The capital of the Philippines is an ancient, densely populated metropolis, but what areas are now carrying the economy?
Manila: the facts
Manila is the capital of the Philippines and its second largest city, as well as the most densely populated city in the world. Time sets its density at 46,000 people per square mile (which is nearly double that of New York, the second most densely populated city) and predicts that by the year 2025, the population will have increased by 3.29mn.
It is one of the 16 cities that make up Metro Manila. World Population Review reports the population of Metro Manila as 12.8mn (15mn during the daytime including commuters). Manila city accounts for 1.78mn, around 14% of the total.
Forbes places Manila’s Gross Domestic Product per capita at $9,200. The Manila Times projects that by 2020, most of the world’s megacities will be in Asia, with a population estimation for Metro Manila of 20mn by that same year.
Manila is home to several ancient institutions. According to Traveling East, it is the home of the world’s oldest Chinatown, which was founded in the Binondo district in the 16th century. It is also the location of the oldest university in Asia: the University of Santo Tomas, founded in Sampaloc in 1611. According to Traveling East, Santo Tomas is also the largest Catholic university in the world, by student population.
The Manila economy
According to Heritage, the Philippines has the 61st freest economy according to the 2018 index, ranking it 13th among the 43 countries in the Asia-Pacific area. Reuters reports that the Philippines has an economic growth target of 7-8% for 2018 (an increase from its aim of 6.5-7.5% in 2017). One area where the country has seen considerable improvement is in the export market. The value of Filipino exports grew by 8.3% from $54bn in 2012 to $56.3bn in 2016, according Philippines Around the World.
According to Hoppler, as of July 2016, the country was projected to attract foreign investors through its growth in nine main sectors: business process outsourcing (which accounts for 11% of the country’s GDP), retail, gaming, hospitality and leisure (with total earnings from tourism in 2014 amounting to $4.84bn), real estate, manufacturing (which accounts for 55% of the country’s GDP), construction (which contributed to 40% of GDP growth in 2013), energy and automotive, and shipbuilding.
Primer confirms the role of construction in the Philippines’ growth, pointing to a growth in the sector by 11% in the final quarter of 2016. Furthermore, manufacturing is the country’s top source of economic growth, particularly regarding petroleum, food, beverages, and transport equipment. In the Metro Manila area, the sectors with the highest rates of accession are wholesale and retail trade: repair of motorcycles and motor vehicles (17.2%), administration and support services (14.4%), accommodation and food services (13.1%), and construction (9%), according to the Entrepreneur.
Manila: centre of commerce
Manila itself is the trade and finance centre of the Philippines. Not only is it the country’s first port of entry, meaning most imports and exports pass through it, but it is the headquarters for a variety of financial institutions: the Philippine National Bank, the Philippine Veterans Bank, the Development Bank of the Philippines, the Government Service Insurance System, and the Social Security System. Affordable Cebu’s Top 40 Earning Companies in the Philippines 2016 includes multiple Manila-based companies.
The third largest, by revenue, is Philippine Long-Distance Telephone Company (PLDT). With a revenue of $420mn, PLDT is the largest digital service and telecommunications company in the Philippines, according to the company website. It deals in both wireless networks, and landlines.
The second largest is Banco de Oro (BDO) Unibank. With a name meaning Bank of Gold in Spanish, it is the largest bank in the Philippines, according to its company website. As part of SM Group of Companies, it operates a variety of subsidiaries as well, from leasing to private banking, insurance to investment. It has a revenue of $480mn.
The largest company in Manila is SM Investments Corporation. With a sales revenue of $770mn, it is a holding company with ties in retail, real estate, banking, tourism and the development and management of shopping malls.
A balanced view
That being said, the Philippines does have certain economic shortcomings. According to the Manila Standard, a study run by an Indian-based company found that 65% of Philippine college graduates did not have the right skillset or training to qualify for the jobs of their choosing, leaving only one out of three Filipinos employable. The same study found the employability rate for jobs in customer service, sales, and information technology was below 25%.
Moreover, Manila is located on the Ring of Fire, an area in the Pacific Ocean rife with volcanic eruptions and earthquakes. A poll by international reinsurance company Swiss Re found that Metro Manila is the second riskiest urban area with regards to natural disasters, second only to Tokyo-Yokohama, according the Inquirer.
This City Focus article was first published in our April magazine.