Urbanization and the Rise of Makati

06.22.2016
Society Economy

The urban development of Manila in the last half-century has taken an outward thrust, turning its back to the core city, and annexing the immediately adjacent areas as private estate development.

By Clara Aseniero

Background: Urbanization in Metro Manila

Metropolitan Manila, the Philippines’ National Capital Region with a registered population of 11,855,975 in the last census, is the 5th largest urban area in the world, after Tokyo, Jakarta, Delhi, and Seoul (Demographia World Urban Areas 2014, 20). Of the five cities it has the smallest area (1,580 square km, less than half that of Jakarta), and therefore has the highest density (14,400 per square km). Metro Manila dwarfs the second biggest city in the Philippines, Davao, with just 1.5 million inhabitants, and is therefore the primate city par excellence. It serves as the political, financial, commercial, and educational center of the country—a role it has played through four centuries since its founding in 1571 by the Spanish colonizers.

Endowed with an excellent harbor, Manila played a major role in world trade in the 16th, and 17th centuries through the Manila-Acapulco Galleon Trade that linked the economies of Spanish America and Asia. It continued to be a major port as the Philippines began exporting agricultural produce (specifically sugar, tobacco, and abaca) to Europe and the United States during the Industrial Revolution.As a port city, Manila has seen continuous concentration of economic activities within its expanding area, stimulating urban migration from all regions of the Philippines. Its exponential growth, especially in the last century, reflects a basic imbalance in the country’s socio-economic development. Despite efforts to develop other urban centers, such as Cebu in the Visayas and Davao in Mindanao, Manila remains the main destination of Filipinos seeking employment, and its resulting population growth exceeds those of the other centers. 

Figure1

Figure 1 Map of Metro Manila and its constituent cities and municipalities

The urban development of Manila in the last half-century has taken an outward thrust, turning its back to the core city, and annexing the immediately adjacent areas as private estate development. The historic core of the city, Intramuros, which the Spanish built in 1571 over the existing settlement by the bay, was razed to the ground in the last days of combat in the Second World War.

Figure2

Figure 2 Plan of the walled city of Intramuros from 1851 

This core, with an area of sixty-four hectares, was not systematically restored, and only in recent years has the old city seen major reconstruction. Yet, even still, large areas have remained undeveloped, and inhabited by informal settlers—“squatters.” Meanwhile, the other historic districts of the city, such as Ermita, Malate, and Quiapo, which were less devastated, saw rapid rebuilding right after the war.2

Figure3

Figure 3 Manila circa 1960. Upper left shows a portion of the walls of Intramuros, Manila’s original “gated community” of the Spanish colonial elite, the capital city within fortified walls from 1571 to 1898, when Spanish colonialism ceded the country to the United States. Foreground shows Ermita, the site for America’s “Washington in the tropics” laid out by famed urban planner Daniel Burnham in the first decades of the 1900s. The background shows part of Binondo, the oldest Chinatown in the colonial world, and contemporaneous with Intramuros, and that was later the center of commercial capital. To the right is the beginning of Malate, the residential area of Manila’s elite until the 1960s, when the new, gated communities of Makati started to lure the elite away from “Old Manila” to the modern suburbs.

In the 1960s, urban development took a different turn; rather than rebuild the rest of the inner city, private capital chose to develop new areas outside of Old Manila, acquiring them as vast estates to be turned into business centers and gated residential communities for the elite. With the exception of the Marcos period, which attempted to curb the power and influence of the then-ruling elites (to be replaced by Marcos’s own set), urban development has been in the hands of private sector developers directed by landed Filipino families, such as the Ayalas, Aranetas and Ortigases. Notably, this first group of real estate modernizers are of Spanish descent who started out with their own inherited estates, whilst today’s developers include families of Chinese descent who purchased and consolidated lands. Makati, south of Manila, and Ortigas in Pasig, west of Manila, have been the two major privately developed business districts in the last forty years, in the hands of only two mega-developers, Ayala Land and Ortigas.

Rapid urbanization from the fifties onwards posed major problems for the Philippines’ developing economy. The population of Metro Manila grew exponentially following World War II, with the most rapid and uncontrolled growth occurring in the 1950s and 1960s.3 These demographic changes reflect the natural population growth of a predominantly Catholic country (2.36% per year since 1995)as well as the surge in internal migration as people flooded into Manila from economically stagnating rural regions in search of employment.

Manila’s demographic explosions had already overwhelmed the existing infrastructure of the city long ago. Housing, transport, and the provision of public utilities such as water and electricity, were all inadequate for the sheer number of people inhabiting the city, resulting in the proliferation of informal slum settlements, high pollution levels, traffic congestion, and a host of social ills, such as rising criminality. The government’s failure in addressing Metro Manila’s mounting socioeconomic problems since the post-war period has been attributed to party politics, bureaucratic corruption, and jurisdictional disputes, compounded by the “highly uneven distribution of financial resources among local units resulting in wide disparities in the availability and quality of public services.”5 

The private development of Makati

In the absence of sufficient government investment, enterprising developers stepped in to fill the infrastructural void, creating new communities from scratch, and in the process enriching an already wealthy ruling elite. Indeed, the family corporation Ayala Land is singlehandedly responsible for the development of Makati in the 1950s, the city that has since served as the capital’s leading business district, and premier commercial development. In this process, Ayala Land would also give impetus to the trend of mega-project real estate development in the country, which has only expanded in recent decades by another private developer, SM.

As a primate city, it goes without saying that Manila contains an immensely disproportionate share of the country’s economic production and cultural resources. This disparity is brought into even sharper focus in Makati, whose roughly 36-hectare sprawl contains 90% of the top 1000 companies operating in the country and about 80% of the headquarters of multinational corporations.6 With the economic changes in direction brought by globalization and neoliberalism, private capital has come to play an outsized role in determining patterns of urban development in Metro Manila. As a financial district, segregation is implemented through office rentals, with only very wealthy companies being able to afford a foothold in Makati. Undoubtedly, there are deep incentives to operating one’s business in Makati. These include the city’s more effective provision of services, including public utilities and, more importantly, the roads that Ayala Land themselves built, and continue to maintain, today.7

The rise of gated communities

In his examination of the corporate-led development of Makati under the Ayalas in the 1950s, Marco Garrido argues that the preference of elite consumer taste for exclusive spaces is what spurred the evolution of ‘New Makati,’ a planned enterprise predicated on the development of six new residential subdivisions: Forbes Park, Urdaneta, Dasmariñas, Bel-Air, San Lorenzo, and Magallanes. Designed in 1949 by the American-born executive of Ayala Land, Joseph McMicking, the master plan for New Makati was a response to the haphazard, and disorderly manner in which real estate development operated in post-war Manila—whereby land was ‘sold by the slice’ without regard for how each ‘slice’ affected the value of the remaining property.8 In Malate, old mansions sat next to low-cost buildings, whilst in other districts like Quiapo, urban life was often chaotic and intolerable to the wealthy because of pollution, traffic, and population density. There was also the concern for safety as Manila had become dangerous to wealthy people living in the midst of deep want.

Thus, while Malate and Ermita were two of the most desirable residential and commercial areas developed during the American period, by the 1960s they had both grown past their capacity, induced in part by demographic pressures that, although not directly felt in these areas, certainly encroached upon the residents’ sense of safety and exclusivity. By the 1960s, then, there was a definitive need for new space to accommodate residences as well as office buildings, and commercial establishments, but the introduction of a novel residential concept—that of a gated community reserved for those who could afford it—stimulated a demand for a new and exclusive type of urban living, setting a new standard of elite distinction in Manila.

Historically, Manila has always been a segregated city. During the Spanish colonial period, residential segregation was drawn along ethnic lines, with Intramuros reserved for Spanish officials, their families, and ecclesiastical orders, and the Parian/Binondo for Chinese merchants—leaving the native Tagalogs scattered across the adjacent areas.Following independence in 1946, zonal distinctions followed class divisions, with the wealthier families settling in Ermita and Malate, as Intramuros was now completely destroyed, and never rebuilt to its former glory.

The history of Makati’s development reveals the desire amongst the upper stratum of post-war Philippine society for a spatial and social order, part of a ‘modernist ethic’ that relied not only on the “imagination of planners and builders but on the preferences of elite consumers for exclusive spaces.”10 This was informed by Western concepts of space, comfort, and functionality, and was embodied in ideals such as that of American suburbia. Initially conceived as a “self-contained (bundled) and nominally integrated community, with provision for middle to upper-class housing,”11 today all six of New Makati’s subdivisions are a reserve of the elites, and expatriates—more so than of the middle class, with the average price of a home in Forbes Park costing upwards of 5 million US dollars. As land values steadily rose in the 1950s and 1960s—and as they continue to do so today, in a city where land is an increasingly scarce commodity—even those residential areas that were intended for the lower-middle class went out of their price range, and were immediately bought up by wealthier families in whose ownership they remain today.

Not what had been intended for Makati

Makati City in its entirety was never intended to be a reserve of the elites. It aimed principally to be an economically integrated district, which, given its function as a space of increasingly differentiated economic activity, could also cater to the needs of the city’s working classes, primarily those working in the service sector. Today, however, it is an increasingly polarized and socially segregated city, bringing into focus the wider geography of class inequality in Metro Manila.

McMicking’s initial vision of New Makati, in contrast to Forbes Park, was to make this real estate development more accessible to wider strata of income brackets, which would then be integrated into the rest of Makati’s existing economic landscape. However, this master plan, even if conceived and implemented by private capital, turned out to be equally subject to change and contestation from other forces, just like any other urbanization plan. While there was every intention for New Makati and Makati to be paired into a nominally integrated district, rising land values in the 1950s made the choice area of New Makati more expensive than anticipated, such that only high-income families could afford to settle there.

What Ayala offered was not just land for houses and offices, but an American lifestyle suburban development that was particularly desirable, to the point where demand outstripped supply, prompting Garrido to conclude that "postcolonial cities are dual cities not just because of global market forces, but also because of ideological currents operating through local real-estate markets."12 Segregation of the elite grew apace, and Makati today stands to highlight the divergence in the objectives and agendas of different social actors, as well as the microcosmic example of the urban arena as contested space.

FOOTNOTES

1

M.A. Caoili, The origins of Metropolitan Manila: a political and social analysis (Quezon City: New Day Publishers, 1998), 28.

2

A.A. Camba, “Private-Led Suburbanization: Capital Accumulation and Real Estate Development in Postwar Greater Manila, 1945-1960,” Philippine Social Sciences Review 63, no. 2 (2011): 11.

3

R.G. Manasan and R.G. Mercado, “Governance and Urban Development: Case Study of Metro Manila,” Discussion Paper Series No. 99-03 (Makati City: Philippine Institute for Development Studies, 1999), 11.

4

J.M. Ragrario, Urban Slum Reports: The case of Manila, Philippines (London: Development Planning Unit, University College London, 2003).

5

Manasan and Mercado 1999, 11

6

G. Shatkin, “Colonial Capital, Modernist Capital, Global Capital: The Changing Political Symbolism of Urban Space in Metro Manila, the Philippines,” Pacific Affairs 78, no. 4 (2005/2006): 590.

7

M. Garrido, “The Ideology of the Dual City: The Modernist Ethic in the Corporate Development of Makati City, Metro Manila,” International Journal of Urban and Regional Research 37, no. 1 (2013): 172.

8

Garrido 2013, 169

9

O.D. Corpuz, The Roots of the Filipino Nation, Vol. I (Quezon City: AKLAHI Foundation, 1989), 293.

10

Garrido 2013, 169

11

Garrido 2012, 168

12

Garrido 2013, 165

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