The document discusses the challenges and opportunities of urban development in the Philippines. Some key points: - Rapid urbanization is occurring, with nearly half the population living in urban areas and Metro Manila's population projected to reach 14 million by 2030. - This brings economic opportunities but also problems like traffic, lack of basic services, increasing slums and poverty, and environmental issues if not properly managed. - Private sector involvement through public-private partnerships is seen as important to addressing infrastructure needs while not overburdening public finances. - A national urban policy and stronger institutions are needed to better coordinate urban planning, housing, and service delivery across national and local governments.

1. Managing Urban Development
Josefina B. Bitonio, DPA
MPA 213 Management of Rural and Urban
Development

2. Urbanization is a driving force for growth and
poverty reduction. Globally, over 80 percent of
economic activity is concentrated in cities, and
cities are essential for lifting millions of people
out of poverty through the opportunities that
density and agglomeration can bring with jobs,
services, and innovation. However, if not carefully
managed and planned for, the benefits of
urbanization are not realized and can result in
congestion, slums, pollution, inequality and crime

3. Urbanization has been a significant phenomenon
globally, and has potentially been a key contributor to
progressive development. Over the last half-century,
the world has become increasingly urbanized. In East
Asia, over 50 per cent of people live in cities and,
today, the whole of Asia is home to more than half of
the world’s megacities. This trend is expected to
continue, with 75 per cent of today’s world population
projected to be living in urban areas in the next 35
years. This is an exponential increase from the 1950s
when the total population was only 2.5 billion.
https://asiahouse.org/challenges-opportunities-urban-development-philippines/

4. The Philippine experience sees
nearly half of the population residing
in urban centers, with almost 25 per
cent in the capital alone. Massive
urban sprawl across the south and
east ends has expanded the
metropolis into the Greater Manila
Area. This expanded metropolitan
area has a population of about 25
million, or a quarter of the country‟s
total population. Over the past two
decades, regions within and adjacent
to Metro Manila have sporadically
grown without proper planning, with
their capacities unable to keep up
with a growing urban population.
Urban Deconcentration
And Dispersal

5. The engine of urban
growth - 2/3 in most cities –
is the natural increase of
populations already in the
urban centers. Urban has
taken place in the regions
adjacent in Metro Manila,
especially in Southern
Tagalog, which is rapidly
soaking up people within its
available space. Urban
deconcentration has
proceeded unevenly in the
farther regions.
The main destination for
long-distance movers is
Calabarzon, which absorbs
27.7% of them, followed by
Metro Manila (19.7%) and
Central Luzon (13%) (PSA,
2012)

6. The Philippine‟s cities are spread across
the country's approximate 7,641 islands The
country has a total of 145 chartered cities,
33 highly urbanized cities, 5 Independent
Component Cities Component and the rest
are component cities of their respective
provinces (2017).

7. Manila
Manila is the capital and
second-largest city of the
Philippines One of 16
cities that comprise Metro
Manila, which has an
overall population of 12.8
million. per the 2015
Census. The Metro
Manila population swells
during the daytime, to
about 15 million

8. Manila faces even greater problems, related to the intense
poverty of much of the population migrating to the urban area
from the countryside. An estimated 4 million of the 11.5
million residents in the National Capital Region lived in slums
with an increasing at a rate of eight percent annually and is
expected to reach 9 million by 2050.
This would be nearly 60 percent of the projected
population at that time, and does not include slum
populations in the extensive suburbs beyond the limits
of the National Capital Region. (PIDS, 2010).

9. Manila’s Main Urban Challenges
• Rapid urban growth – The Philippines is one of
Asia‟s fastest urbanizing countries, with: 138 cities,
1,496 municipalities, and 42,027 barangays. Metro
Manila‟s population is projected to reach 14 million by
2030, while Mega Manila‟s population is projected to
increase from 23 million to 30 million by 2030
• Habitation challenges – More than a third of the
Philippines‟ urban populations are slum dwellers. The
country has 5 million informal settler families (ISFs), 2.2
million of whom are receiving government services.
Furthermore, 778,458 people live in danger areas.

10. Manila’s Main Urban Challenges
• Increasing unemployment and limited
economic growth – Increasing unemployment
and underemployment rates, and economic
growth that is limited in reaching the poor, are
reasons for the increase in urban poverty and
the number of informal settlements. Of key
concern is the quality of as estimates place
informal labor at 63-75 percent of total labor
force. Youth unemployment was an alarming
28.1 percent, more than four times the rates for
adults.

11. The government itself states that 92.5
percent of households had access
to sanitation in 2011 while less than
5 percent of households are
actually connected to a sewerage
network.
• Lack of urban basic services – There is an ever-
widening gap between demand and supply in
infrastructure services. Basic services are
simply insufficient in urban areas.

12. • Local Governments Units (LGUs) have been given
the principal role in urban and land use planning,
including socialized housing. At the macro level, the
absence of a strong national agency to assume the
urban mandate makes a fragmented and incomplete
institutional framework. The political cycle
contributes to the lack of strategies for urban
development.
Ineffective urban planning and land
management Local Governments
Units (LGUs)

13. • Increasing vulnerability of the urban poor –
Urban poverty in the Philippines is pegged at
14% in 2014 with 778,458 informal settlements
in danger areas. Given the deprived living
conditions – both in informal settlements and
relocation sites – the urban poor are more
vulnerable to climate-related risks.
• Water management issues – As described
above and depicted in the photos below.
http://www.newgeography.com/content/002198-the-evolving-urban-form-
manila

14. Philippines Urbanization Review:
Fostering Competitive, Sustainable
and Inclusive Cities
(World Bank, 2017)
http://www.worldbank.org/en/news/press-release/2017/05/29/philippines-
building-competitive-sustainable-and-inclusive-cities

15. Philippines, one of the fastest urbanizing
countries in East Asia, is at a critical
juncture. About 45 percent of Filipinos live
in urban areas today (WB, 2017).

16. About 45 percent of Filipinos live in urban
areas today. That number is expected to
more than double by 2050, to 102 million,
generating higher demand for housing,
basic services, transportation, and jobs.
http://www.worldbank.org/en/news/press-
release/2017/05/29/philippines-building-
competitive-sustainable-and-inclusive-cities

17. A JICA study cited how traffic congestion currently
robs Filipinos of up to US$55 million a day. The
study further noted that, if no intervention takes
place, this amount is projected to increase to over
US$130 million a day.
This has led to a host of infrastructure, health,
environmental and social problems, including
traffic congestion, burgeoning informal
settlements, disaster vulnerability, and threats to
water and food security.

18. Currently, Philippine cities generate more than
70 percent of the country‟s gross domestic
product, more than half of it from Metro
Manila alone. The country‟s seven largest
cities – National Capital Region, Metro
Cebu, Davao, Bacolod, Cagayan de Oro,
General Santos, and Zamboanga – provide
54 percent of formal jobs in the country.

19. Inadequate investments in urban infrastructure,
the report says, has led to traffic congestion, lack of
basic services and rising risk from natural hazards.
That undermines the efficiency of the city network
and exacerbates economic and social inequality.

20. City competitiveness is an important part of
successful urbanization, because it creates jobs,
raises productivity and increases people‟s
wages,” But that is not enough. Cities need to be
inclusive and sustainable. They should have good
land use management and strong institutions (Mara K.
Warwick, World Bank Country Director, 2017) ”,

21. City competitiveness is an important part of successful
urbanization. A competitive city facilitates its firms and
industries to create jobs, raise productivity, and increase
the incomes of citizens over time. At the same time, it is not
possible to achieve these objectives without strong
institutions, social inclusion, resilience, and environmental
sustainability. All of these elements are important to
harnessing the benefits of urbanization and must be
enabled by both national and local governments.

22. RisksandOpportunities

23. Risks and Opportunities
Cities are the main centers of consumption,
resource use, congestion, and waste. Eleven of
the 20 most polluted cities, and 15 of the 20
most vulnerable cities to rising sea levels, are
in Asia.

24. Cities can achieve resilience if they will elevate
their competitiveness level in key indicators, such as
transportation and infrastructure, technology
readiness, health and safety, environment, and ease
of doing business. This initiative can be a potentially
viable long-term solution to mitigating the impact of
climate change. However, more work clearly needs to
be done and cooperation and synergies between the
public and private sectors will be integral to taking this
initiative forward.

25. Aside from hard infrastructure, there is a need to
ensure that the right level of governance, urban
management and planning is in place to support Metro
Manila; there is a need for the creation of a central
institution that would spearhead a cohesive and strategic
planning and execution of a national urban agenda –
from land use and urban planning to infrastructure
development while ensuring the sustainability and
resilience of the cities. While the local government units
continue to do their part in addressing the challenges,
the lack of an integrated urban management framework
and execution falls short in enabling seamless
connectivity across the whole spectrum.

26. Despite all these problems, cities are the
growth drivers of most economies, particularly
when one looks at clusters of cities. Urban density
can actually be a positive contributor on many
fronts. It is usually accompanied by lower poverty
incidence, increased productivity, and steeper
economic growth. This is true across the board,
and even more so as the city size grows. The high
concentration of industries and services in highly
urbanized cities has attracted job-seekers to
relocate in droves to find employment and gain
better access to education, healthcare and overall
quality of life.

27. Greater Private Sector Participation
in Urban Development
Since a developing country such as the
Philippines would have significant constraints
investing in capital assets for infrastructure, public
services, and even disaster management, the
government has increasingly involved the private
sector in providing these services to address these
challenges without straining public finances or
burdening the population with higher taxes.

28. Much more needs to be
done and I believe the private
sector can still intensify its role
in helping to develop more
liveable communities within and
outside the metropolis that
encourages decongestion and
improves the standard of living
significantly.
The private sector, for its part, has, over time, made
significant strides in helping to augment the
Philippines‟ urbanization challenges, particularly in
the areas of transport, communication, property
development, and disaster management.

29. Local government in planning and
building key infrastructure requirements
around our developments, including
access roads, pedestrian walkways, and
water distribution.

30. Philippines‟ landmark Public-Private Partnership
(PPP) initiatives. In 1997, Ayala won the country‟s
first PPP programme, which was water
privatization for the east zone of Metro Manila.
Over the last 18 years, Manila Water has greatly
improved water distribution in the east zone,
driving down non-revenue water to 11 per cent
and bringing water to 99 per cent of the
households in the area. Today, Manila Water is a
leader in the water sector, not only in Manila, but
in other parts of the country, as well as in
Southeast Asia.

31. More recently, the government has started a PPP
programme that includes several potentially impactful
transport infrastructure projects in rail, toll roads, and
airports. This should create an ecosystem that is
conducive for urban success. Since the auctions under
the PPP framework are conducted in a considerably fair
and transparent manner, the projects have attracted
great interest from both local and foreign investors.

32. From what we have seen in the
Philippines, good public governance is
crucial for implementing successful PPPs.
Multiple stakeholder participation and
access to information for informed
dialogues are important, starting from the
planning process to the implementation.

33. Liberalization efforts of
the telecommunications
sector also in the 1990s and
established Globe Telecom.
From a virtual monopoly back
then, the telecommunications
industry today has spawned a
host of entrepreneurial activity
and „cottage industries‟ in
various mobile content and
services. More importantly,
the vast improvement in the
telecommunications
infrastructure has given rise
to the business process
outsourcing industry, currently
one of the main growth
engines of the country.

34. 6.9
6.6
2016 2017

35. Clearly, much needs to be done in
infrastructure development. Based on the
World Bank‟s estimates, the Philippines
would need to hit spending levels of at
least 5 per cent of GDP in infrastructure
projects to catch up with its Southeast
Asian neighbors.
Our average infrastructure
expenditure since 2009 has
only been 2.2 per cent of
GDP. According to DBM,
infrastructure spending up
15.4% in 2017.

36. According to the World Economic
Forum Competitiveness Rankings, the
Philippines has the worst overall
infrastructure among the ASEAN-5
countries in since 2010. The country‟s
poor score in public infrastructure has
pulled down its overall competitiveness.
https://www.dbm.gov.ph/index.php/secretary-s-corner/press-releases/list-of-
press-releases/204-financing-the-philippine-golden-age-of-infrastructure

37. This dismal state of public
infrastructure cannot, and
should not, be allowed to
continue. Hence, the
Duterte Administration has
embarked on a bold „Build,
Build, Build” program. This
will usher in the “Golden
Age of Infrastructure”, the
boldest infrastructure
development program in
recent Philippine history.

38. Decisive interventions are
imperative at the city level
However, it is important to manage the
„quality of that density‟. Cities like Metro
Manila need to ensure that urban growth is
supported by adequate infrastructure,
such as adequate power, water, roads,
transport systems, flood control, and
waste management, to name a few.

39. Report‟s Proposal
• The report calls for more affordable mass
transport, such as metro rail transit and bus
rapid transit systems, to raise productivity
and improve the welfare of commuters. It also
recommends that the government simplify
licensing requirements to attract more
investment, improve infrastructure, focus on
affordable housing and the delivery of basic
services, and encourage poor children to
finish secondary education for better job
opportunities.

40. • Urban density creates critical mass,
attracts diversity, and makes
possible the „creative combustion‟
that brings life, new ideas,
entrepreneurial vigor, and an
innovative verve to urban
communities. Today, when people
think of places to live, work, invest,
or visit, they think not so much of
countries; they think of cities.

41. • “Strong institutions and good governance are
important for ensuring better management of
cities, delivery of social services, and a good
environment for job creation,” “A good starting
point for this policy conversation can be a
comprehensive national urban policy that
establishes a lead agency for urban
development and housing, and clearly defines
the roles of national and local governments”
Abhas Jha, World Bank’s Practice Manager
for Urban and Disaster Risk Management
for East Asia and the Pacific, 2017).

42. Broadening Access to Serve
Communities
• business groups in the Philippines are increasingly broadening
access to products and services that touch on basic needs to a
much larger segment of society. In addressing our urbanization
challenges, it is essential that we aim for progress that is felt
across all segments of the population. The Ayala group have,
over time sought ways to provide products and services that
meet a broader set of needs, at varying price points. They
believe our businesses can play a role, in some measure, in
providing practical and realistic solutions to address some of the
challenges confronting the broader society given that we
participate in industries that touch on basic human needs –
housing, banking, telecommunications, water distribution, and,
more recently education. These are just a few examples of what
we call „shared value‟.

43. Overall, these initiatives can
create social inclusivity while yielding
attractive returns, and creates a
more holistic developmental
approach to communities and to
addressing challenges of growth and
urbanization. This has driven us as a
group of companies to seek creative
and innovative ways to broaden
access to our products and services
with a view towards meeting the
needs of a large segment of
unserved communities, particularly
those at the base of the economic
pyramid.

44. • Supporting the implementation of this core value is our
group-wide sustainability policy. This covers
operations, products and services, the supply chain,
our human resource practices, community
involvement, and our
overall management
approach.
The Ayala Group have started benchmarking against
global sustainability indices and best practices, and
we have implemented a comprehensive 360 degree
framework to monitor key sustainability indicators
and metrics that they focus on.

45. Conclusion
• In summary, the sustained economic growth and urban
sprawl have resulted in overcapacity in infrastructure and
increased vulnerability to disasters. However, population
density per se is not the problem. In addition to hard
infrastructure, we need to ensure that the right level of
governance, urban management and planning is in place
to support Metro Manila. I believe there is need for the
creation of a central institution that would spearhead a
cohesive and strategic planning and execution of a
national urban agenda, where clear accountabilities are
defined.
•Second, there is a growing importance for government
and private sector collaboration to address some of the
key urbanization challenges, particularly in critical sectors
such as infrastructure and shared value creation.

46. • As a final note, as this unprecedented
positive environment taking place in
the Philippine economy is poised to
continue in the next few years, it is
imperative that we act together to
intensify our efforts to address the
rapid urbanization. I believe that to a
large extent, this entails collaborative
efforts across multiple sectors – the
government, the private sector, the
civil society, and multilaterals. This,
combined with a healthy sharing of
expertise and best practice among
peers, can well fortify our efforts in
dealing with urbanization challenges

47. Photo Credit
• Google
• Lino Tabangin

48. • Jaime Augusto Zóbel de Ayala Chairman and
Chief Executive Officer of Ayala Corporation
Challenges and opportunities for urban
development in the Philippines
• https://asiahouse.org/challenges-
opportunities-urban-development-philippines/
(Accessed Aug 12 2018)
• http://www.worldbank.org/en/news/press-
release/2017/05/29/philippines-building-
competitive-sustainable-and-inclusive-t
(Accessed Aug 12 2018) ies
Sources

49. • https://asiahouse.org/challenges-
opportunities-urban-development-
philippines/ Accessed Aug 13, 2018
• http://www.newgeography.com/content/0021
98-the-evolving-urban-form-manila.
Accessed Aug 13, 2018
• https://www.humancities.co/2016/12/manila-
urban-challenges-overview/. Accessed Aug
13, 2018
• https://www.dbm.gov.ph/index.php/secretary-
s-corner/press-releases/list-of-press-
releases/204-financing-the-philippine-
golden-age-of-infrastructure Aug 13, 2018