Congested capital

Various studies have chronicled the rapid growth of Metro Manila, a product of the long economic boom that lured factories, corporations and migrants to the metropolis like a magnet. Today, however, this expansion has triggered a far worse problem: congestion.

It is not hard to imagine how a heavily congested metropolis can trigger a host of problems, the monstrous daily traffic and the high pollution level being the most visible. With a population of about 12 million, Metro Manila accounts for 13 percent of the nation’s total yet its land area covers a mere 0.21 percent of the country. According to the latest available official data, Metro Manila is the most populated area in the Philippines with 19,137 persons per square kilometer. This population density is 62 times higher than the national average of 308 per square kilometer. The capital region’s infrastructure has also been stretched way beyond its limits. While its road network accounted for less than a fifth of the country’s total, the 2.1 million motor vehicles registered by the Land Transportation Office in Metro Manila last year accounted for nearly a third of the total for the entire Philippines.

A recent study by KMC Mag Group, a Philippines-based real estate brokerage company and an international associate of Savills (a real estate services provider listed in the London Stock Exchange), warns that the congestion in the capital region poses significant threats to the overall sustainability of the country’s economic growth. “The long-term economic growth of the Philippines is dependent on whether or not it can address the issue of decongestion and make smart, sustainable decisions to improve its infrastructure,” KMC Mag Group notes.

The root cause seems to be a government that has been Manila-centric for the past decades. Except for a few growth areas like Cebu and Davao, progress has become evident mainly in Metro Manila because the bulk of government infrastructure spending for roads and bridges, telecommunication and power facilities has been allocated to the national capital region. As a result, investors naturally flock to Metro Manila, leaving out the other provinces in the growth process. Investors would not locate their factories in the provinces if there were no roads to transport their goods or power facilities to ensure sufficient electricity supply to run their operations.

The solution, as KMC Mag Group suggests, is for the government to invest in infrastructure to improve the transportation network and integrate the different networks nationwide to enable the growth of more urban areas outside Metro Manila. “The only thing the Philippines needs is the political will to make these large-scale changes possible,” it points out.

Building the necessary infrastructure has remained a weak spot for the country. Says KMC Mag Group: “The aging roads and the declining quality of the public transport system are deterrents for both the locals and the expats who live and work in the Philippines. If that’s the first impression they get, it will be more difficult to get them to buy into what else the Philippines offers.”

Tourism is one area—a so-called low-lying fruit—that the government can focus on to promote the growth of the regions and, in the process, decongest the metropolis. The timing cannot be more propitious, with the Department of Tourism having dubbed 2015 as “Visit the Philippines” year and the number of visitor arrivals increasing steadily. The government must invest in this area in order to grow this industry and also encourage the private sector to help build the other infrastructure, particularly hotel rooms.

We agree with KMC Mag Group that the biggest hindrance to the growth of this sector is the lack and the quality of the infrastructure. Aside from expanding its airport facilities, the country also needs to increase the number of hotel rooms in order to accommodate more international visitors; otherwise the shortage would result in less tourist-friendly (read: expensive) room prices.

The prospect is bright in developing more urban areas outside Metro Manila. As KMC Mag Group points out, if the Philippines can bring the growth in Manila to other areas within the country and support that with infrastructure, there is no reason it cannot fulfill its promise of being the next Asian miracle. The government, with the help of the private sector, needs only to focus on providing the necessary infrastructure to transform this into reality.