Decongestion seen as key to sustaining growth in Metro Manila

Manila Bulletin.Com by Madelaine B. Miraflor, 11-27-2014

Amid slower economic growth in the third quarter, a real estate report suggested that in order to sustain the country's overall positive economy, it's capital, Manila, has to be decongested, which should be backed by the "necessary infrastructure".

During the third quarter, Philippine gross domestic product went up 5.3 percent, slower than the 6.4-percent growth it did in the same period last year.

Brought about by weak government spending, this is the slowest increase the GDP had since 2011.

KMC MAG Group noted in its third quarter report that the Philippines will need to focus on two key issues-decongesting Metro Manila and building the necessary infrastructure-in order to stay ahead and to sustain the economic momentum.

"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," said Michael McCullough, Managing Director of KMC MAG Group.

"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," McCullough added.

The real estate services agency highlighted that efforts to decongest have become more visible, with business parks and special economic zones being built in provinces outside Metro Manila, such as Cavite, Laguna, and Batangas, and in areas outside of Luzon, such as Cebu, Davao, Cagayan de Oro, and Zamboanga.

Meanwhile, within Metro Manila, developers are exploring Quezon City and Bay City in Pasay as potential central business districts.

"Previous investments by the government and the private sector have shown that these areas can grow into central business districts," said McCullough.

"For both Quezon City and Bay City, it will be critical to provide more public transport options and ensure that social services are in place for these two areas to fully develop," he added.

McCullough also pointed out that spatial planning will be critical to ensuring that new business districts will not experience the same degree of congestion.

"The new business districts will need to move away from building because the demand is there or because the workforce is there, and instead move toward managing the diverse spatial needs of various stakeholders," said McCullough.

To support these decongestion efforts, he 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 country.

The World Economic Forum 2014-2015 Global Competitiveness Report showed the Philippines still ranked low in terms of transport infrastructure, with its seaport infrastructure ranking 101st and its airport ranking 108th.

KMC MAG Group, Inc. is an international real estate services firm based in the Philippines.