating, synchronizing and harmonizing the actions of all the other stakeholders. But if all these reforms are to materialize, no less than the Office of the President needs to orchestrate and make them happen.

Nathaniel von Einsiedel is the former commissioner for planning of the Metro Manila Commission (now MMDA), served as regional director for Asia-Pacific of the United Nations Urban Management Program, and is a fellow of the Philippine Institute of Environmental Planners.