Crossroads (Toward Philippine economic and social progress)
Philippine Star, 13 March 2013


During this decade – more dramatically in the last five years – Manila’s skyline has been going higher and wider in geographic spread. This property development in Metro Manila – the bigger metropolis – has been private sector driven. The changing skyline is riding high on a building boom that has been made possible by improving macro-fundamentals.

For now, I postpone commentary on policy issues concerning sustainability and risks associated from booming property values and instead recount the more agreeable story of this cityscape during these changing times.

The old and wider Manila. Though Manila has a few examples of rising towers, especially along Roxas Boulevard, the exciting property developments have taken place outside the old city’s boundaries, its suburban cities. Such growth has been over the years at the expense of Manila. Even the new reclaimed lands where new high rises are being constructed – around the Mall of Asia area – are located on the Pasay City side rather than in Manila itself.

Makati City. Makati’s current vertical expansions are displacing the low buildings that were erected during the city’s early period of growth, mainly during the 1960s and the 1970s. In the 1990s, with the lifting of the height restriction on buildings, taller edifices were constructed, even trebling the new space capacities on original land areas. Today, many new buildings are around 45 stories high – the tallest even reaching 52 stories.

Less developed fringes of Makati are also experiencing new construction and enormous change. Taller buildings housing new commercial and residential space have been redefining the shape of the city from earlier boundaries.

Examples of these include Makati lands along the Pasig River where an old power plant of Meralco and the campus of the International School used to be. In their stead some truly exciting towers have been built, converting it into a luxury class property development.

Bonifacio Global City – Taguig. The major new urban transformation is taking place here. The most modern buildings and grand structures are being erected in this former Fort Bonifacio (also formerly Fort McKinley), that was privatized in 1992. The Bases Conversion Development Authority (BCDA) is the government agency that oversees the privatization of the former military camp for private development. The biggest portion of the land area – the first phase – was bidded out for development in the mid-1990s. As the original sites and services were being developed, the Asian financial crisis crippled the company that won the bid.

The losing bidder, the Ayala group, thus recaptured the development project that it lost and undertook its development and the first buildings were erected during the first decade of the 2000s. Today, the construction pace has accelerated from fast to frenetic. The newest buildings host a mixture of companies and service industries that include schools, hospitals, restaurants and entertainment and a variety of shopping centers.

The area has been attracting company headquarters, banks, insurance companies, and BPO centers. Luxury hotels, and business hotels are locating, along with luxury tower residences. The signs of the times are clear. This development appears to be a natural outcome of scale expansion for the future.

The growing Makati business community is moving toward bigger space and Taguig is an extension of this space. The two cities are contiguous and are divided only by political lines.

Quezon City and neighboring cities. In the more spread-out Quezon City, developments have risen where big shopping malls had opened earlier. Henry Sy, the mall developer centered his SM department store in these malls and assured retailing success at large scale. Shopping malls were copied in big order by other property developers.

Sy’s business empire has been fueled by the rapid expansion of the SM retail network. Its department stores form the core of the SM malls, but they are amplified by a great conglomeration of small shops, entertainment centers and food stores. The retail empire has perfect synergy with its banking, commercial and property operations. It became dominant in attracting tourist remittances, thus expanding its banking role.

SM has been building multi-story condominium residences located near its malls and in communities where there is tight space and high demand along major routes toward Manila. These buildings exceed 40 stories high and they provide customer scale and complementarity with the shopping. Thus, new high towers are rising along EDSA – the circumferential route that has proved to be the main highway between Quezon City and along the places where rail stations are located.

The Ortigas properties in Quezon City, Mandaluyong and Pasig represented the next large private development of high rise buildings that took place initially in the 1970s. The Gokong-wei group, another major player, has invested big along the Ortigas/ QuezonCity/ Mandaluyong property area, where its shopping malls, BPO facilities, and other manufacturing operations are located.

The BPO (business process outsourcing) facilities and so on. One additional feature of this commercial and building boom is the growth of the BPO centers. The pioneer in such development is the Eastwood City in Quezon City, along the route of the so-called C-5 (the parallel circumferential road to EDSA), which has developed as an alternative highway connecting Metro Manila city points as well as the north and south of Luzon through Manila.

The Eastwood area is part of the Quezon City node and originally developed out of a huge wasteland of a former large textile company rendered bankrupt by high wage costs. The land was bought by a property group – Megaworld – that secured fiscal incentives to attract information technology companies relying on call center outsourcing.

The huge success of this group in this field has been copied in other locations where buildings were already being constructed. It partly explains the new frenzy for high rises in Makati and other parts of Metro Manila and is the reason for those lights shining all through the night while Manila sleeps. These buildings house the BPO centers that outsource solutions for enterprises located in the high income countries of the industrial world.

More construction is likewise happening where entertainment industries are complementing the new emphases in tourism promotion: big time casino and entertainment centers. This means more investments in hotels, high rise residences, and other commercial buildings that fill the projected demand. These projects are continuing to pace the building boom.