Philippines: Building Competitive, Sustainable and Inclusive Cities

May 29, 2017

MANILA, MAY 29, 2017 – Philippines can harness the benefits of rapid urbanization by making cities more competitive, inclusive, and better governed, according to a joint study by the government and the World Bank.

The study, Philippines Urbanization Review: Fostering Competitive, Sustainable and Inclusive Cities, says the Philippines, one of the fastest urbanizing countries in East Asia, is at a critical juncture. Decisions made now will affect how cities grow and how people benefit from urbanization through economic growth, job creation and poverty reduction, the report says.

“Central to development is the role of cities,” said National Economic and Development Authority (Neda) Undersecretary Rolando Tungpalan. “Cities drive growth and are providers of knowledge and innovation. To enable cities to perform that role, we are investing heavily on infrastructure and human capital or health and education.”

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.

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

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.

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.

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.

“Strong institutions and good governance are important for ensuring better management of cities, delivery of social services, and a good environment for job creation,” said Abhas Jha, World Bank’s Practice Manager for Urban and Disaster Risk Management for East Asia and the Pacific. “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.” 

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