Reclamation in the Philippines: Good, bad or ugly?

(Part 1)

MANILA, Philippines — The Philippines may not be the most populated country in Southeast Asia, but its capital, Manila, is now the most densely populated city in the world.

Manila has over 42,000 inhabitants per square kilometer with the city’s population estimated at 21.3 million, according to the Philippine Statistics Authority in an October 2018 report.

It’s no wonder that many private companies – local and foreign – are offering reclamation as a viable solution to decongest the metropolis.

But Manila is just one. There are so many other dense cities in the country and in many of these places, reclamation is also actively being pursued by various proponents.

Reclamation 101

Reclamation is the process of creating new land from oceans, riverbeds, lakebeds, or other bodies of water.

It’s also happening in many parts of the world, including dense places such as Hong Kong and Singapore.

In the Philippines, there are at least 19 reclamation projects in various stages of permitting, development and implementation, according to the Philippine Reclamation Authority (PRA).

These include the Horizon Manila Reclamation, a 419- hectare joint venture project between the local government of Manila and JBros Construction Corp.

The City of Pearl Reclamation Project, a 407-hectare project is another reclamation development, also by the local government of Manila and UAA Kinming Group Development Corp.

The Manila Waterfront City Reclamation Project is another project. It is a 318-hectare reclamation venture by the local government of Manila and its private sector partner, Waterfront Manila Premier Development Corp.

Another reclamation venture is the Tieng family’s Manila Goldcoast Development Corp. (MGDC), called the Solar City, which is a 148-hectare project. It is also joint venture with the Manila local government unit.

The Sy family’s SM Prime Holdings Inc., meanwhile, is the private sector partner of the local government of Pasay for the “SM Project” which covers 360 hectares.

Another project is Davao-based businessman Dennis Uy’s Pasay Harbor City reclamation which covers 265 hectares. It is also a joint venture with the Pasay local government.

The project is being developed by Uy’s Udenna and the China Harbor Engineering Co.

There are several other reclamation projects in the pipeline not just in the city of Manila, but in other parts of the country as well including Cavite and Cebu.

Tasked to regulate reclamation is the PRA, which was formerly the Philippine Estates Authority (PEA). It acts as the primary regulatory agency of the government to assess the technical, environmental, financial, and socio-economic merits of such projects.

Proponents of reclamation projects are the local government units (LGUs) and their private sector partners.

The PRA, in advocating for reclamation, believes that adding land area to Metro Manila will address the problem of “urban sprawl” and provide agglomerative effects that will eventually boost economic growth.

“Thousands of Filipinos have benefitted from completed reclamation projects that include the Cultural Center of the Philippines, Philippine International Convention Center, the financial center area – which includes the Philippine National Bank, Government Service Insurance System, the Senate and the Department of Foreign Affairs – the Mall of Asia complex, Cavitex, the South Road Project (SRP) in Cebu and numerous ports and causeways nationwide,” PRA general manager and CEO Janilo Rubiato said.

He said LGUs bordering Manila Bay are all in need of additional space because of rapid growth.

They cannot encroach on the areas of their neighboring LGUs.

“The natural tendency, therefore, is to explore the possibility of a seaward extension within the area of the LGU’s territorial jurisdiction,” Rubiato said.

He noted that it is the waterfront that has attracted settlements and economic activity for generations all over the world.

“Most developed countries have responsibly utilized their waterfronts for coastal development, while at the same time protecting the environment and the welfare of their people,” he said.

Target

The PRA’s target, based on its 2016 annual report, is to contribute and promote economic and social progress through environmentally sustainable land reclamation of approximately 700 hectares and effective public estates development and management by 2020.

Despite trumpeting the benefits of reclamation, however, the PRA and reclamation proponents have constantly faced stumbling blocks for the different projects.

The issues are varied as they are endless – environmental issues, livelihood and disaster risks, among others.

EO 146 vs EO 74

Because of the controversies, the administration of former president Benigno Simeon Aquino III issued EO 146, a law that tightened the noose on reclamation projects.

The order designated the National Economic and Development Authority (NEDA) Board as the final approving authority on reclamation projects.

At the time, business groups such as the Makati Business Club (MBC) and the Management Association of the Philippines (MAP) lauded the measure, saying that “it is a prudent response to public apprehension over the risks posed by proposed reclamation projects, most extensively along Manila Bay.”

The EO essentially limited the PRA’s regulatory role to evaluating and recommending to the NEDA Board the approval of all proposed reclamation projects.

The business groups said “EO 146 sends an encouraging signal that the national government is more conscious of pursuing a holistic approach to progress, one that balances the need to generate government revenue streams and employment with the protection of the environment and public safety.”

However, reclamation proponents did not like the EO, as their unsolicited proposals had to be subjected to a second round of bidding.

Some players said this was the reason many reclamation projects did not progress during the Aquino administration.

Industry sources also believe that some sectors, including other property developers, were the ones who lobbied for the passage of E0 146.

“A certain property company felt threatened by the competition that reclamation developments would bring,” one source noted.

The Duterte administration, in stark contrast to the Aquino government, issued EO 74 which effectively rescinded EO 146.

Under the EO, the authority to approve reclamation projects now rests with the Office of the President and no longer with the NEDA.

The real reason behind the EO is not clear.

Officially, the Duterte administration said it would pave the way for a more streamlined process, while at the same time ensuring better scrutiny of the projects.

Whatever the reasons are, industry players welcome EO 74. They said this would speed up the process instead of going through the NEDA which takes so much time.

“It will also remove corruption at the local government level,” a chairman of a company involved in reclamation told The STAR in an interview last Feb. 18.

Dennis Uy’s reclamation project

Meanwhile, in a society that loves gossips, sources said EO 74 may have been issued to benefit the Duterte administration’s friends, including his long time pal from Davao, businessman Dennis Uy.

Some believe that Uy may be interested in doing other reclamation projects aside from the one he is already pursuing. An expedited process would thus benefit his group.

But Uy dismissed talks that he is interested in other projects. “No,” he told The STAR when asked to comment on the rumors.

“Udenna is not looking into, or considering any land reclamation project at this point other than what’s already publicly known,” Udenna head of investor relations Leo Venezuela said.

A ranking official from his group also said that Uy is simply doing business and is not afraid to looking into different opportunities in different sectors.

The official said it was unfair to question Uy’s actions just because he is from Davao.

Whatever the reasons are for changing the regulatory environment surrounding reclamation projects, industry players hope the new EO would, indeed finally, pave the way for the different developments to proceed.