· Mr. Jaime Augusto Zobel de Ayala, Chairman and CEO, Ayala Corporation
· Undersecretary Rolando Tungpalan, National Economic Development Authority
· Undersecretary Austere Panadero, Dept. of Interior and Local Government
· Mayor Francis Garcia, Secretary General, League of Cities of the Philippines
· Mr. George Barcelon, President, Philippine Chamber of Commerce and Industry
· Ms. Ruby Haddad, Regional Coordinator, Homeless People’s Federation
· Mr. Cielito Habito, Professor, Ateneo de Manila University
· Ladies and gentlemen
On behalf of the World Bank, let me extend a very warm welcome to you all this morning.
Urbanization is a driving force for growth and poverty reduction. Globally, 54 percent or about 4 billion live in cities today. Over 80 percent of economic activity is concentrated in cities, and cities are essential for lifting people out of poverty. Indeed, no country has gone from middle-income to high-income status without urbanization.
Being 48% urbanized and home to home to roughly one-third of the world’ urban population, the East Asia and Pacific region has become a global powerhouse, generating close to 33% of the world’s GDP in 2010. Of the world’s megacities, 12 out of the top 20 are in this region. Metro Manila ranks as the 18th largest megacities in the world. Much of the region’s rapid urbanization is happening in China where the government has been instrumental in strategically directing urbanization to promote growth and prosperity. Even without China’s contribution to urbanization, the region has experienced high rates of urban population growth averaging 2.5% per annum.
The East Asia and Pacific region also stands out for its impressive rate of poverty reduction. In 1990, the region had the highest level of extreme poverty in the world at 56.2%. 20 years later, the rate had declined to just 12.5%. China, for example, lifted about 536 million people out of extreme poverty in those two decades. This region’s tremendous achievement in poverty reduction is largely due to economic growth driven by urbanization. In 2015, almost two-fifths of global economic growth occurred in this region. This was twice the contribution of all other developing countries combined. Among them, the Philippines and Vietnam are expected to have the highest growth potential in the region in the next couple of years.
The higher productivity of urban areas stems from agglomeration economies based on the high and increasing density of cities. Rising population and economic densities reduce transport and communication costs, lead to frequent interactions, enable finer specialization and knowledge spillovers, and heighten competition in product and labor markets.
As one of the fastest urbanizing countries in the region, urbanization presents a great opportunity for economic growth, job creation, and poverty reduction for the Philippines. Today, about 45 percent of the people live in cities. By 2050, that number will increase to 102 million people, or about 65 percent of the total population. Cites in the Philippines generate more than 70 percent of the national GDP, with Metro Manila dominating more than half of it. 7 largest cities host 54 percent of formal jobs in this country.
Yet, the speed and scale of urbanization brings challenges. Demands for housing, basic services, functional transport systems, and jobs continue to surge. And as cities fail to keep pace with the rapid urbanization, informal settlements grow and inequality widens. Countries such as China, Cambodia, Indonesia, Vietnam, and the Philippines experience substantial disparities. In the Philippines, the richest 20 percent of the population outspend the poorest 20 percent by about nine times.
To address the complex, deep-rooted challenges, the World Bank, along with the Government of the Philippines, undertook the Philippines Urbanization Review. The aim was to understand how the country can better harness the benefits of urbanization. I will refrain from sharing the findings as my colleague, Abhas Jha, will make a detailed presentation later.
I would just like to note that the most remarkable aspect of the Urbanization Review is that it is comprehensive. Rather than just looking at specific sectors such as roads or housing, we tried to come up with a strategic view of how the Philippines might advance the process of urbanization.
City competitiveness is an important part of successful urbanization. A competitive city creates jobs, raises productivity, and increases the incomes of the people over time. But that is not enough. Cities need to be inclusive and sustainable, defined in our report as having good land use management and strong institutions. All elements of competitive, sustainable, and inclusive cities need to come together to harness the benefits of urbanization.
Over 100 million people will be living in cities by 2050 in the Philippines. In order to prepare for that, the Government, the private sector, and the civil society have to think together not only about basic services but about the fundamental design elements of cities. What should cities look like 10 years from now?
The Philippines is at a critical juncture in its urbanization. Decisions made now will affect how cities grow and how they can contribute to improving the lives of millions of Filipino people.
We hope that our Urbanization Review can initiate a discussion on this important topic, and together, commit to taking concrete actions.