9.

Manila
Brian H Roberts

1 Introduction
Metro Manila i is a large polycentric mega-city with a population of more than 12 million people
growing at around 1.5 % per annum. By 2020, the metropolitan area population is expected to
reach 13.4 million (City Mayors 2009). It is located in the southwest of the island of Luzon on an
isthmus bounded by Manila Bay to the west, a large shallow lake — Laguna de Bay — to the
southeast and the Sierra Madre Range of hills and volcanos to the east and north east. It is divided
by the Pasig River. Most of the city lies on a wide flood plain, which is one of the largest in the
country.

With a land area of 636 km2, Metro manila is the second largest urban area, by population, in Asia,
after Jakarta (WWF 2009). But the metro area is much larger than the seventeen local governments
that make up the national capital region (NCR). The Metro Manila, in reality, also includes adjoining
urbanised areas in the surrounding provinces of Bulacan (north), Rizal (east) and Cavite and Laguna
(south). The population of this Greater Manila area is close to 18 million, making it the 7th largest
mega city in Asia (Laquian 2005).

Metro Manila is a fascinating city of diverse cultures, traditions and religions, as well as the national
centre of government, commerce, education and transportation in the Philippines. Like other large
Asian cities, it faces many development problems associated with congestion, pollution,
infrastructure shortages, weak governance and poverty. It is a vulnerable city that has been assailed
numerous times by severe tropical storms, floods, earthquakes and fires, as well as beset by
invasion, and economic, social and political crises. It is also a city that is becoming increasingly
exposed to the impacts and effects of globalisation, terrorism, economic shocks and climate change.

Despite Metro Manila’s vulnerability, it is still a dynamic, vibrant and resilient city. It has generally
recovered relatively quickly from past crises and destructive events. However, more often than not,
it has been local communities and businesses which have led the recovery efforts, because of the
slow response of the national and metropolitan governments. Although the experience of recovery
in most cases has been slow, resilience strategies have been learned by government, business and
the community as a result of the management of previous crises.

In this chapter the author examines the dimensions of risk and resilience related to crises or disaster
management and recovery in Metro Manila. Risk events and shocks which impact on cities can take
many forms: e.g. natural disasters; wars; accidents; political, economic, social, governance, legal and
environmental incidents; as well as technology failure (Roberts and Tabart 2005). The pathway to
recovery from these events can be driven by individuals, communities, business, and government ─
or combinations of these.

Few studies have been conducted which examine the dimensions of risk or resilience at a city or
regional level in the Philippines (Quisumbing, McNiven et al. 2008). What research has been

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undertaken on urban risk impact and management has tended to focus on natural and
environmental risks. However, Manila has a history of other risks besides these, and these other
risks have had a severe impact on its urban systems. In this chapter, the author seeks to adopt a
broader perspective of the scope of risk and resilience related to crises and disaster events which
have impacted on Metro Manila.

The chapter commences with a brief discussion of the concept of urban risk and resilience. This is
intended to provide a context for the framework of the investigation into the relationship between
risk and resilience in Metro Manila. The phenomenon of ‘urban resilience’ (Resilience Alliance
2007)is a relatively new concept and adds an interesting dimension to understanding how cities
manage disaster impact and recovery. A brief history of the planning and development of Manila
from its Spanish origins to the present day is also discussed. This historical discussion examines risk
prevention and adaptation measures that were adopted in the early Spanish period of the city’s
development.

The chapter then describes different types of risk events which have had an impact on Metro Manila
in the past and which pose a risk for the future. Some responses to risk mitigation and disaster
management recovery are examined.

Metro Manila is made up of seventeen local governments, some of which have shown strong
leadership in establishing risk management strategies, pathways for recovery, and resilience to
address crises. Four case studies ii are used to document the way government, business and
community sectors have responded and the resilience approaches which have been employed to
resolve different types of disasters or crises. Three local government areas in Metro Manila —
Quezon, Taguig and Marikina cities — are studied. The lessons identified by the case studies, have
relevance to improving risk management and resilience strategies in other Philippine and Asian
cities. The chapter concludes with the message that cities must improve urban risk management
and their approaches to the development of urban resilience strategies.

1.1 Concept of Urban Resilience

Urban systems, like natural systems, have a remarkable ability to recover and adapt to shocks,
disasters and other crisis events. It seems ironic that urban systems, like natural systems, often
need shocks to foster change, build immunities, and stimulate innovation, and foster creativity to
regenerate or move to a new stage of development. Shocks can be caused by a multitude of factors.
They can be sudden or latent, triggered by the realisation or eruption of a cumulative set of
seemingly unrelated minor events and factors which build up underlying stresses in social,
environmental and economic systems.

Shocks or crises do not necessarily have to be catastrophic events. After an initial impact they often
create opportunities for cities and committees to identify new pathways to revitalise. This often
leads to new discoveries, new orders and new ways of doing things. Shocks and disasters, for
example, can force governments to improve the management of urban systems, or they can
promote greater awareness of communities to manage risk and force them to undergo change.
Shocks and crises are essential to keep cities dynamic and citizens and organisations alert and
healthy.

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The phenomenon of recovery in damaged ecosystems has given rise to a new field of research on
resilience (Walker and Salt 2006). The fact that cities are systems which are able to reinvigorate
themselves and recover from disasters and crises has created the metaphor ― ‘urban resilience’.
Urban resilience adds a new dimension to resilience theory and is concerned with the degree to
which cities are able to tolerate shocks before reorganising themselves around a new set of
structures and processes (Alberti, Marzluff et al. 2003). The idea of urban resilience suggests the
positive ability of urban systems to adapt to the consequences of catastrophic events, failures, or
changed environmental situations. Urban resilience is a subject that has not been studied widely
until recently (Resilience Alliance 2007). It is an area of urban systems science that is likely to
become increasingly important as cities become more exposed to global shocks and other events
over which they will have little control.

Urban resilience evokes the idea of urban buoyancy leading to the managed recovery from risk or
event shocks that cause significant destruction to the wellbeing and livelihood of urban dwellers.
The origins of events which cause shocks to urban systems are not always local. The 2008 Global
Financial Crisis, for example, triggered a set of events, which began in the United States of America
through sub-prime lending in the housing mortgage and derivatives markets and then spread to
Europe and the rest of the world. Another example is unsustainable urban development practices
which are cumulatively contributing to global warming and environmental change. These global
influences, along with localised political, structural and cultural systems change, are making it more
difficult for cities to manage risks (UNISDR 2008).

1.2 Historical Perspective of Cities and Risk

The focus on urban risk management has changed significantly throughout the history of cities. The
earliest cities were established primarily for defence purposes to protect communities and property
from invaders or the threat of natural disasters (Mumford 1961; Hall 1998). Cities were destroyed
and rebuilt many times depending on the will of conquerors, or what remained after a catastrophic
or shock event. As the functions of cities evolved from defence havens into centres of government,
commerce and trade, new urban risks started to emerge. Powerful economic cities began to face
financial crises and bankruptcy ― this occurred many times especially in the renaissance cities of
Italy. Other cities experienced social and political revolutions and upheavals which transformed
their governance and social systems. Cities or towns were often redesigned to suppress social
uprisings. For example, Haussmann’s Plan for the Grand Boulevards in Paris was devised to confine
unruly mobs to the communes, and the Quaker movement built new temperance towns such as
Bournville in the United Kingdom to protect citizens from alcohol and other ‘evils’ in society.

Industrialisation of cities began in the 18th Century. This led to rapid urbanisation and a massive
transformation of cities and their economies. Industrial cities, started to specialise focusing on the
development of industries which provided them with some form of competitive advantage. In order
to maintain economic power and position, industrial cities also invested heavily in colonies to
produce and ensure protection of raw material supplies. Governments paid for militias, armies and
navies to defend colonies and supply chains to build the industrial wealth of cities. Industrial cities
grew in power and size, but many later fell into decline because of the transformation of empires,
depletion of natural resources, new technologies, changes to global trade, and a loss of
competitiveness factors. Structural changes which have occurred in the developed and former
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industrialised countries have led to chronic unemployment, and social and urban blight in some
regions. This has given rise to increases in social risk in urban societies (Beck 1992).

By the latter part of the 19th Century, the rapid growth of urbanisation resulted in governments
concentrating on managing risks associated with the inadequacy of land supply, infrastructure and
housing for the increasing numbers of people living in and migrating to cities. By late 20 century,
cities began facing increasing housing, traffic management and environmental problems which led to
a focus on sustainable urban development and a search for new management tools to deal with
development risks. This caused planners to shift from using traditional land-use master plans to
guide development, to adopting integrated strategic plans to manage urbanisation. This was more
accommodating of social and environmental concerns and risks. The change in the approach to
urban planning was a response to the need for city and local development plans to be more flexible
and receptive to change and risk events.

From the 1990s new concepts and ideas to make the development and management of cities more
sustainable were explored (Dowall and Clark 1996). Urban metabolism, industrial ecology,
ecological footprints, emissions trading and environmental banking are just some of the new tools
and concepts now being applied. Because risks faced by cities are becoming increasingly complex
and difficult to resolve, urban administrators need to focus on better ways to address disaster
prevention, management and recovery. Although great advances have been made in risk
management theory and management tools, relatively few tools have been developed to handle
multi-sector and cumulative risk impacts of disaster or shock events on cities (Roberts 2003). Multi-
sector risk analysis was developed to monitor and evaluate anticipated and acceptable levels of risk
in the city of Canberra, Australia (Roberts and Tabart 2005). The responses to risk management and
resilience must be multi-sectoral (Roberts and Cohen 2002), since cities are systems with complex
and multi-dimensional dynamics.

1.2.1 Multi-Sector and Cumulative Causation Dimensions of Urban Risk

Understanding which factors enable cities to respond better to recover from shocks and disasters is
important if urban risk management is to be improved. The United Nations International Strategy
for Disaster Reduction Regional Task Force on Urban Resilience and Disaster Vulnerability in the
Asia-Pacific Region notes that resilient cities have two specific area of focus for risk management of
urban systems. First, is the concept that sustainable cities must focus on a balanced approach to
urban ecosystems: there should be greater equilibrium of natural and built environments. Second,
urban resilience should reflect the dynamic changes of risk. Risks vary in likelihood, magnitude and
duration over time. It is important, therefore, that urban resilience strategies should evolve to
reduce the impacts of disasters and other significant risk events that bring about negative changes to
urban systems.

An important dimension of urban risk management is that disasters and other shock events can
trigger what is known as cumulative causation impacts (Myrdal 1957). A single event can generate a
chain reaction of events which can have physical, economic and social impacts that extend across a
city, region or even several countries. Terrorism has emerged as a new dimension for urban risk
management and resilience. September 11, 2001, triggered a global panic in financial markets which
caused a fundamental change in thinking and practices to make cities and transport systems more
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secure. On a different note, the 2003 SARS outbreak in Asia had a devastating and long-lasting
impact on urban economies and transport systems in the Asian region. It is no longer ‘known’
threats that have the potential to create chaos in urban systems. It is the unknown and latent
dimensions of risks that are posing the greatest threat to cities, especially in Asia.

Urban risk and resilience is an important new dimension in the planning, management and
development of cities worldwide. In the past, cities were capable of applying measures to safeguard
themselves against siege, disease and natural disasters. They are less able to protect themselves
against current and emerging global economic, social, climate change, terrorism and other shock
factors. Even local disasters and shock events can now have international consequences − the so-
called ‘butterfly effect’ of chaos theory. Local disastrous events can bring about massive changes to
the management of urban and transport systems, as September 11 demonstrated.

Cities are no longer fortresses and are likely to become more vulnerable to external economic,
environmental and social shocks in the future. Governments and communities will need to become
extra vigilant and engage in smart ways to anticipate and manage both known and unknown risks
(Roberts 2006). The latter are almost impossible to prepare for, but systems for resilience
management still need to be created to deal with the possibility of unknown shock events. This calls
for fresh thinking, ideas and strategies to support urban risk management and resilience – especially
in cities like Metro Manila.

1.2.2 Framework for Risk and Resilience Assessment

Assessing risk and resilience in cities is tricky as there are no established methodologies for analysis
of these factors. By definition, risks have many uncertain dimensions in terms of their nature, scale,
time and impact. Much of the analysis conducted on risk and resilience is qualitative, which makes it
difficult to compare the risk exposure of cities. In order to conduct a more systematic and multi-
sector assessment of risk and resilience for researching this chapter on Metro Manila, it was
necessary to develop an analytical framework to collect data and conduct the analysis. The
following framework (see Table 1) was devised.

Table 1 Risk and Resilience Analysis Framework for Metro Manila

Risk and Resilience Analysis for Metro Manila

Environmental
Development
Planning and

Urban Assets

Political and
Economic
Natural

Social

Legal

Metro Risk Analysis

Metro Mitigation and Resilience Initiatives
and Strategies
City Case Studies of Risk and Resilience
Lessons Gained

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At the first level an analysis is conducted of seven dimensions (or types) of risk which affect or have
impacted on Metro Manila, and the mitigation and resilience responses to these. The second level
of analysis uses the same framework, but focuses on the way three local governments in Metro
Manila have developed resilience responses to a selected number of risks, using four case studies of
disaster or crisis events. The circumstances leading up to the crisis and responses are described. The
causes of some of these crises events at the local government and metro level were triggered by
events outside the Philippines, and business, governments and the local communities concerned
were caught unprepared and were slow to respond. The case studies provide an interesting insight
into initiatives and responses by these three stakeholders to recover from crises; rebuild and
enhance the city’s performance and competiveness; improve local quality of life; and introduce good
environmental management and governance practices. The final part of the analytical framework
draws together the lessons gained from the Metro Manila and local government levels of analysis, to
see if there are pathways governments and communities can create to reduce exposure to urban
risks and foster more dynamic approaches to resilience.

2 Planning and Development of Metro Manila

2.1 History of the Development and Planning of Manila
Manila began as a well-planned fortress city. In 1570, the Spanish occupied the Philippines and
developed a citadel in the old Manila city port area as the principal centre for administration and
trade in the East Indies. The city gradually developed beyond the citadel walls as trade with Europe
developed. The first detailed plan for Manila was prepared in 1831, followed by a series of plans in
1842, 1851 (see Figure 2), a Grande Plan in 1863 and a district plan in 1884. Each plan was prepared
to guide the progressive expansion of the city, linking the city to neighbouring market towns which
have now been absorbed into the current Metro area.

Figure 1 A sketch plan of Manila (original caption: Plano de Manila), 1851.

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In 1889, the country was taken over by the United States of America following the defeat of Spain in
the Spanish-American Civil War. Little urban planning took place in Manila however until 1905 when
a detailed plan for the city was prepared. This plan bore many of the hallmarks of L’Enfant’s 1791
plan for the City of Washington. However, it was never implemented, but many elements of the
design were later incorporated into the plan for Quezon City, which was to be planned after
Independence in 1946 as the National Capital City. After the American colonial period ended in
1946, many of the land management, administration, planning practices and regulations in place
today continued to follow US systems.

During the post-World War II period until the end of Marcos Government in 1986, Manila expanded
rapidly as the result of high rates of migration from all parts of the country. This migration
contributed significantly to the growth of the national capital, but the urban development that
occurred was largely unplanned and unregulated. The city began to sprawl into the surrounding
municipalities giving rise to significant traffic and environmental problems. While the national
government established various organisations and coordinating councils to guide urban growth and
manage urbanisation problems, by 1972, it realised it had a serious problem. As a result the first
Interagency Committee on Metro Manila was established. The aim of this Committee was ‘to (i)
study the system of municipal/city government in Metropolitan Manila, (ii) recommend whatever
measures of coordination and integration were deemed appropriate, (iii) to study the functions and
responsibilities of the National Government in the metropolitan area, and (iv) to recommend
whatever changes in structure and interrelation with municipal governments were deemed
appropriate’(Manasan and Mercado 1999:12). This led the Committee to recommend the
establishment of the Metro Manila Commission (MMC) in 1975.

The MMC was primarily responsible for ensuring sanitary waste collection and disposal, transport
and traffic, and fire management services. It was to coordinate public and private sector delivery of
essential services including water, sewerage, flood control, social welfare, housing and recreation
facilities, but unfortunately it was given few resources to do so. It was also charged with developing
a comprehensive regional plan to guide the social, economic and physical development of Metro
Manila. A master plan for the NCR (incorporating the 17 cities of Metro Manila) was developed in
1977 but it was not effectively implemented. There were improvements reported under the MMC
in the coordination of squatter settlement development, waste management and transport
(Manasan and Mercado 1999:14); however, the MMC lacked the power and authority to overrule
the self interest of local governments and private sector service providers. Many local governments
began developing their own Master Plans, ignoring the provisions of the overall Master Plan.

The collapse of the Marcos Administration in 1986 and the introduction of a new constitution left
the institutional arrangements of the management Metro Manila in disarray. The Acquino
Administration established the Metro Manila Authority (MMA) in an effort to restore business
confidence and to manage the urban growth and development of Metro Manila. However, the
MMA lacked funds and political authority. Local governments recognised the weakness of the MMA
and began to take charge of their own affairs, fostering independently the development of new sub-
regional city business districts, shopping and industrial centres. This was the beginning of Metro
Manila developing as a polycentric city, with each city actively competing with each other for major
development projects.
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The ensuing pattern of development caused further traffic congestion which added to the already
severe pollution problem. Moreover, serious shortages of electricity, inadequate water supply and
deterioration of sanitation services plagued the city (discussed later). At various times the city’s
urban systems collapsed and Metro Manila developed a reputation as one of the worst cities for
electricity brown-outs in Asia. Political pressure mounted on the need for a strong central
coordinating agency to manage the development of Metro Manila. This resulted in the
establishment of the Metropolitan Manila Development Authority (MMDA) in 1995. The Authority
was given strong powers and responsibilities to administer the development of the 17 cities that
make up the Metro Manila Capital Region (see Figure 3). The legislation which established the
MMDA required the Authority to work closely with non-government organisations (NGOs), peoples’
organisations (POs) and the private sector to cultivate partnerships for development. To this end
the MMDA board comprises members reflecting the interests of these three groups.

Figure 2 Cities of Metro Manila Figure 3 Physical Framework Plan for

Metropolitan Manila, 1996-2016
Source: MMDA(MMDA 1996)

The main functions of the MMDA are planning, monitoring, coordination, and supervisory authority
over the delivery of metro-wide services within Metro Manila. The functions are to be exercised
without diminution of the autonomy of the local government units concerning local matters (MMDA
2009). MMDA’s primary responsibilities for infrastructure and community services are:

• development planning
• transport and traffic management
• solid waste disposal and management
• flood control and sewerage management
• urban renewal, zoning and land-use planning, and shelter services
• health and sanitation, urban protection and pollution control
• public safety.

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An important decision of the Authority after it was established was the preparation of ‘The Physical
Framework Plan for Metropolitan Manila, 1996–2016’ (Figure 3). The plan was to be reviewed every
ten years; however to date no review has occurred. An attempt was made to prepare a new
medium-term development plan for 2001-2004, but this plan was never produced. The failure to
prepare and review the development plan by successive agencies has been a factor adding to the
uncertainty of the planning, development and management of Metro Manila for over half a century.

The failure of planning and the unwillingness of national, metropolitan and local governments
responsible for implement of plans or enforcement of regulations has led to an urban development
pattern which is not sustainable and increased the risk profile of the city. It has created great
uncertainty in the development industry, in service delivery, in the accountability of decision-making
processes, in land markets and in security of tenure.

The legacy of more than 50 years of failed metropolitan planning will continue to lead to disjointed
patterns of urban settlement and development as the city grows. This in turn will reduce
opportunities for efficiency gains in promoting greater consolidation, urban logistics and
infrastructure systems, employment clustering and provision of community services. As a
consequence, the cost of retrofitting and re-engineering Metro Manila to reduce the exposure the
city faces to risks will run into billions of dollars. These risks could have been substantially reduced
had the governments of Metro Manila agreed to work collaboratively and cooperatively in the past.
Manila is no different to many other large Asian cities where poor planning and governance has
greatly increased the risks that the city and its citizens face in the future.

2.2 Uncertainty of the Urban Development

The lassez-faire and sporadic nature of urban development and investment in Metro Manila has
given rise to significant differentiation in the pattern of land use, with some cities becoming more
specialised. Makati is the wealthiest city in Metro Manila and the main centre for business services,
accommodation and diplomatic activities. Ortigas, at the junction of Pasig and Manluyong cities is a
major financial, retail and information services centre. Old Manila is a tourist, political and cultural
centre; and Quezon City is the educational centre and home for many national government offices.
All the cities of Manila have sought to develop strong commercial centres, in combination with high-
rise residential apartments. However, the prohibitive cost of land and uncertainty over tenure and
development approvals has meant that developers tend to favour locations where there are large
tracts of land that are unencumbered by land tenure issues. Some of these are former military or
government sites.

The pattern of urban development which has occurred in Metro Manila, as a result of the high level
of competitiveness and the ineffectual planning by the MMDA, is a polycentric mega city, linked by a
relatively poor transport system. The lack of integrated land-use and transportation planning has
resulted in urban development that has completely overstretched the existing infrastructure and
transport system, resulting in Manila becoming one of the most congested cities in Asia. This adds
to the transaction costs of business and undermines the city’s competitiveness in trying to attract
investment.

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The uncertainty over land ownership and tenure caused by poor land administration and
management is a major factor shaping the economic, employment and poverty patterns of Metro
Manila. The wealthy live in secure communities around the new city centres, close to large mega
mall shopping complexes. The middle income sector is spread through an inner ring of smaller
residential estates and in large urban fringe residential estates. The city’s four million urban poor are
confined to older inner city housing, squatter settlements on public land, and along flood-prone and
land-slip areas. The effect is that many in Manila have little choice but to commute long distances to
work.

To address some of these urban development problems and associated environmental risks, the
MMDA has supported the decentralisation of industries from the older inner city areas to the outer
urban fringe. The Medium-Term Philippine Development Plan 2001–2004 also encourages the
location of new industries and large educational facilities to be sited more than 50 kilometres away
from Metro Manila (Kundu 2006:41). A Special Economic Enterprise Development Zone has been
created at the old US defence bases at Clark and Subic Bay. To the south there are several new
industrial areas in Taguig and Cavite. The attempt by the MMDA to try and segregate commercial
and industrial centres has only compounded the city’s transportation problems because of the lack
of fast and efficient transport systems operating to these major new employment centres.

The history of urban development in Metro Manila has been one of lost opportunities and
uncertainty. Political vacillation, lack of commitment to plan making and implementation,
inadequate reviews, and poor regulation enforcement have created conflicts of interest and rent
seeking opportunities that have resulted in the development of a mega city which is exposed to high
levels of social, economic and environmental risk. While government has attempted to improve the
coordination, management and delivery of basic services in Metro Manila, the failure to fund the
MMDA and its predecessors adequately has made it extremely difficult for the Authority to ensure
the efficient delivery of basic services across the whole metro area. It is unfortunate that Metro
Manila has become a city of fiefdoms, each seeking to secure whatever it can extract from central
government or the business sector, rather than working collaboratively to leverage and secure
resources to enable it to overcome many common development problems.

3 Risk & Resilience Analysis of Metro Manila

Metro Manila is a city with a long history of disasters, crises, setbacks and instability. A study
ranking the vulnerability of major coastal cities in Asia to climate change issues, for example, ranked
Metro Manila second equal to Jakarta and just below Dhaka, as one of the most ‘at risk’ cities in Asia
(WWF 2009). By far the most significant risks to Metro Manila have been events associated with
natural disasters; but governance, planning, unmanaged development, and economic, social and
pollution issues have made Manila a highly vulnerable and risky city in which to live and do business.
The following describes briefly the history of the planning and development of Metro Manila. Many
of the problems and seriousness of risks that face Metro Manila today are the product of its urban
geography and the failure of past planning measures. This then leads into an analysis and discussion
of the major risks which have impacted, and will continue to impact on the city and some of the
approaches taken to address these.

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3.1 Natural Risks

3.1.1 Typhoons and Floods

On average the Philippines is hit by more than 20 typhoons a year (IFRCRCS 2009), many of which
cause severe damage and loss of life. On 30 September 2009 Typhoon Ondoy caused the most
destructive floods in living memory. More than 2.5 million people were directly affected by the
disaster. A second major typhoon (Parma) hit a week later. These two typhoons left more than 600
people dead and damage to infrastructure, buildings and agriculture estimated at PhP30 billion
($US550m). Much of the destruction and loss of life occurred in the Marikina Valley and other low-
lying areas of Metro Manila.

While wind associated with typhoons causes much destruction, it is the associated flooding which
causes the greatest damage to infrastructure and structures in Manila. The average elevation of
Metro Manila’s urban area is 10 metres, but in excess of 1.5 million people live in low-lying areas
less than one metre above sea level. Flooding in the low-lying areas is becoming increasingly severe
as catchment areas become more urbanised, vegetation loss increases and the dumping of solid
waste into streams and drainage systems continues. One study (Tharoor 2009) ranked Metro Manila
as one of the most vulnerable cities to flooding in Southeast Asia.

No public agency appears to have responsibility for reducing and managing the risks of typhoons and
flooding in Metro Manila. While there are many examples of authorities taking action to develop
drainage systems and canals to reduce the impacts of flooding during the early development of
Manila under Spanish rule, progress, since Independence, on addressing flood impacts has been
slow or totally lacking. The proposal to build the Parañaque Spillway in the 1970s to allow
floodwater to flow from Lake Laguna de Bay directly to Manila Bay instead of passing along the
clogged Pasig River could have saved billions of pesos in subsequent property damage and lives.
Lack of attention to flood management and protection works in the Marikina Valley in the 1970s also
contributed to many deaths from the Typhoon Ondoy. With improved flood mitigation
management, the risks of disasters caused by typhoons and flooding, and the pain of recovery, could
be avoided in the future.

3.1.2 Earthquake Risk

Parts of Metro Manila are built across two major fault lines (Simpson, Cummins et al. 2008). Over
the past century the Manila region has experienced six severe earthquakes which have caused
significant damage to infrastructure and chaos to urban systems (Nelson, Personius et al. 2000). In
1990, for example, when a small earthquake caused cracks to a small section of the rail
infrastructure, stopping it from operating (ICE 1995:63). The effect was to reduce the overall
capacity of the metro system, overloading an already congested road network.

Metro Manila has many high-rise buildings which are vulnerable to earthquakes. Poor enforcement
of building standards and regulations, and sub-standard construction makes Metro Manila one of
the highest earthquake risk cities in Asia (Simpson, Cummins et al. 2008). The Metro Manila
Earthquake Impact Reduction Study (MMEIRS) (PHIVOLCS 2004) suggested that 5,000 buildings can
be expected to be destroyed by a severe earthquake along the Manila Trench. This would rise to
16,000 for a severe earthquake along the Manila Bay fault. Authorities have conceded that they are
11
not in a position to handle a large earthquake (Stanta-Cruz-Makilan 2004). The MMEIRS study
(PHIVOLCS 2004:5-52) states clearly that:

“Community members will not be assisted by public service immediately, in case of large
disasters, such as a major earthquake. Therefore, it is important to maximize the
preparedness and disaster response capacity of the community beforehand, through
enhancement of social capital by preparing the community and its members for resilient
responses. Top priority activities for community preparations are the identification of
evacuation route and place, rescue activities, and initial fire extinguishing. In order to
establish disaster management mechanisms through enhancement of social capital, the
following frameworks support the objectives or (i) enhancing self reliant and mutual help risk
management capacity (ii) inculcating disaster culture in future generations.”

The idea of the Metro Manila governments using resilience as a strategy for disaster recovery and
learning is innovative. It reflects public agencies’ knowledge that they have very limited capacity to
deal with a major earthquake disaster. MMEIRS outlines strategies for local governments to deal
with an earthquake disaster, but lack of training and community education, the paucity of
equipment, no city-wide mechanism for coordination and devolution of responsibilities, and the lack
of emergency powers entrusted to local wards or barangays are likely to result in a chaotic situation.
Self reliance and autonomous local community efforts are likely to be the main options for dealing
with a major earthquake in the metropolitan regions.

3.1.3 Tsunamis and Storm Surges

Metro Manila is located in an active seismic zone known to trigger tsunamis. There are historical
records of waves generated by tsunamis hitting the foreshore at Manila Bay; however, the
configuration of Bay has a damping effect on the height of tsunami waves. Storm surges resulting
from typhoons pose a much greater threat to coastal communities than tsunamis. The storm surge
during typhoons Milenya in 2006 and Ondoy in 2009 raised the sea level of Manila Bay by 2.5 metres
impacting on more than 1.2 million people living along the low-lying foreshore areas (OCD 2009).
Apart from causing serious risk to life and property, storm surges have a severe impact on local
water supplies and sanitation. Communities along Manila Bay are particularly susceptible to
outbreaks of waterborne diseases because houses are built over water and are difficult to access.
Most have no sanitation services. The lack of basic services and control over foreshore development
means these areas will become increasingly vulnerable to environmental and health risk problems in
future as sea levels rise.

3.2 Urban Services Risk Management

The following discussion addresses problems, dilemmas and approaches adopted by successive
governments to manage ongoing utility crises affecting urban services in Metro Manila. Metro
Manila is a city facing chronic urban management problems. It has experienced numerous failures
to its traffic, energy and water supply systems. The city has tried to manage these recurring utility
crises through improvements to governance of utilities, including privatisation of water and
electricity utilities and, while a few measures have proved effective, others have only reduced the
short-term risks. The approach taken by public authorities to manage crises in the city’s urban

12
utilities provide important lessons for those responsible for urban management and planning in
Metro Manila, as well as other cities in the Philippines.

3.2.1 Traffic and Transportation Management

Metro Manila is renowned for its traffic congestion and pollution problems, yet it has one of the
most efficient privately run local public transport systems in Asia. Philippine cities are famous for
their Jeepneys (Extended army jeep with a canopy cover used for public transport). These are a
popular, cheap and efficient means of localised public transport. It has been the failure of authorities
to develop and manage an orderly hierarchical and integrated road and public transportation system
to service the whole city that has caused Metro Manila’s current chronic traffic, transportation and
air pollution problems. This situation puts at risk the competitiveness of the economy and the
health of its citizens.

Traffic problems in Metro Manila, are not just caused by poor planning, lack of capacity of the
network and inadequate management of transport infrastructure and services — poor driver skills
and Manila residents love affair of owning large motor vehicles compound the city’s transport
problems. When government introduced measures for odd and even day number plates to reduce
traffic, the wealthier simply bought a second vehicle. The failure of government to invest heavily in
public mass transport and to address driver behaviour has resulted in a series of rolling transport
crises hitting the city since the 1970s.

It was in the mid 1970s that Metro Manila experienced its first serious traffic crisis —the city began
suffering high levels of congestion and occasional gridlock. The national government’s, response was
to set up a light rail transit system. A ‘Monorail’ Plan and the Light Rail Transit Authority (LRTA) were
established in 1980. The Plan consisted of a 150 kilometre network of rapid transit rail lines
spanning all major corridors of the city to be constructed within 20 years. Construction began on the
Light Rail Transit (LRT 1) line in 1981 and was completed in 1984. The Metro Rapid Transit System
(MRTS) running along EDSA (Epifanio de los Santos Avenue —the city’s main inner arterial road)
started in 1997 and became fully operational in 2004.

Thirty years on, however, the metropolitan rail transport system is less than 40% complete. The
major cross city link (LRT 2) has not started, and the linking of the northern extensions of the LRT1
and MRT3 lines to create a circle line has not begun. The interchanges between the metro rail and
bus networks are along the arterial routes poorly planned and make it difficult for passengers to
transfer from one line/transport system to another. There is not a city-wide inter-modal transfer
network of stations that allow quick and easy transfers between bus, air and other rail metro
transport services. Key transport hubs like the domestic and international airports are not linked
into the network. Privatisation of the management of the rail networks has not solved the logistics
problems that would achieve an efficient inter-modality of passenger movement system at transport
hubs. In short, as a result of poor planning and management, there is currently no effective
integration of public transport systems in Metro Manila.

The failure to improve traffic management and decrease congestion continues to undermine the
competitiveness and logistical efficiency of the city. Manila has become a city that is choking on its
traffic because its transport arterial systems have failed. Pollution levels are among the highest in

13
Asia and are having a grave impact on public health (see later discussion on environmental issues).
Congestion and health costs add billions of pesos to costs of production and productivity losses.
Governments seem incapable and unwilling to take action to confront the problems — or to invest in
solutions.

The city’s transportation network is thus becoming increasingly stressed, and the paucity of
construction and maintenance of key bridge infrastructure has put the system at high risk of failure.
There are cumulative causation risks to many sectors of the city that will emerge as the result of the
failure to adequately address the city’s transport problems. These will affect public health, safety
and security and the future economic development and competitiveness of the city. The capacity of
the city to respond to a major failure in its transportation network is weak, and the recovery process
will be slow. In a city divided by a large river, the consequences of one of the city’s five major bridge
crossings failing would be catastrophic and far reaching impacts on the city’s logistics system would
result.

3.2.2 Power Sector Crisis iii

Until 1972, virtually all power facilities in the Philippines were developed by private interests. In
effect most load centres in Luzon, as well as the larger cities in the Visayas and Mindanao, were
served by vertically integrated investor-owned businesses that supplied limited areas. At the time
the only significant government interest in the power sector was the NPC (National Power
Corporation) which had responsibility for developing the country’s hydroelectric facilities. Shortly
after the imposition of Martial Law in 1972, however, the government enunciated a new policy
which concentrated all generation and transmission facilities under the state-owned NPC.

As a by-product of that policy, government believed it could implement social pricing policies that
kept electricity prices low for residential and other small consumers who were expensive to supply.
The result was chronic under-investment in power generation as revenues could not cover
investment costs and the national budget did not have the capacity to make up the difference
through transfers. Metro Manila ground to a halt as brown-outs stopped business and production
systems caused chaos to city transport systems and disrupted many other services. The city faced a
crisis with companies transferring manufacturing away from the Philippines to countries where
electricity was much more reliable and cheaper.

As the power crisis deepened private development was viewed as the only viable solution for quickly
addressing the shortages. In 1987, the government ended the NPC’s monopoly on generation
facilities and committed to developing a plan for privatising the power sector. It developed the legal
framework, starting with the Build Operate and Transfer (BOT) law of 1991, to enable private,
including foreign, interests to own and operate generating facilities. These measures resulted in
generation investments, some 56 projects, which progressively moderated shortages. However, on
account of the rushed public private partnership program implemented at a time when the
government was in a very poor bargaining position, the cost of electricity in the Philippines is now
amongst the highest in Asia. So while the risk of supply shortages in Metro Manila has greatly
reduced shortages, the cost of electricity through poor contract management has increased the
city’s economic exposure by undermining its economic competitiveness. The city will only overcome
this through increased competition in the electricity market.
14
3.2.3 Water Supply
Manila is a city that faces the prospects of one of the most devastating events that could hit any city
— the total loss of its water supply system and storage capacity. Several times in the early 1990s,
the city almost ran out of water when the Angat Dam reached dangerously low levels. Chronic
supply and theft problems meant only a few areas of the city had access to continuous water supply.
Factories were forced to cut production and high-rise buildings had to bring in water not only
because of supply problems but also due to low water pressure. Health problems emerged in poor
areas of the city as people began using contaminated water for drinking and ablution purposes. The
then water supply management authority, Metropolitan Waterworks and Sewerage System (MWSS)
was found to be corrupt, highly inefficient and in debt to the tune of US$800 million(Esguerra 2003).

By mid 1995, the city was fast running out of water. As an emergency measure to alleviate the
supply problem, the government constructed the 13 kilometre Umiray-Angat tunnel to divert water
from the Umiray River to Angat Dam. However, as water demand was expected to increase by more
than 40% during the decade the government had little choice but to also privatise the city’s water
supply distribution and introduce other measures to reduce water consumption. The US$7.5 billion
required to finance new infrastructure and fund repairs to the existing system was beyond the
capacity of the government to raise locally or through an international development bank loan.

In January 1997, two companies — the Maynilad Water Services (MWSI) and the Manila Water
Company (MWCI) — were awarded concessions for the west and east zones of Metro Manila. The
two concessionary companies took over responsibility for managing and rehabilitating facilities to
provide water and wastewater services to residents in exchange for revenues from user fees
(Mayong 2006). They were given a tax-free break for seven years to help reduce investment risk,
and to maintain a relatively stable price for water to consumers. The privatisation led to an
immediate fall in water tariffs: 43.5% in the west zone and 73.6% in the east zone. The catastrophe
appeared to have been averted as both companies began to expand the water supply and
maintenance.

Unfortunately, in June 1997, the Asian Financial Crisis (AFC) struck. Both consortiums had borrowed
heavily off-shore and were exposed to foreign exchange risk. Unable to meet debt obligations,
within months the companies introduced a significant tariff hike. The cost of water to consumers
began to rise — especially impacting on the poor. The two concessionaires continued to manage
their financial risks by passing on the costs to consumers.

Then in December 2004, the main supply tunnel servicing the Angat Dam — which supplies 97% of
Metro Manila’s potable water— collapsed. The collapse was caused after illegally sawn logs washed
down the catchment as the result of flooding, blocking and damaging the tunnel structure. The
damage caused to the tunnel threatened to deprive the city of water within four months. Because
the dam is also located on an earthquake fault and has leakage problems, the potential for its
breakdown is very high.

In 2005, Manila Water was unable to meet its commitments on concessionary payments to
government. Services could not be expanded, and this left many areas without water. Further

15
concessions were granted to Manila Water in 2006, but to date the supply situation has not
improved.

A number of lessons can be learned from Manila’s water crises. The most important is the need for
governments to ensure that urban water supplies are not reliant on one source. The Angat Dam is
Manila’s main water supply. If the dam fails, chaos would occur and it would take months for the city
to develop alternative sources of water to meet demand. Second, while privatisation did provide a
short-term solution to the city water supply problems, if it is not managed well, it can come at a cost
to consumers. Where privatisation involves a high level of foreign debt exposure for the companies
concerned, the risk of price rises to consumers will be high, specifically if there is volatility in the
exchange rate. Metro Manila now has one of the highest water costs in Asia, which was not what
the government intended when it moved to privatisation. Finally, the failure to address complex
issues such as acquiring alternative reservoir sites; securing and protecting corridors for utility
services; and allowing the two concessionaries to pass on financial costs associated with exchange
rate risk to consumers has not resulted in efficiency gains or reduced tariffs for water in Manila.

Water risk management in Metro Manila is likely to get worse in future if predictions on the impact
of climate change on water supply systems in the Philippines become a reality (WWF 2009).
Alternative strategies for water management and supply are necessary to reduce the city’s current
high level of risk exposure for maintaining safe and reliable water for its residents in the future.

3.3 Economic Shocks

Manila is the main financial, commercial, transport, government and industrial centre of the
Philippines. It is the principle centre in the country for the manufacture of chemicals, steel, textiles,
clothing and electronic goods. It is also the wealthiest city in the country, generating an estimated
21.6% of supply-side national GDP (2008). One study (WWF 2009) indicates 32% of the nation’s GDP
(US$124 billion purchasing power parity (PPP) in 2007) was produced by the Greater Metro Manila
Area. The city, due to its size, creates its own markets, but because of its polycentric structure and
poor mass transit system it also generates diseconomies in the transaction costs of urban transport,
infrastructure and logistics.

About 65% of Metro Manila’s GDP is generated by the service sector. Retailing dominates the
economy, with Manila having some of the largest shopping malls in Asia. The expanded SM City
North Mall on EDSA comprises 425,000m2 of shops, food courts and supermarkets, and is reputed to
be the third largest mall in the world. Metro Manila acts as a super retail and supply centre for
much of the Province of Luzon. It is also a major tourist destination, attracting over one million
foreign visitors per year. It is projected that at the current growth rate, Manila’s tourism volume will
surpass Singapore by 2020 (WWF 2009).

The economic performance of Metro Manila, and that of the Philippines, has tended to lag behind
other large Asian cities. The Philippines economy is different from other Southeast Asian countries
of comparable population size in that it has a higher service industry component in its national GDP
and the level of remittances plays a very prominent role in the economy. This has had an effect on
the patterns of investment, development and capital flows which sometimes act in a counter-cyclical
manner to regional and global economic trends. Somehow, the Philippines, being less export

16
dependent has generally been able to respond better to economic crises than other Asian countries
― especially in the case of the Asian Financial Crisis and the Global Financial Crisis. Some reasons
why the Manila economy seems to be more resilient to economic shocks are elaborated upon
below.

3.3.1 Asian Financial and Global Financial Crises

The 1997 Asian Financial Crisis had a major impact on Asian cities, especially Bangkok, Hong Kong
and Kuala Lumpur. Property markets were affected most, as many construction projects were
funded through foreign debt. The rapid depreciation of exchange rates left local and joint venture
residential and industrial development projects with crippling debt, forcing many into receivership.
Metro Manila was less affected by the crisis, as external borrowings to fund property development
were at much lower levels than other Asian countries, and funds were often secured through the
Philippine diaspora, rather than the formal banking system. The effect of the crisis was that many
projects halted but Philippine companies and family businesses absorbed accumulated debt in the
expectation that the economy would recover quickly, which it did.

In the Philippines, the development industry is dominated by a small number of powerful family
companies which have secured much of their capital requirements from private sources. The
Philippines also has one of the highest per capita rates of remittances in the world. In 2009 more
than nine million overseas workers remitted an estimated US$19.688 billion (World Bank 2010). A
high proportion of remittances are used to supplement family incomes and outlays on housing.
Remittances helped greatly to reduce the impacts of the Asian Financial Crisis and the Global
Financial Crisis, and provided a means of private social welfare for low income earners. The pattern
of remittances to the Philippines tends to be counter-cyclical to global trends, with higher
remittances occurring in times of financial shock. This is partly due to migrant workers returning
home with savings —as occurred in the 1997 and 2008 financial crises.

While the Philippines has been able to buffer the effects of economic shocks somewhat better than
other Asian nations, ironically in the recovery phase, the opposite occurs. Significant capital outflows
have led to a series of budget crises, especially in 2006. The country, and especially Metro Manila,
have been deprived of capital for investment in projects that would have helped develop the
domestic and export economies. This phenomenon has been a significant factor in the slow rate of
economic growth which has occurred in Manila compared to other Asian cities.

3.3.2 Patterns of Resilience and Economic Recovery

The resilience patterns that occur from typhoons which have hit Manila have had a flow-on impact
to consumption patterns in the economy for several years. Remittances play a key role in this aspect
of disaster recovery in the Philippines. There is a consumption ‘rebalancing’ by households affected
by floods and other catastrophes which leads to the prioritisation and deployment of savings and
future income flows to repair residences and vehicles, and buy basic appliances, furniture and
fixtures etc to replace those damaged by floods (Admin 2009). An increase in short-term informal
loans to family and the community to aid recovery occurs, and this tends to result in a reduction in
non-construction related business activity. For example, expenditures on non-essential food and
consumption of tobacco, beverages and wearing apparel are delayed until such times as private debt
or loans to assist recovery are paid back. The rebalancing and prioritising of expenditure results in
17
postponed consumption of non-essential items, but only has a minor effect on expenditures of basic
consumption items.

Amongst the urban poor, there is a remarkable level of cooperation and trust in sharing resources
and labour to support individuals during economic shocks, and in their reconstruction efforts. This
indicates the important role that social capital plays as a resilience strategy in rebuilding affected
communities. Middle income groups, on the other hand, have tended to rely more on insurance,
banking and government support to recover from economic and natural disasters. These formal
systems are often slow, with families usually drawing on their own savings and borrowing from
extended families overseas to rebuild or manage their way through a financial crisis. Recovery in the
middle class tends to be more business driven than community driven. This however has benefits
for low income workers and small businesses who are involved in the necessary reconstruction
work.

3.4 Environmental Risks

3.4.1 Air Pollution

Metro Manila has one of the highest levels of air pollution in Asia (Haq, Schwela et al. 2006). An
Asian Development Bank (ADB) report (ADB 1998) showed that air pollution in Metro Manila had
reached critical proportions in the mid 1990s and that immediate action was required to address the
problem (ADB 1998). The World Bank estimates that 6,000 tonnes of particulates, chemicals and
other pollutants are emitted daily by Metro Manila’s three million vehicles, factories and households
(World Bank 2005). In 2001 the annual average particulate emission for Metro Manila was three
times the World Health Organisation’s (WHO) recommended minimum standards. Air pollution
contributes to an estimated 1,900 deaths per annum in Metro Manila, with 8,400 seriously affected
by respiratory problems. This cost to the Metro Manila economy in 2001, was estimated at $US392
million (World Bank 2005).

In 1999 in an attempt to address Manila’s serious air pollution problem, the government rushed
through the Clean Air Act. However, this has done little to reduce the problem, largely because the
regulatory authorities have not had the capacity to implement emission standards and have been
unwilling to impose penalties on violators. The failure to address Manila’s growing air pollution
problem has not only increased risks to public health, but resulted in the acidification of water
supply systems.

Acid rain is resulting in honey-combing occurring in concrete buildings, especially poorly constructed
buildings. This increases the chance of concrete panels and structures being dislodged during a
typhoon or earthquake. With the rapid rise in the number of high-rise apartment and office
buildings in the sub-city centres, the risk to public safety of falling material is mounting. These risks
remain unseen to the public, but are part of an underlying cumulative causation set of factors that
could one day lead to a catastrophic event resulting in building collapses in the city. Unfortunately,
little is being done to reduce the indirect effects of air pollution on the built environment and public
health. The problem is that the risks are not obvious. They only show up in public health statistics
and studies or when an accident occurs. Developing strategies for resilience to reduce the indirect

18
impacts of air pollution on the safety of building is difficult, as the primary vectors that cause the
problem are also part of the solution.

3.4.2 Air Pollution and Climate Change

The International Panel on Climate Change (IPCC) notes that Southeast Asia will experience an
‘increase in the frequency of intense precipitation events,’ and ‘extreme rainfall and winds
associated with tropical cyclones are likely to increase in Southeast Asia’ (IPCC 2007:879). Local air
pollution is a contributing factor to global climate change, which is expected to impact significantly
on Metro Manila. It is anticipated that the severity of typhoons and storm damage due to climate
change will also increase. The frequency and patterns of rainfall will influence the quality and
quantity of the city’s water supply. As noted earlier, it will also affect sea levels and flooding, and
the demand for energy ―especially air conditioning.

The MMDA has taken some steps to establish programs to mitigate and adapt to climate change. A
Metropolitan Air Quality Action Plan for 2006–2009 was prepared for the newly established Metro
Manila Air Shed Governing Board. The objectives of the plan were to support: (i) implementation of
urgently needed road rehabilitation works, (ii) traffic engineering training and management, (iii)
strengthening of ambient air quality management, (iv) public health monitoring, and (vi) anti-smoke
belching programs. Thus far, the measures proposed have been relatively ineffective, with political
agendas between agencies slowing the progress of the implementation of programs. Several local
governments have taken small measures to try and reduce air pollution and greenhouse gas (GHG)
emissions but these have proved relatively ineffective without an overall governance mechanism
and management of GHG emissions across the entire metropolitan region. The approach to GHG
emissions reduction is one of accepting the risks and managing the impacts as best the city can, as
they occur.

3.4.3 Water pollution and sanitation

Nearly 60% of water pollution in Metro Manila is caused by untreated residential sewerage being
discharged into open waterways or drainage channels (NEDA 2007). Only about 15% of households
are connected to a sewerage system (ibid). The Pasig River, which runs through the city, is
effectively an open sewer. Most of the city’s smaller rivers and streams are also heavily
contaminated from untreated residential and industrial waste. The lack of sanitation facilities,
coupled with potential human contact with raw sewerage, represents a high health risk, especially
from diarrhoea, cholera and other gastro diseases as well as infections from using contaminated
water for ablutions.

The local governments of Metro Manila and the MMDA recognise the seriousness of water pollution
but it is a difficult problem to solve as it requires expensive infrastructure, the relocation of people,
and the acquisition of land, as well as behavioural change. The latter is the most challenging issue
and will take time to educate the city’s population. Measures have recently been taken through the
Pasig River Cleanup Project to rehabilitate 24 kilometres of polluted river. The project will involve
progressive reduction in the discharge of industrial toxic waste and the use of community-based
facilities for the treatment of solid and water wastes to reduce the high level of discharge into the
river. The Project will, hopefully, help to clean up the river, but it will take several decades to re-
establish the river’s health. Unfortunately, the Pasig River Cleanup project cannot restore the quality
19
of the groundwater aquifer, which will continue to put at risk the health of the urban poor who are
drawing water from local wells in the catchment.

Another compounding factor affecting groundwater quality is that coastal areas of Metro Manila are
sinking. Many areas are already below sea level. This subsidence, which is the result of excessive
draw down of groundwater caused by over pumping, has led to saltwater intrusion and
contamination of groundwater. Given the close proximity of many wells to septic tanks and
filtration of industrial wastes into the aquifer, coastal areas have become a major health hazard. The
contamination of freshwater aquifers in these areas has resulted in greater risks to the urban poor
who have nowhere else to go. They are forced to buy water at high prices from tankers, but in many
cases, the quality of this water is little better than that drawn from local wells.

Solid waste is a major environmental problem. Metro Manila generates around 5,500 metric tons of
solid waste per day, of which only about 70% is collected. Pyatas, in Quezon City, handles more than
half of Metro Manila’s waste. The management of waste became a critical problem in Metro Manila
and other cities when it was realised that many land fill sites were discharging high levels of leachate
into groundwater systems. This was recognised as a national problem and resulted in government
passing the Ecological Solid Waste Management Act in 2000. The Act marked the turning point in
national attitudes to improve solid waste management and resource conservation.

Solid waste, on the other hand, provides significant opportunities for materials recovery and local
employment. Unfortunately, waste management sites have proved problematic in Metro Manila in
the past – and a disaster at Payatas in 2000 led to dramatic changes in waste management practices
in the Philippines. This is the focus of a case study later in the chapter.

3.5 Social Risks

Social risks are becoming an increasing concern for people living in Metro Manila. Manila is a city of
socio-economic extremes. In a country where the top 30% of income earners account for almost
90% of consumption (Encyclopedia of the Nations 2007) a very large proportion of the city’s
population is vulnerable to the traps of poverty, disease and malnutrition. Over 20% of Metro
Manila’s population fall below the poverty line and 35% live in informal settlements (ADB 2003).
More than 12.5% of the population are jobless. Between 30% and 40% of the working age
population are employed in the informal sector, mostly as petty traders or in small-scale service and
manufacturing enterprises.

The level of impoverishment in the low-income areas of Metro Manila gives rise to a volatile social
system where neighbourhood violence, eviction and pockets of extreme poverty exist across the
city. An estimated half a million people residing in poor urban communities live in fear of eviction by
government because they happen to live on land designated for major infrastructure projects. ‘The
failure of the government’s resettlement programs and continued neglect of housing as a basic right
has been become a strong focus of NGOs concerned about the plight of these communities and
other urban poor settlements in the future’ (Perlman 2007). The lack of adequate tenancy
protection laws means many thousands of tenants remain at risk of eviction, adding greatly to the
stress and paucity of health of the urban poor.

20
3.5.1 Terrorism
Terrorism has become a very significant social risk for people living in Metro Manila. In particular,
the prolonged civil war in Mindanao presents a significant terrorism threat to the nation’s capital
and bombing incidents have resulted in deaths. While the government is seeking to negotiate a
solution to the Mindanao problem, the peace process is likely to be long. Security to protect against
terrorism and civil crimes adds a high cost to personal safety, especially for those living in the city’s
wealthier residential areas.

Security also adds greatly to the cost of doing business in Metro Manila compared to other Asian
cities where crime rates and terrorism risks are much lower. Like so many risks facing Manila the
solution to the problem is external, and will involve solving complex issues such as land disputes,
regional poverty, literacy and employment creation. It is highly unlikely that the social risks that
confront Metro Manila can be resolved by simply addressing the problems locally and creating a
more fortified society. Lateral thinking and strategies are required to manage the city’s external
risks if Metro Manila is to be a safer city in the future.

3.6 Political and Legal Risks

The politics of urban development in Metro Manila are very dynamic, with regular changes of
administrations at elections, and widespread accusations of corruption and nepotism in local
government. Political and labour instability has significantly increased the risk profile of Metro
Manila as a city for doing business. The high level of political volatility has driven business and
government into supporting projects and activities that generate short-term profits and/or political
gains. The myopic view of the development process caused by short cycles of local government
politics is significantly hindering commitment to the provision of basic infrastructure and services.
Short political cycles provide significant opportunities for rent seeking, and are a contributing factor
to the Philippines being ranked as one of the most corrupt countries in Asia (Quimpo 2009).

The Philippines is possibly one of the most litigious and bureaucratic democracies in Asia. The
bureaucratic systems in central and local government are multi-layered with a six tier level of public
administration. The six tiers are: national, regional, provincial, cities, municipalities and barangays
(local community councils). In Metro Manila there are also four levels of public governance.

The effect of these multiple levels of government and complex and dated legal systems is that it can
take years for development decisions to be reached. Subsequently, development tends to occur
without formal endorsement and approval, especially on land where tenure and ownership is
unclear. Authorities are reluctant to prosecute or take action to prevent the development of illegal
structures and the private sector uses the legal process as a means of frustrating approvals or
stopping rival development projects from going ahead.

The legal profession is exceedingly profitable in the Philippines, with the country having as many
lawyers per capita as the United Kingdom and Japan (August 1992). Despite the high numbers of
lawyers, few measures have been introduced to improve the implementation of administration
systems for planning, land and environmental laws. This adds greatly to the uncertainty and risks
associated with land and property transactions. In 2008, the Supreme Court approved a proposal to
designate courts for environmental adjudication to hear cases involving violations of laws on
21
environmental protection and to accelerate the resolution of such cases (Vina, Agsaoay-Sano et al.
2009). Unfortunately, the situation with respect to planning and development has not been as
progressive, resulting in significant delays to development issues.

The failure to streamline the administrative and legal processes with respect to planning and
development approvals and control, land administration and management has added greatly to
development costs and delays in the release of land to the poor and low income earners. The
judicial and bureaucratic costs and delays not only put the poor at risk, but also business, which is
seeking more streamlined approval and legal processes to attract investment. An initiative to reduce
governance risk has been taken by Taguig city and this is presented in a case study later in the
chapter.

3.7 Risk Management and Resilience Strategies for Metro Manila

A United Nations study in 2009 ranked the Philippines seventh among the ten Association of
Southeast Asian Nations (ASEAN) in its capacity to manage disasters (UNISDR 2009). While the
citizens of Metro Manila are becoming better organised in responding to risks and the impacts of
natural disasters, there are many other types of risks facing the city, such as climate change and
sudden water loss, which have the potential to seriously impact on the city and its population.
Metro Manila is poorly equipped to prevent and manage the potential impact of these latent and
cumulative risk events. Authorities have introduced some measures to improve disaster mitigation,
as well as adaptation and management strategies for urban resilience, but there is a need for a more
proactive approach to fostering resilience in the post-disaster or shock recovery phase. Some
measures currently in place to improve disaster management and foster resilience are discussed
below.

3.7.1 Early Disaster Management Initiatives

There has been a long history of attempts by government to prepare and assist communities to
manage the impacts of natural disasters. The first attempt was during the Japanese occupation with
the creation of the Civilian Protection Service (CPS) (NDCC 2008). The CPS was empowered to
formulate and implement plans and policies to protect the civilian population during air raids and
other national emergencies. In 1954 Civil Defence Councils were established to provide protection
and welfare to the civilian population during national emergencies. In the aftermath of Typhoon
Sening in 1970 which caused severe flooding in Metro Manila, a Disaster and Calamities Plan was
prepared which led to the establishment of the National Disaster Control Centre and local Civil
Defence Associations (CDA). CDA roles were primarily to deal with disaster management – not
disaster mitigation and prevention. The responsibility for disaster prevention rested with many
other agencies of government, but little cooperation or knowledge sharing occurred between
agencies.

3.7.2 Integrated Disaster Management Planning

In 1991, the Philippines government made its first attempt to introduce integrated disaster
mitigation and foster more sustainable urban development in its Medium-Term Philippine
Development Plan. All local governments were required to incorporate disaster management plans
into their local development plans (EMI 2005 :6); however, few did so. Some disaster mitigation and

22
recovery strategies were encompassed in the development of local government in Metro Manila,
but there were never sufficient resources available to implement key projects and programs.

In 2007, a Mega-city Disaster Risk Management Plan was prepared for Metro Manila (EMI 2007).
This was the first time a risk management and mitigation plan had been prepared for the whole of
Metro Manila. The Plan introduced measures (p.4) to:

a) strengthen the Metro Manila Disaster Coordinating Council (MMDCC)

b) promote and adopt disaster management ordinances in each city and municipality
c) promote the revitalisation of city/municipal/barangay disaster coordinating councils
d) enhance lateral and vertical inter-agency and inter-governmental communication and
coordination
e) institutionalise disaster risk management within local government frameworks and financing
f) promote local government mitigation planning through existing planning tools
g) conduct training needs assessments and develop capacity building programs.

The Plan has yet to be fully implemented, but like so many other plans for managing Metro Manila it
lacks resources.

3.7.3 Makati City’s Disaster Risk Management Initiatives

Several cities in Metro Manila have established Disaster Risk Management Plans. In particular,
Quezon and Makati Cities which have prepared local disaster management plans. Makati City, under
an initiative for Risk-Sensitive Urban Redevelopment Planning, has mapped disaster impact areas
that could be affected by typhoons, floods and earthquakes (Seva 2008). The Plan aims to
strengthen emergency service response and capability, particularly at the local community or
barangay level; improve delivery of humanitarian assistance to disaster affected populations; and
provide a tool for Damage Needs and Capacity Assessment (EMI 2005 ). The city has also carried out
a series of emergency training and simulation programs and seminars to advise the community what
to do in an emergency, and to train emergency response teams. The program has been extended to
deal with weapons of mass destruction, terrorism and mass evacuation in case of a major health
scare or industrial accident.

Unfortunately, Quezon and Makati City’s local disaster management plans still lack the technical and
intuitional capacity and finance to be effectively implemented. This became very apparent during
Typhoon Ondoy in 2009. However, responses to the typhoon by the two cities were far more
effective than other cities in Metro Manila that did not have plans. Had a plan been prepared for
Marikina City, the disaster response to the typhoon may have been more effective. The preparation
of local city disaster management plans should be mandatory and their integration into the
metropolitan plan is needed urgently to address future events that could once again cause
widespread damage across the city.

3.7.4 Community Resilience Initiatives

Low income urban communities in Metro Manila have shown remarkable resilience in the face of
economic and tenancy uncertainty. The concept of community resilience should be considered as an
asset of risk reduction in these urban areas (Shaw 2009). The Citizens’ Disaster Response Centre has

23
developed manuals and training programs that have been adopted by poor communities to better
protect them from natural disasters and other threats. More recently, a stronger focus has been
given to community education, impact strategy management and post-disaster recovery with local
NGOs and research organisations fostering programs to address both mitigation impact and
resilience responses to disasters. There is still a need to develop better frameworks for preparing
urban resilience strategies that go beyond repairing damaged property, infrastructure and the
environment, to embracing trauma and economy recovery, and community learning to identify
improved ways to prepare local communities to manage the wider range of shocks and recovery
efforts.

4 Local Government Case Studies of Risk and Resilience Initiatives

While city level responses and strategies to support urban resilience in Metro Manila still have a long
way to go, several local governments and communities have developed and implemented projects
which are examples of good practice urban resilience. These measures could be applied in other
municipalities across the city and elsewhere in the Philippines. The following four case studies
explore different dimensions of economic, social, governance, physical risks and resilience in three
cities in Metro Manila. Some case studies have had localised impacts, others have had a more city-
wide impact. Each case study includes some background information leading up to a risk event and
a description of the impact. The subsequent response by city governments and communities is then
described. Finally, the impact and lessons gained from the resilience strategy and its future
relevance to urban and disaster management practices in Metro Manila are presented.

4.1 Fall and Transformation of the Shoe Capital of the Philippines

The City of Marikina, located in the eastern part of Metro Manila (see Figure 3) has been the centre
for Philippines textile, clothing and fashion manufacturing for more than 125 years. Shoemaking in
Marikina was pioneered by Don Laureano Guevara, who is known as the ‘Father of the Shoe
Industry’(Marikina-City 2007). Until the mid 1980s, the shoe industry in Marikina was heavily
protected by tariff barriers and other policies designed to support the development of import-
substitution manufacturing industries. After the Marcos era, import substitution policies were
replaced by more open market economic policies designed to encourage competition and attract
new industries to the Philippines.

Following the Philippines membership of the World Trade Organization (WTO) in 1995, the Marikina
shoe industry began to lose competitiveness to countries like China, Korea and Taiwan (Scott 2005).
By 1998 the industry had fallen into a steep decline; exports dropped from $US146 million in 1998 to
US$25 million in 2006. The collapse of the local shoe industry was also adversely affected by a high
incidence of smuggling, the relocation of local manufacturers to other southeast Asian countries
(Bacalla 2004:3) and the unwillingness of local consumers to continue patronising and purchasing
local, more expensive, shoes (Scott 2005). The Philippines now imports most of its shoes.

What remains of the Philippines export shoe industry market is mostly non-leather mid-brand
footwear, parts of footwear, consigned footwear, slippers, sandals and sports footwear (ACC
2008:26; Khan 2009). These are exported mainly to Mexico, Japan and the USA. The majority of
these goods are produced in Marikina. There are about 340 firms in Marikina still involved in the
24
manufacture and export of shoes, with the majority of firms having less than ten employees. Most
small firms are engaged in manual production, but the larger firms are more mechanised. It has
been a practice to import parts and accessories, such as the soles, heels, etc, for the manufacturing
of shoes. The effect of this practice has been a significant contraction of the local industry supply
chain.

4.1.1 Response Initiatives

The predicament facing shoe manufacturers triggered new efforts to rebuild the industry and
modernise it to become more internationally competitive. The industry recognised it had not
established significant linkages with international shoe manufacturer supply chains (Scott 2005:79),
nor was it willing to collaborate to reduce the transaction costs of doing businesses. Much of the
capacity of the firms was under-utilised and there was a reluctance to specialise. Marikina has
retained its skill base in shoemaking, as many of the skilled workers still live in the area, however
most have found other forms of employment.

Several initiatives were introduced by the Marikina City government and shoemakers in the early
2000s which have helped stabilise the fall in exports and revitalise the domestic industry, albeit in a
small way. The first was the Philippine Footwear Design Competition Sapatero Festival in 2002,
which was supported by the Marikina City government. The objective of the event was to provide
an opportunity for shoe makers to market and sell their products and to increase the awareness and
visibility of the local industry. In 2002 the Samahan ng Magsasapatos sa Pilipinas (League of Filipino
Shoemakers) was established to work together to rebuild the shoe manufacturing industry. The
Marikina City government and the Philippine Footwear Federation lobbied the House of
Representatives successfully to pass the Footwear, Leather Goods and Tannery Industries
Development Act (Act 9290) which enabled the shoe industry to secure government assistance to
help revitalise the local industry (Scott 2005:90).

An important initiative to support the recovery of the industry in Marikina was the establishment of
an industry cluster organisation, SikapMo Inc, in 2003 (Scott 2005:85-88). SikapMo has 80 members
(including 50 manufacturers) and is the prime vehicle for shoe manufacturers in Marikina to
promote their products in global markets (Valt 2007). ‘Marquina’ was established as the common
brand name for shoe products by SikapMo members. SikapMo also conducts training programs and
seminars for factory owners and workers to introduce them to more efficient manufacturing
systems, quality control and product costing.

The collaborative efforts of the Marikina City government and local shoe manufacturers have been
crucial to revitalising the local industry. It is still going through substantial restructuring and
transformation, and it will be some time before it will be able to re-establish its competitiveness and
gain a greater global market share of shoe exports but SikapMo notes that its members’ sales in
2006 reached Php50 million (US$1m) up from Php2 million three years earlier, when the cluster was
first formed. The partnerships that have been created in the industry provide a strong institutional
base to facilitate appropriate programs and projects that are helping to boost production—
especially by small and medium-scale operations.

25
Collaborative marketing efforts by manufacturers are also helping to establish linkages in the global
market, although these are still relatively weak. Moreover, the partnerships provided by the local
government have enabled a sense of ownership and trust to develop between shoe manufacturers
because their involvement in the programs and projects has been implemented in a collaborative
manner. The programs and projects have also been helpful in promoting local shoe products to local
consumers. The shoe industry is transforming and is on the road to recovery but it is unlikely it will
ever regain the dominance it once enjoyed in the times of tariff protection and strong national
government industry support.

4.2 Payatas: A Waste Mountain that Moved

The Payatas dumpsite, located at the northeast part of Quezon City in northeast Manila was
established in 1993. The area was initially intended for a 30 hectare upmarket housing development
estate for Quezon City. Prior to its development as a dump site, the surrounding areas had well-
developed streets and residential homes. The site, currently receives over 6,700 m3 of waste a day
from Quezon City and Pasig City (Tanchuling, C. Seedao et al. 2009). Since it opened, more than two
million tonnes of waste has been dumped at the site — making it one of the largest waste dumpsites
in Asia.

Figure 4 Payatas Waste Dump, Quezon City

Initially the dumpsite was intended just for disposal of wastes from the neighbouring Payatas
housing development; however, the closure of the nearby Smokey Mountain Landfill significantly
26
increased the load of wastes dumped at the Payatas site. In addition, squatters residing in Smokey
Mountain were relocated to Payatas. By 2002, the landfill at the dumpsite was reaching its
maximum height of close to 20 metres (Merry, Kavazanjian et al. 2005).. Concerns were raised about
the dangers it posed to the site’s stability and a closure design was prepared. The Payatas dumpsite
was scheduled to be shut down in 1998, but the Quezon City government requested the MMDA
extend the use of the site because it lacked the financial capacity to transport waste to a landfill site
in San Mateo, east of Manila, in Rizal Province (Merry, Kavazanjian et al. 2005).

In July 2000, Manila was hit by two typhoons which brought heavy rains over 10 days. The dumpsite
became saturated and began to move. A mountain of garbage and mud flowed rapidly downhill
burying hundreds of slum dwellers residing near the dump — 278 people died. In addition, the
landslide released methane gas trapped under the leachate water level and fires broke out causing
significant damage to property and loss of life (Merry, Kavazanjian et al. 2005). The severity of the
tragedy was also due to other factors including lack of compaction of garbage; the steepness of
slope; poor site management practices; the lack of a barrier fence, and the failure to remove slum
dwellings at the dumpsite.

Five days after the incident the dumpsite was closed. However, it was re-opened in November 2000
— with the exception of the collapsed section — as there was no alternative site available which
could take Metro Manila’s waste. Ironically, the request to re-open the dumpsite was initiated by
the residents of Payatas, 8,000 of whom depended on the dumpsite to scavenge. To the scavengers,
Payatas was not a symbol of poverty, but a good place to make a living. (Gonzales 2003).
Nevertheless, to avoid a repetition of the tragedy, the Quezon City government established a 50
metre wide danger zone at the foot of the waste heap and demolished all dwellings within the zone.

4.2.1 Response Initiatives

Following the tragedy, the Philippines government established a taskforce for the rehabilitation of
the site and the relocation of affected persons. The rehabilitation of Payatas turned out to be a
good example of multi-sectoral collaboration between the Quezon City local government and the
community, slum dwellers, non-government organisations and people’s organisations. The expertise
offered by the University of the Philippines, MAPUA Institute of Technology the University of
Singapore and the private group IPM Environmental Services, was also invaluable in assisting the
recovery effort (GGP 2008).

Four NGO organisations worked in partnership with the city government to relocate families residing
along the danger zone. Quezon City was prompt in the implementation of The Ecological Solid
Waste Management Act of 2001, which mandated the closure of all operating open (illegal)
dumpsites by February 2006. Quezon City is recognised as the first city in the Philippines to
implement this law (GGP 2008).

The conversion of Payatas to a controlled waste management facility began in 2004. The conversion
included reshaping the slope of the wastes, stabilisation and greening, improving the drainage
system and roadways to enhance accessibility to the area, and gas venting and material recovery.
Several other initiatives have also been taken to reduce the risks of a future tragedy (Queson-City
2009). These include organising waste-pickers into formal groups and establishing a used tyre

27
retrieval project in collaboration with a cement company. The retrieval project recycles discarded
tyres recovered from the dumpsite and uses them as an alternative fuel resource for cement
production. Those who wish to use the waste management facility are required to pay an ‘entrance
fee’. It is estimated that 10% of the fees are allocated to the barangay or village council, while the
remaining 90% is managed by the city government. The financial earnings of the dumpsite are used
to maintain the area e.g. road repairs, drainage, security and the provision of local ablution facilities.

The waste-pickers program was organised to avoid livelihood competition and violence among
scavengers. The groups are consulted regularly about the operation and management of the
dumpsite. The program also formalised the junkshop business operations with scavengers.
Moreover, scavengers, recyclers and junkshop operators now have the opportunity to avail
themselves of financing, education and skills training which will enable them to earn additional
income and/or embark on an alternative livelihood if they choose. (Sia-Su 2007).

A 100kW pilot Methane Power Plant Gas to Power Generation Project was inaugurated in 2004 in
collaboration with an Italian company and the Philippine National Oil Company Exploration
Corporation (PNOC)-EC. This biogas emissions reduction project is registered as a Clean
Development Mechanism (CDM) under the Kyoto Protocol of United Nations Framework Convention
on Climate Change (UNFCC). It has the potential to be expanded to 200kW in future.

4.2.2 Lessons for Resilience

The Payatas tragedy provided important lessons for local governments in the Philippines about risks
associated with poor waste management. There have been many positive outcomes from this
disaster. The initiatives undertaken by Quezon City to revitalise Payatas resulted in it being given
the Galing Pook iv organisation award for innovation and excellence in local governance in the
Philippines in 2008 (GGP 2008). Payatas has created new local employment opportunities through
the recycling and reprocessing of its waste. The biogas project has enabled electricity to be
generated from waste, and this has created new employment opportunities; facilitated technology
transfer, and generated additional financial resources from the sale of carbon credits and electricity
produced by the power plant. Finally, the project has created opportunities for innovation, with soil
from the old Smoky Mountain waste dump being processed then bagged and sold for growing
vegetables. The recovery from the tragedy in 2000 is a remarkable example of urban resilience.

4.3 Quezon City: From Fiscal Disaster to Sound Financial Management

4.3.1 Crisis
Quezon City is the largest city in the Philippines, and like all local governments is faced with the
problem of collecting local property taxes and raising capital for essential infrastructure and public
services. Much of the problem of collecting property taxes relates to poor land administration and
management (Antonio 2007) and the weakness of the land and property tax system (LAMP 2002;
Land-Equity 2002). Property tax collection in Quezon City has been particularly problematic with
many disputes over title, fraudulent land deals and very poor management of land and property tax
records. In the Philippines some national government taxes are collected by local governments, and
this has created opportunities for rent seeking and fraud.

28
In 2001 Quezon City experienced a serious financial crisis. The local government ran out of cash. An
estimated PhP1.4 billion ($US33m) was due in accounts payable, bank debts exceeded PhP1.25
billion ($US29m), and unpaid allowances to teachers, police and utility workers amounted to over
PhP60 million ($US 1.4m) (GGP 2009). Moreover, the city budget allocated for the year had been
expended, so the city government was unable to provide services such as garbage collection and
healthcare. In the subsequent election, the former mayor lost office and the new mayor and
administration set about restructuring and improving the city’s finances.

4.3.2 Response Initiatives

The new administration introduced a series of tough measures to reduce public debt and improve
revenue collection (Quezon-City 2006). Incentives were offered to encourage citizens to pay taxes
(GGP 2003). These included: a discount for early payment of real property tax, improvement of tax
payer facilities (e.g. automatic queuing system, free coffee and tea, and television) and a public
awards ceremony for the ten outstanding tax payers.

To improve revenue collection, letters were sent, and house visits made, to delinquent tax payers to
remind them of their tax obligations. Debt recovery and cash flow improvements were assisted by
auctioning the property of delinquent tax payers. Presumptive minimum gross sales/receipt levels
were set for business taxes, which required business establishments with gross receipts beyond PhP
0.5million ($US 11,750) to submit monthly payments of VAT and non-VAT information. Real estate
transfer payments were to be submitted with a confirmation of payment of other taxes.

The local government’s record management system was converted from paper to computerised
records. Mechanisms for checks and balances were introduced in the city treasurer’s office and
revenue examiners were rewarded and/or penalised relative to their actual collections (Manasan
and Villanueva 2006:11). To discourage fake collections, new official receipts were institutionalised
(GGP 2003) and this significantly reduced fraud in revenue collection and accounting.

These fiscal reform initiatives paved the way for the creation of the Quezon City Information
Technology (QCIT) system in 2002 (Quezon-City 2008). The QCIT provides support to various
information management systems such as tax collection, tax assessment, land data, fiscal
management and financial administration and reporting. These systems are integrated through an
on-line transactions system which enables real-time transactions for tax collection and assessment.

4.3.3 Improved Fiscal Performance

Since the introduction of the fiscal reforms in 2002 and conversion to a computerised tax collection
system, there has been a consistent increase in real property and business tax collection. Real
property tax has increased from PhP2.1 billion (US$42m) in 2002 to PhP2.5 billion (US$50m) in 2009.
City government revenue from business taxes increased from PhP1.13 billion (US$31m) in 2002 to
PhP3.10 (US$62m) in 2009. The number of businesses paying taxes also increased from 41,600 to
59,000 (GGP 2009:12). After the first year of fiscal reforms in 2001, the Quezon City government
recovered an estimated PhP3 billion debt (US$70m) and successfully generated a PhP2.2 billion
(US$52m) surplus by 2003.

29
The computerisation of tax collection also produced positive outcomes related to city governance
such as: reduction of red tape and layers of bureaucracy — which enhanced efficiency in revenue
collection; greater convenience for tax payers to meet their tax obligations because of the reduced
processing time of transactions (the processing of tax declaration application, the procedure has
been reduced from 20 steps to nine steps), virtual elimination of the issuance of fake receipts and
thus the opportunity for corruption.

The Quezon City fiscal crisis provides a good example of how a financial crisis can trigger reforms
which had been inherently difficult to achieve during normal times. The crisis created a shock which
led to the introduction of innovative practices in local government financial management. Whilst
there is still room for many more improvements in public administration and financial management,
Quezon City has benefited greatly from this crisis. Public services and infrastructure have been
improved, corruption in local government has been reduced, albeit not eliminated, property markets
are running more efficiently and effectively, and administration systems within the city’s
organisation have been converted from manual to electronic systems. The lessons and applications
learned from this case study could be replicated and applied as resilience strategies elsewhere in the
Philippines.

4.4 Taguig: From Laggard to Leader City in Business and Housing Development
Taguig City, in the south eastern part of Metro Manila lies on the western shore of Laguna Bay and
covers an area of 45,382 km2. Taguig was declared a city in 2004 and currently has a population of
700,000. Much of the city was formerly a military reservation. It is one of the fastest growing cities
in the Philippines, with a very high proportion of its population living in squatter settlements
(Taguig-City 2009).

Prior to becoming a city, Taguig was very poor and struggled to develop and attract investment.
Increasing numbers of informal settlers were hindering the smooth development of the city (GGP
2008). Taguig was developing as a dormitory city within Metro Manila, with a high level of poverty,
unemployment and uncontrolled squatter settlements. High crime levels put lives and property at
risk. The result was a crisis situation. Solutions to the many problems associated with rapid
urbanisation needed to be found. The city had several large areas of relatively unencumbered land
available for development, but not the capacity nor machinery of government to develop them. The
largest of these areas was Fort Bonifacio, in the north west of the city, adjacent to Makati City.
Taguig City government recognised that if the city was to prosper it would have to improve the
competitiveness of its business enabling environment, strengthen governance, and develop major
projects that would be attractive to investors and developers.

4.4.1 Response Initiatives]

In 2001 a newly elected Mayor set about enhancing the attractiveness and security of Taguig as a
place in which to live and invest. In 2002, the city began preparing a city development strategy
(CDS), supported by the World Bank Cities Alliance. The strategy was formulated around three
development objectives: to improve delivery of basic services; to widen economic opportunities, and
to enhance local participation in development (Cities Alliance 2005).

30
In 2008, the city sought to become more globally prominent and to enhance its competitiveness as a
place for business. Taguig developed a 2020 Vision which was to be the Philippines’ Premier City in
support of the CDS objectives. To do this, the local city government focused on improving social
services in health, education, environment and sanitation; infrastructure and utilities, and housing.
The local government has also implemented an ordinance which encourages investors and
employers to hire 70% of their employees from Taguig (ADB 2004:65). In addition it has adopted a
new comprehensive land-use plan to manage the development of the city (Taguig-City 2009). Taguig
has been very active in fostering public and private sector partnerships involving education, social
welfare, and development to overcome its management capacity problems and to elevate the city to
a more premier status nationally and internationally.

4.4.2 Business Friendly Taguig

In 2008, the city introduced a number of regulatory development reforms. Taguig now tops the list
for having the easiest entry requirements and fastest means to start a business in the Philippines. A
business permit is obtained through the Business Permit and Licensing Office and payment of fees is
done at the City Treasurer’s Office. Inspections follow once business operations start. It takes 15
procedures, executed within 27 days, to start a business in Taguig (World Bank 2008:7) . Other cities
in Metro Manila take twice as long to issue business permits.

Taguig also has the advantage of having the easiest process to obtain construction-related
authorisations. This is done with only 23 procedures, compared to 33 procedures for other cities in
Metro Manila. The city has introduced a customer service centre and clients are only required to
submit all their documents to this ‘one stop shop’ to acquire a business permit (World Bank
2008:11). The city government has also introduced an Integrated Service Information Software
(ISIS). ISIS provides an online system which serves as a link between the city government and all
registered business establishments in the area. This online service makes government-related
transactions very convenient for business establishments in Taguig.

4.4.3 Housing for the Poor

In September 2006, the city government launched the Family Townhomes Project (GGP 2008:24).
This project aims to address the squatter housing problem in Taguig (FAB4 2008). The desired
outcome of the project is the relocation of informal settlers into affordable houses. Under the Family
Townhomes Project the city government shoulders site development costs while NGO partners
provided housing subsidies for the project.

By means of a ‘usufruct arrangement’, the city government initiates ownership of the housing units
in the Project. Under the terms of this arrangement, the rights to the land remain with the city
government but the beneficiaries are given an opportunity to own the unit through amortisation.
These units can be repaid with a minimum payment of PhP500 to PhP1,800 (est. $11–$38) per
month for thirty years. However, in lieu of a cash down payment for the loan, beneficiaries are
instead required to render 1,000 hours of volunteer work building houses.

As of February 2009, the Family Townhomes Project had provided 535 low income families with
good housing in the area of Pinagsama Village and FTI Compound in Western Bicutan. A further 242
housing units were completed in three other barangay areas in 2009 and an additional 843 units are
31
scheduled to be built in 2010 (GGP 2009). The Family Townhomes Project has been recognised as
the country’s best housing program and was a recipient of the 2008 Galing Pook Awards.

The Taguig City case study provides an interesting approach to managing problems of urbanisation
resulting from high levels of immigration and spill-over population from other cities in Metro Manila.
Faced with managing rapid urbanisation and providing opportunities for investment and job creation
it has achieved significant results by thinking locally and acting globally in attracting investment and
streamlining business regulations. Civic leadership and entrepreneurship have enabled the city to
develop a clear vision of its development priorities, plan for growth and provide housing and jobs for
the urban poor. In so doing it has succeeded in reducing its level of risk exposure.

5 Lessons Gained for Risk and Resilience in Manila

Metro Manila, like many other Asian cities, has become a very large and spread out city. It is a
mega-city which is expected to reach a population of 20 million by 2020, at which time, more than
half its population is likely to be living in sub-standard accommodation in areas vulnerable to
subsidence, poor sanitation, tidal inundation and flooding. Metro Manila has experienced many
natural disasters during its history. While it remains highly vulnerable to damage from future
typhoons, earthquakes, rising sea levels and volcanic eruptions, it is a city which has shown a
remarkable resilience and ability to recover from past challenges. As the city develops, however, the
risks it faces will likely become more severe and complex, and the capacity of government and its
inhabitants to deal with these events, will become increasingly difficult.

The citizens of Metro Manila have learned to live with natural disasters and most accept them as
part of the risk of living in the city. With little prospect of employment in the provinces and regional
cities, tens of thousands of people migrate to Manila each year in search of employment and a
better way of life. The ability of the city to absorb these increasing numbers is stretching the
capacity of authorities to provide basic services, housing, transport infrastructure and community
facilities. New arrivals are being forced more and more to settle on marginal land which is
susceptible to flooding and subsidence and has poor access and insecure tenancy. The vulnerability
of citizens of Metro Manila is therefore mounting, and governments, in general, seem less able to
provide certainty or reduce their level of risk exposure. The situation is made worse by constant
rent seeking by urban developers and local governments; weak land administration, management
and property tax systems; and high levels of tax avoidance.

Major reforms are necessary to improve land-use and development practices if Metro Manila is to
reduce the current level of risk exposure to its urban systems. Such reforms have been discussed for
decades and many plans, regulations and safeguards have been put in place but, unfortunately, few
of these have been implemented or enforced. Public authorities, for example, were well aware of
the dangers of flooding in the Marikina Valley before Typhoon Ondo struck, but authorities chose
not to adopt mitigation measures which had been identified more than 30 years earlier which would
have avoided the level of impact of this calamity.

The failure of the planning and development control system to manage development risks has
resulted in Metro Manila putting itself at even greater risk of future catastrophe. As discussed earlier
in the chapter, the city has developed as a polycentric city, and there is enormous competition and
32
rivalry between local governments to attract investment, create jobs, build houses for all and
provide necessary basic infrastructure. The failure of the MMDA to effectively plan and coordinate
development and eliminate rent seeking opportunities for the development industry to play off one
city against another adds to the problems and uncertainty facing the city. There is no sense in Metro
Manila that the city must learn to collaborate competitively in order to attract international business
and investment, and to reduce transaction costs that will enable the city as a whole to build some
form of competitive advantage. A similar scenario applies to disaster management planning and
mitigation, climate change adaptation and pollution control. These are city-wide issues requiring
city-wide solutions beyond the resources and capabilities of one or even a small number of the local
governments that make up Metro Manila.

Despite these issues, the case studies discussed provide valuable lessons on risk and resilience which
can be applied elsewhere in the Philippines. The case studies demonstrate the following salient
points: First, crises or catastrophes have been a major agent of change in governance and
development practices in Manila. This was revealed clearly in the Quezon City, Payatas and Marikina
Shoe industry case studies where government and business failed to address obvious problems
before a crisis occurred.

Second, leadership and regime change is a critical factor in resilience. New leadership and
governance resulted in the introduction of fresh ideas, innovative practices, administration reforms
and new development and urban management models.

Third, collaboration and partnerships are important in overcoming resource and capacity constraints
in local government. They also help to spread risks, but they do require greater levels of trust,
transparency and accountability. This was very apparent in the recovery effort made for the Payatas
Waste dump disaster, and the Taguig Family Townhome project.

Fourth, communities recover from disasters much better and faster if control over decisions is
delegated and there is self governance and ownership of the recovery project. Communities and
business have much greater capacity to mobilise and leverage resources than governments, and
there are much higher levels of control over the way resources are used. This was especially
apparent in the Taguig low income housing project.

Fifth, community information services are critical to manage crises and post-disaster recovery
efforts. This is one of the important lessons gained from Typhoon Ondo in September 2009. Had
these communities been better informed, damage and loss of life would have been less.

Finally, learning to think (or be aware) globally and act or respond locally is critical to dealing with
external events and shocks. This will be an important consideration for local governments and
businesses to address future climate change, free trade, financial and energy cost issues. There is
currently a low level of awareness by local government and business of the importance of linking
into global supply chains, integrating and collaborating with global firms and business partners. Such
arrangements are critical to protecting and developing markets, reducing business transaction costs
and minimising risks. The shoe industry in Marikina collapsed because of the failure to do this.

6 Conclusion
33
The study of risk and resilience is important to improving the management of cities and reducing
risk. Large cities like Metro Manila operate in the global economy, which makes them much more
vulnerable to external shocks than regional cities which tend to service local hinterlands. It creates a
difficult balancing act for governments on the level of resources they should allocate to the
management of external shock events — which are very unpredictable — and to mitigation and post
disaster management of more localised shocks and disasters. While there is an emerging research
focus on sustainable cities and risk management, there remains a generally poor scientific and
technical understanding of the processes and factors that make some cities more vulnerable to
shocks and disasters, and why some cities are more resilient in recovery than others. This may be
due, in part, to the fragmented nature of urban science and policy (UNISDR 2008).

A fresh approach is required to questions related to urban resilience. This is necessary to

understand cities as complex adaptive economic-socio-ecological systems, to develop ways of
assessing urban vulnerability and to identify principles and opportunities for building resilience in
urban systems. The Asia Regional Task Force on Urban Risk Reduction notes that ‘building resilience
is particularly important in areas such as coastlines, cities, agricultural land and industrial zones
which are often the most impacted by humans. It is the same areas that people value highly, both
economically and aesthetically, and upon which the well being of society often depends’(UNISDR
2008:2). Unless Metro Manila, and other Asian cities, can develop better responses to urban risk
management and embrace resilience approaches, they will likely become even more vulnerable to
shocks and disasters and less liveable places in the future.

34
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No. 4. Calgary, Canada, Agriteam Canada Consulting Ltd.
ADB (1998). Philippines: Metro Manila Air Quality ImprovementSector Development Program.
Manila, Asian Development Bank: 124.
ADB (2003). Metro Manila Urban Services for the Poor 3CD City Profiles Series Manila, Asian
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Endnotes

i
Metro Manila is made up of the cities of Manila, Caloocan, Las Piñas, Makati, Malabon, Mandaluyong,
Marikina, Muntinlupa, Navotas, Parañaque, Pasay, Pasig, Pateros, Quezon City, San Juan, Taguig and
Valenzuela.
ii
The author is indebted to Ms Corella Cabannas for the research to collect the background material for the
preparation of the case studies.
iii
Inputs from Dr Michael Lindfield of the Asian Development Bank, Manila are acknowledged.
iv
Galing Pook is a leading Philippines resource institution continuously promoting innovation and excellence in
local governance.

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