The Economic Status of Regions in the Philippines: Making Big Cities Attractive


(Part 3)

Even before the pandemic, there were already clear signs that highly congested urban areas like the National Capital Region (NCR) and Metro Cebu were growing more slowly than emerging regions like Calabarzon*, Central Luzon and Davao. The recent Philippine Statistical Authority (PSA) report on regional growth trends in 2021, the year in which recovery from the pandemic was evident, confirmed these regional dispersion trends. The NCR’s growth rate of 4.4% was below the national average of 5.6% and well below the growth rates of Calabarzon, Central Luzon and other “urban” areas. The question now arises as to what LGU officials and the private business sector in Metro Manila and Metro Cebu should do to keep their cities attractive to investors and families or individual households so that they can limit the sacralization of their municipalities. The answers to this question can also serve as a guide for new emerging metropolises like Iloilo, Batangas and Pampanga so that they can avoid the inconveniences of congestion.

We can find some of the answers to this question in a very enlightening article by Dr. Roberto de Vera, Senior Economist of the School of Economics at the University of Asia and the Pacific and a specialist in urban planning, which appeared in the Urban Markets Advisor regularly published by its School of Economics. The article, titled “Finding opportunities in post-pandemic city trends,” quotes world-renowned architect Norman Foster (who has a project underway in Makati) predicting future trends in how people will live during the post-pandemic era. Foster argues that these trends will be smaller-scale expressions of the saying that “the city is a powerful social and economic magnet” – a place that gives people the opportunity to meet and create wealth. He points out that these so-called post-pandemic trends were in fact already noticeable even before COVID-19 hit the world. These trends in the way people work, shop and relax have just intensified and are not really completely new in many urban areas around the world.

Before the pandemic, there were already quite a few of us in the traffic-choked Metro Manila area bringing work after hours on weekdays and weekends. Working from home (WFH) is not a product of the pandemic. It just became more prevalent and common because of the shutdowns. Even with the economy opening up, people continue to work from home to minimize the risk of getting infected. Telecommuting became the norm for most workers in schools, banks, fintech and other service industries where work could be done online.

A study on the future of work in the Philippines conducted by Sprout Solutions suggests that the majority of employees and HR professionals prefer telecommuting to be part of the work organization even after the pandemic has been brought under control. This preference is particularly evident in the BPO-IT (business process outsourcing-information technology) sector, which employs some 1.4 million people. The study reveals that 80% of the 485 professionals and 91% of the 8,194 employees surveyed prefer either a remote work configuration (telework all workdays) or a hybrid configuration (telework some workdays). To accommodate these worker preferences, businesses in Metro Manila and other congested cities can try to rent coworking spaces located in neighborhoods close to where their workers live. If these rented spaces are located in a residential area, the rents would most likely be lower than in central neighborhoods like Makati or Fort Bonifacio. The alternative could be to reimburse employees for rent paid to use approved coworking spaces.

While people would like to work from home or in places closer to home, Foster observes that like the smaller-scale city (e.g. Lipa, Iloilo, Dumaguete, Puerto Princesa), people would want workplaces that will be “much more social”. and “much more about the creative sense of community”. He sees a growing demand for “higher spaces, healthier, naturally ventilated, cooler spaces,” a demand that appears to have emerged when a Silicon Valley group became early adopters of social and creative spaces. People can still be persuaded to stay in megacities if they can work in safe and attractive workplaces. To achieve such desirable physical environments, businesses should retrofit their rooms so that stale air can be replaced with fresh air at a frequency supported by peer-reviewed studies. It would be even more important to schedule longer breaks between meetings so that workers can eat, stretch, chat and check their Instagram accounts.

Another trend that has been accelerated by leaps and bounds is online shopping. Due to the dire need during the pandemic, people ordered food and medicine and paid their bills online during the shutdowns. Many businesses have reaped and will continue to reap the benefits of this trend: mobile payments, home delivery, online retail platforms, packaging and takeout. Foster believes that as pandemic restrictions are lifted, we could see a “shift perhaps from the global economy to one that is more balanced between what the world can offer and what the local can offer” . We saw this play out during the pandemic when residential developments created a Viber group where food vendors could sell items such as bong (milk), papaya, sugar and adobo (stew). When malls had to close during lockdowns, sari-sari shops and neighborhood markets flourished. LGUs and private groups could work together to organize neighborhood markets similar to those traditionally held on weekends in Salcedo and Legaspi villages in Makati.

Another trend that has been highlighted during the pandemic is the urban design of compact cities. It can be observed that property developers moving to the outskirts like Calabarzon and the Pampanga Triangle are increasingly building what are known as ‘mixed-use developments’. Due to their experiences during the shutdowns, people have become accustomed to what Foster calls the “neighbourhood.” Another term for it is “the 15 minute town where within a comfortable 15 minute walk you can find a place to work, shop, and have the opportunity to dine, learn, enjoy leisure and s ‘soak up the culture’. We may need to reconfigure some older neighborhoods in Metro Manila so they can approximate the amenities of mixed-use communities. As Dr. De Vera comments on the term ‘mixed use’, “I remember two-story buildings in Binondo where the first floor would be a store, and the owner’s house would be on the second floor. A family living in Binondo at that time could be within a 15 minute walk of the market, a church, a restaurant. In Metro Manila, a pioneer of mixed-use development was Eastwood City set up by Megaworld in the 1980s and now followed by Bonifacio Global City and Nuvali.

In my own area of ​​higher education, Dr. De Vera cites the University of Asia and the Pacific (UA&P) as a virtual participant in the mixed-use development model. He explains, “Amid the rise of accessible and cheaper internet services and user-friendly video conferencing applications, universities have the opportunity to be part of these mixed-use developments, even if they are more than 15 minutes away. walk from their students. For example, UA&P School of Economics graduate courses delivered via Zoom are taken by professionals based in Taguig, San Juan, Makati and other locations in Metro Manila. Universities have the opportunity to expand the still untapped market of millennials and more mature professionals looking to retool after many years or decades of work. The pandemic has revived universities’ ability to “flip the classroom”, a phrase coined by Khan Academy founder Salman Khan, and offer personalized, self-paced learning programs to local and international students.

Older cities such as those in Metro Manila and Metro Cebu could undergo urban renewal under the strong and enlightened leadership of their respective LGU leaders so that some of their areas can still be turned into developments at mixed use to maintain their existing population or attract new inhabitants.

Dr. De Vera considers a possible reversal of the Balik Probinsiya (return to the province) movement. These mixed-use developments in older towns in the National Capital Region could offer reduced rental rates for artisans to open their shops which, for example, sell pottery and offer pottery workshops similar to those held in Ugu. Bigyan Potter (Tiaong, Quezon), Cornerstore Pottery Farm (Silang, Cavite), City Avenue (San Narciso, Zambales) and Crescent Moon Café and Studio Pottery (Brgy. Dalig, Antipolo City). It would be a way to repopulate old towns with micro and small and medium enterprises. This type of workshop and others like it in other industries would be a welcome respite for urban workers suffering from social media overload and Zoom fatigue.

Those wishing to subscribe to regular issues of Urban Markets, Industry Monitor and other economic publications from the UA&P School of Economics may contact [email protected]

*A portmanteau of the names of the southern Luzon provinces of Cavite, Laguna, Batangas, Rizal and Quezon.

Bernardo M. Villegas holds a doctorate. in Economics from Harvard, is Professor Emeritus at the University of Asia and the Pacific and Visiting Professor at IESE Business School in Barcelona, ​​Spain. He was a member of the Constitutional Commission of 1986.