On reviving the dying city of Manila

Only fools do the same things over and over again, expecting different results. The people of the city of Manila proved they are no fools. Last May, they shunned Alfredo Lim's bid to become Mayor for yet another term, a role he miserably failed at between the years 2007 to 2013. Under Mayor Lim's watch, the city plummeted to the bottom of the NCR in terms of competitiveness, quality of life, infrastructure and human development.

It is lamentable that Manila has become but a shadow of its former self. ''The Pearl of the Orient'' it no longer is. Today, illegal vendors roam amok, jeepneys, tricycles and pedicabs ply their routes with no regard for the law, while illegal settlers live under bridges and waterways. Even worse, the city has become a cesspool of crime, being the nation's capital for carnapping and among the top 10 in kidnapping. Its police force is involved in extortion, drug pushing, kidnapping and robbery. In fact, just last week, one of its own, Police PO1 Reggie Dominguez, was arrested for robbery and homicide.

A study done by the University of the Philippines reveals that Manila has the highest poverty rate among all cities in NCR. Naturally, it has one of the highest unemployment and homeless rates as well. On the fiscal side, it is drowning in debt with long-term loans amounting to P3.5 billion, not counting its current obligations which amount to well over P1 billion. This year, it is poised to fall further in debt as expenditures outstrip revenues. Rough calculations show that it will have a shortfall of P1.3 billion, which, again, will be financed by debt.

No surprise that public school teachers' salaries are delayed, and hospitals are lacking in medicines and supplies. Bad management has also taken a toll on the city's environs, where squalor, uncollected trash and nightmare-like traffic abound.

The city is no longer the face of the nation as old-timers would like to believe; Makati and Taguig are. If anything, Manila is its armpits. I reckon that Mayor Lim did more damage than good.

Enter Mayor Estrada

Estrada beat Lim in the polls by a margin of 11 percent and promises to restore Manila to its former glory. In his inauguration speech, he said he would clear the city of vendors that cause traffic, obliterate petty crimes, clear waterways of illegal settlers, and physically clean its highways and by-ways within his first 100 days. On a more long-term basis, Erap wants to rid the city of corruption.

The newly installed Mayor also wants to restore Manila's competitiveness. This means putting the city's finances in surplus territory and attracting businesses back to its towns and districts.

To address the city's shortfall in revenues, Erap is calling for an overhaul of the tax collection system to rid it of leaks borne out of corruption. He intends to rationalize both real estate taxes and business taxes, to put them at par with the rest of NCR.

To attract businesses back to the city, Erap intends to create a business climate conducive to doing business. To this end, he promises to provide the basics: a reliable police force, efficient city services, competitive business taxes, an easy to navigate bureaucracy, and ample infrastructure.

All these are easier said than done. But before dismissing Erap's intentions as nothing more than a pipe dream, consider how PNoy turned an underachieving economy plagued with corruption and inefficiencies to the fastest growing economy in Asia in just three years. I reckon that with focused management, it can be done. So let us all give Erap a chance to prove his mettle.

Manila Needs A CBD

The only way Manila can get out of its downward spiral is for it to attract large institutional investors like banks, business solutions companies, IT services companies, global trading posts, and the like. Investors of this sort have the capacity to bridge the city's employment gap and provide it with recurring revenues to wipe out its financial deficits.

But the sad reality is, Manila does not have the space to house them. These companies need a proper central business district with grade-A offices and underground fiber-optic telecommunication and power lines to render them weather-proof. They require wide roads for speedy mobility and ample housing for the people who work there. Neither Malate, Ermita, Quiapo, Paco, San Andres nor Tondo are suitable alternatives due to its density and insufficient infrastructure. The only solution is to create more space.

This is why I was disappointed to hear that City Hall rejected the initiative of the Tieng brothers to reclaim the area west of the CCP complex. The area up for reclamation is not part of any living ecosystem. And contrary to what critics say, it will not block the sunset view as seen from the Manila Yacht Club to the U.S. Embassy.

When completed, the city of Manila would have had an additional 148 hectares of prime space, or roughly 70 percent of The Fort's size, to house a proper CBD. Out of the 148 hectares, 30 hectares will revert to the Philippine Reclamation Authority while five hectares will be donated to the City of Manila for its public offices. The Tieng brothers also planned to build a proper harbor to accommodate the lucrative luxury cruise circuit, something our existing north and south harbors are not capable of.

The benefits to the city would have been immense. On the short-term, the Tiengs are ready to plunk in $1.2 billion on the reclamation project alone, which could have created 20,000 jobs for Manileños. On the long-term, it would have generated as much as P10 billion a year in recurring income for City Hall. All this at no cost to the city.

I urge Erap to seriously reconsider their position on the reclamation plan. The simple reality is, without a proper CBD, Manila cannot compete with the likes of Makati, Taguig, Alabang, and soon, Quezon City (with its Eton Centris and Vertis North CBD) in attracting institutional investors. And without big-ticket investors, Manila will continue to lose its importance as a city. Painful, but true.

Attracting Businesses

Erap can learn a thing or two from the Philippine Economic Zone Authority (PEZA) on how to effectively attract investors. Just as Manila is in direct competition with Makati, Taguig and Alabang, PEZA is in direct competition with its Thai, Malaysian and Indonesian equivalents.

In PEZA's early years, it had to hurdle certain barriers to make a compelling case for itself. Such barriers included the country's expensive power cost, insufficient infrastructure, and the restrictive provisions of the constitution. Similarly, Manila must hurdle its own barriers-its lack of space, poor infrastructure, and sketchy record of peace and order. Whatever PEZA's deficiencies are, it made up for with its efficient bureaucracy. The city of Manila can do the same.

Insiders attest that bureaucratic red tape (for processing of licenses, permits, tax clearances, etc.) is virtually non-existent inside PEZA zones. PEZA has established a system whereby all administrative services are done in one place and is accessible 24 hours a day, all year round. They call it ''one-stop-shop/non-stop shop service.'' So efficient is the system that processes normally requiring two working days to complete in Indonesia or Thailand can take no more than one hour inside a PEZA zone. The absence of red tape and the perpetual access to administrative services is PEZA's key competitive advantage over other industrial estates in the region. It has enabled it to get its fair share of investors.

Another secret to PEZA's success is the dynamism of its chairman, Lilia de Lima. De Lima is not only accessible to her investors 24/7, the brilliant chairman spends half of her time on sales missions here and abroad, speaking to various chambers of commerce and heads of state. She is a relentless salesman with an impressive performance record. Since 1995, PEZA zones attracted nearly $51 billion worth of new investments that generated more than $459 billion in export earnings.

The city of Manila needs its own investment czar, someone capable of relentlessly selling and someone with the financial and organizational wherewithal to structure investment deals with the city's many bureaucratic branches.


I recently spoke to an old friend, Chiqui Mabanta, a preservation advocate for Manila's heritage homes and buildings. Chiqui asserts that these structures are what makes Manila unique and what gives it its soul. I could not agree more.

This is why I am all for the appointment of Carlos Celdran as the city's new tourism consultant. Carlos is also an advocate for preservation and the arts. For years, he has lobbied for the revival of old Manila. Now is his chance to put money where his mouth is.

I believe that Manila should own ''bohemia''. The artistic colonies that once populated the Malate and Ermita areas should be wooed back as they provide its unique flavor. The products and services they provide are those that attract both local and foreign tourists. They offer what cannot be found in malls and other areas of the city.

By all means, Manila should reclaim its title as the owner of ''the tourist belt''. To do this, City Hall must again provide the basics-peace and order, a pedestrian-friendly environment, efficient city services, and business-friendly policies for its bohemian merchants. Of course, a new zoning code must also be put in place to separate commercial establishments from industrial concerns.

Notwithstanding the many interesting and historical structures that dot old Manila, the place could use a dose of beautification, something the city can't afford to subsidize. A look into the model of the city of Prague should provide inspiration and guidance. In just six years, the Czechs have turned this communist-torn city into a medieval theme park that looks good no matter what angle it is viewed from. Carlos should look into how they pulled it off.

Turning Manila around could be Erap's legacy. Doing well for Manila has the power to obliterate all his alleged transgressions and allow him to go down in history as the best Mayor this country has ever seen. He has already done well for San Juan, after all. His success will help the political future of his heirs, JV and Jinggoy Ejercito, in whatever political ambitions they may have. Conversely, his failure will eat away at their credibility. I wish Erap all the success.

Andrew is an economist, political analyst and businessman. He is a 20-year veteran in the hospitality and tourism industry. For comments and reactions, e-mail andrew_rs6@yahoo.com. Follow Andrew on Twitter @aj_masigan.

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