Decongesting M. Manila key to sustained growth
Inquirer.net by Daxim L. Lucas, 11-26-2014
The heavily congested metropolis and the insufficiency of
infrastructure to support the pace of development pose significant
threats to the sustainability of the Philippines' upward economic
trajectory, a real estate consulting firm said Wednesday.
In a briefing, officials of KMC Mag Group said local policy
makers need to focus on decongesting Metro Manila and building the
necessary infrastructure in order to stay ahead and to sustain the
momentum it was enjoying.
"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 managing director Michael McCullough said in a
"If the Philippines can bring the growth in Manila to other
areas within the country and support that with infrastructure, then
we see no reason why it wouldn't fulfill its promise of being the
next Asian miracle," he added.
Amid this warning, the firm said the Philippines' continuing
economic growth has enabled it to become one of the more popular
investment destinations in Southeast Asia.
While other countries are still recovering from the effects of
the 2008 financial crisis, the Philippines has grown steadily,
posting a 6.2-percent growth in the second quarter of 2014 and
getting credit rating upgrades from international ratings
The real estate services company said efforts to decongest the
metropolis had e become more visible of late, with business parks
and special economic zones being built in provinces such as Cavite,
Laguna and Batangas, and in areas outside of Luzon, such as the
cities of Cebu, Davao, Cagayan de Oro and Zamboanga.
Within Metro Manila, developers are exploring Quezon City and
the so-called 'Bay City' on the reclaimed area by Manila Bay as
potential central business districts, which could potentially
spread out job opportunities, foot traffic, and even investments
In particular, McCullough noted that Quezon City has shown a lot
of potential, given its size, the presence of government
institutions, educational institutions, and major broadcasting
networks, and its extensive road and railway network.
To support these decongestion efforts, McCullough recommended
that-as more urban areas be set up outside of Metro Manila-the
government must invest in infrastructure to improve the
transportation network and integrate the different networks around
"The Philippines has the best credit ratings it has ever had,"
he said. "It also has the knowledge and support of institutions
such as the Japan International Cooperation Agency, among others.
The only thing the Philippines needs is the political will to make
these large-scale changes possible."
As the Philippines works on decongesting Metro Manila and
creating pockets of growth outside of the capital, one area that it
will need to focus on is building the necessary infrastructure,
which remains a sore spot for the country, the firm said.
The World Economic Forum 2014-2015 Global Competitiveness Report
showed that the Philippines still ranked low in terms of transport
infrastructure, with its seaport infrastructure ranking 101st and
its airport ranking 108th.
"Filipinos are looking to the government and to developers to
help them make traveling to work, school, or to their homes easier,
to develop spaces for them to live, play, and work," McCullough
said. "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."
McCullough shared that support infrastructure is critical for
the manufacturing and services sector.
"The industry and service sectors contribute to over 70 percent
of the country's economic output," he said. "The government has to
ensure that manufacturers have the roads and transport networks
they need to move raw materials and finished goods from one area to
another, and that they its citizens enjoy a high-quality public
Another key industry that requires support infrastructure is
With the Department of Tourism having dubbed 2015 as "Visit the
Philippines" year, and with visitor arrivals to the Philippines
increasing steadily, the country will have to invest in this area
in order to grow the industry and compete with its Southeast Asian
"The hotel and leisure industry is all about access," McCullough
pointed out. "The biggest hindrance to growth for this sector the
lack of and the quality of the infrastructure. The Naia renovation
has been purely cosmetic, and there is still a need for more
runways or airports in order to absorb more transit arrivals. We
also need to increase the supply in order to accommodate more
international visitors, otherwise the shortage would result in less
tourist-friendly room prices."