Is there a bad infrastructure in the Philippines?

Philippine capital is bursting at the seams

"Manila will be a dead city in 25 years", said the Philippine President Rodrigo Duterte, who was not at a loss for drastic words, at the end of 2017. He particularly emphasized the catastrophic traffic situation. As a recipe against the collapse, Duterte presented the partial relocation to a newly built New Clark City, outside the core city.

The metro Manila metropolitan area is home to over 13 million people. In addition to the City of Manila itself, 16 sub-cities were merged over 636 square kilometers in the capital region. With around 21,000 inhabitants per square kilometer, Manila is one of the most densely populated cities in the world. If you look at the entire Greater Manila (or Mega Manila) area, according to the United Nations, with an estimated 24 million people, it is actually the fourth largest megacity in the world.

Greater Metro Manila is rampant

In addition to modern business districts with high-rise buildings, there are the simplest residential areas and slums. The living conditions therefore differ significantly. On average, the gross domestic product per capita is around 9,300 US dollars (US $). Around 20 percent of residents live in informal accommodation, according to the government.

indicator 2017
Population (million) 13
Area (qkm) 620
GDP / capita (US $) 9.300
Population density (inhabitants / km2) 21.000
Share of households with access to electricity (%) *) 97
Electricity consumption per capita (kWh / year) 700
Length of public transport, rail-bound (km) 46,6
Waste per inhabitant (kg / year) 256
Proportion of the population with access to drinking water (%, official) 99

Basic data Manila

*) Urban electrification rate Philippines 2016

Sources: Philippines Statistics Authority, Department of Transport, World Bank, research by Germany Trade & Invest

But all are affected by the bad traffic situation. Due to the high number of private cars, traffic jams are piling up, and the jeepneys that carry public transport - converted old military jeeps - pollute the air. According to a study by the Japan International Cooperation Agency, traffic jams in Manila in 2012 cost US $ 45 million a day. This number is expected to triple by 2030. The Internet route planner Waze even rated the traffic jam situation as the worst in the world in 2015, even if other rankings see other cities as "ahead".

The government's response is currently desperate. Cars with certain license plates are only allowed on the streets on certain days, and on the main EDSA artery in August 2018, cars with several passengers were only allowed to drive. The latter rule had already failed in Jakarta. The government is expressing interest in modern traffic management systems, but in many cases the basics are already lacking.

A massive expansion of the transport infrastructure is therefore on the agenda; the development plan for 2017 to 2022 provides for up to US $ 35 billion. The first subway line, co-financed and built by Japan, as well as the extension of LRT Line 1 are currently about to be implemented. The light rail line MRT line 7 is currently under construction, the 22.8-kilometer route is to be completed by 2020. Tenders for equipment are ongoing.

So far, Manila has only three rail-based transport lines, but these are already being used to capacity and are still inadequately maintained. There are also buses and taxis. The internet transport service provider Grab is developing into the top dog. The jeepneys, which are to be gradually converted to electric drive, are also characteristic of the cityscape.

Sustainable metropolis New Clark City planned

The development of Clark should bring relief. The former American military base in the province of Pampanga north of the greater Manila area has proven itself as a special economic zone for foreign investors and, according to the government's request, is to attract even more industrial settlements from Manila. Now, with the New Clark City, a sustainable metropolis is to be built out of the ground. Similar ideas have already come to other countries, not necessarily with great success.

The expansion of Clark is a done deal, major infrastructure project plans are already on the drawer. This includes a train connection from Manila to Clark, a freight train connection to Subic and the expansion of the airport into the main hub of the country, because the capital's airport NAIA is considered hopelessly overloaded.

A particular focus is on resilience to natural disasters. Because in this respect Metro Manila is considered to be the most vulnerable metropolis in the world after Tokyo. Floods, triggered by heavy rains and even typhoons, occur regularly. There is also a high risk of earthquakes and volcanoes are not far.

Investment in Manila's water supply in the pipeline

The water supply in Manila is ensured by two companies: In the eastern part of the city, Manila Water Company (MWCI) is responsible for 6.6 million people, in the western part Maynilad Water Services for around 9.4 million. After privatization in 1997, both received a 25-year concession from the responsible authority Metropolitan Waterworks and Sewerage System (MWSS). Even if both companies were able to significantly reduce the loss rate of drinking water, at MWSS it was still 31 percent at the end of 2017.

MWCI plans to significantly increase investments in the period from 2018 to 2027. The focus is on a sustainable water supply through the expansion of the water supply and water disposal infrastructure in East Manila. Maynilad is also planning extensive investments: In the next five years, four new sewage treatment plants are to be built, in addition to the existing 20. Experts estimate that only around 15 percent of households are currently connected to sewers.

In the Economist Intelligence Unit's ranking on quality of life, the Liveability Index, Manila was ranked 104th in 2017. This means that the metropolis has remained practically unchanged in the lower ranks in recent years. After all, it is better placed than cities like Jakarta and New Delhi, but still lags behind most major Chinese cities. Health care and the stability factor were rated relatively poorly. This conceals, for example, crime and the threat of terrorism, both of which are higher in a regional comparison. The infrastructure was rated better, whereby in the case of Manila the individual sub-rankings were very even.

Contact addresses

Further information on the economic situation, industries, business practice, law, customs, tenders and development projects in the Philippines can be found at http://www.gtai.de/philippinen. The page http://www.gtai.de/asien-pazifik offers an overview of various topics in Asia-Pacific.