Future of infrastructure in Metro Manila
Upcoming infrastructure projects in Metro Manila and their impact on real estate.
Physical connectivity has always been a big problem in the cities of Metro Manila. Being a car-centric society, Metro Manila has one of the busiest streets in the world. According to Statista, the average daily traffic volume in the metro in 2022 was around 3.5 million vehicles, a majority of which were private. In terms of railways, Metro Manila has a total of four working railway systems, which span only 84 km in length.
TheGlobalEconomy.com measures the quality of railroad infrastructure using a point system from 1(low) - 7(high). The Philippines scored 2.4 points which is ranked 86 out of 101 countries in 2019.
On March 9, 2023, the current administration approved 123 new infrastructure projects as part of the “Build Better More” (BBM) programme, an expansion of the previous administration’s “Build, Build, Build” (BBB) initiative. BBM amounts to 9 trillion pesos worth of infrastructure projects. These programmes encompass projects mainly aimed at improving and developing the transportation sector to steer the country to the “Golden Age of Infrastructure”.
Key infrastructure projects to be built in the coming years under BBM include MRT 4, MRT 7, MRT 10, Mega Manila Subway, Makati City Subway, Pasig River Expressway, and PNR North-South Commuter Railway. Apart from these, projects outside Metro Manila, such as the North Long Haul Railway and San Mateo Railway, are also expected to decongest the metro and support further commercialisation of nearby hubs.
The investment allocated by the administration to infrastructure projects is anticipated to support the sustained recovery of the Philippine economy, which is projected to grow by 6–7% in 2023. Likewise, the continuous focus on improving the country’s infrastructure system is projected to aid the real estate market in the medium to long term.
The pandemic has changed how society moves, including adjustments in work arrangements and how we shop. Select players have released spaces, configuring to match them with the number of people they anticipate returning to the workplace. Occupiers are also more careful in shortlisting spaces for expansion/relocation, preferring proximity to infrastructure projects since the worsening traffic condition in Metro Manila has been pushing the workforce to stay at home. Connectivity, getting a boost through infrastructure improvement projects, will likely encourage manpower to return to workplaces, potentially translating into accelerated leasing volumes.
Also, sectors heavily reliant on infrastructure projects, such as industrial and logistics, will likely benefit from improved connectivity and travel time. Condominiums in the periphery or close to these infrastructure projects may also enjoy fast take-up as investors and occupiers often seek such developments. Lastly, malls and hotels may also observe heavier foot traffic, which may convert into sales once the improved infrastructure system is in place.