Chapter 4

City and Crisis - Convolution in the Post-Colonial City

Post-war metropolitan Manila’s transformation into a veritable mega-city underscores

on the one hand its historical role as key urban axis and locus of dependent capitalist

accumulation and the hyper-magnification of the convolution and contradictions

generated by dependency, on the other. In the following sections we will sketch the

contours of convolution across demographic, spatial, ecological and social dimensions

of the urban landscape, as it unravelled in spectacular fashion after de-colonisation.

Spatial and Demographic Convolution

Far eclipsing population and primacy indices given for the urban centres in the

Philippines, Manila’s explosive post-war growth portrays the spatial convolutions of

Third World urbanisation. Its aggregate population in 1975 was more than 10 times that

of the country’s second largest city, or four times that of the combined total of the next

three major cities. The capital continues to provide “one of the most extreme cases” of

urban primacy in the world. Occupying less than 1% of the total land area, Manila holds

12% of the national population, placing it among the most primate cities in the Third

World, surpassed only by those of Argentina, Venezuela, Peru, Egypt, Senegal, Taiwan,

Hongkong, South Korea, Colombia and Iran.

Using the percentage of the national urban population residing in the principal

city, Manila’s dominance is even more prominently revealed, ranking sith among Third

World capitals. If the largest city population is contrasted to the sum of the population

2

of the next three largest cities in a country, Manila would rank third behind Hongkong

and Lima.1

Whereas longitudinal data on urbanisation level (% population in urban areas)

and tempo (urban-rural growth rate differentials) for the whole country generally

suggest a sluggish and slackening pattern (27-33.4% or 1/3 of the national total, and 3-

1.46 respectively between 1948-1975, albeit respective increments of 3.9% and 2 had

been noted in 1980), the metropolitan share of the total urban population had been

invariably substantial and accounted for a stable increase over time (30.3-37.4% during

the same period slightly tapering off to 33% in 1980, see Table 1 & 2 below). Moreover,

Manila had surpassed all other regions in terms of being the first and only are to

completely urbanise in 1970 to almost 6 million in 1980, and with a growth rate of 3.6

per annum, it is expected to double in roughly 27 years.2

Extreme conurbation and congestion of metropolitan landscape chaperons the

explosive population phenomenon. While the average national population density was

pegged at 161 persons sq km, an staggering metropolitan ratio of 9,317 persons per sq

km overshot national figures by 58 times in 1980.3 The corollary impact of conurbation

and population on urban ecology is as predictable as it is disproportionately distributed

intra-city-wise, and will be the subject of elaboration further on.

Decomposing census data on urban growth into its components (i.e. natural

increase of urban population, in-migration rates and changes related to territorial re-

classifications), a study in urban demography establishes the significant weight that net-

migrational movements exert on Manila’s incremental expansion across time. As a

proportion of metropolitan growth from 1903-1939, average net migration was 33.4%,

3

jumping to a peak of 50.7% between 1939-1960, and receding slightly to a substantial

41.9% during the intervening decade.4

More recent data5 from official quarters tend to reaffirm the axiom, estimating

the National Capital Region (= Greater Manila area) to have had the highest in-

migration rate in 1985. However, the general picture elsewhere appears to be more

complex. While about a third of the overall movements between 1965-1970 sorted under

the rural to urban category, about 26% of the moves were in fact urban to urban, nearly

24% were rural to rural, and roughly 17% urban to rural, the latter indicating the

occurrence of return migration.6

Among the important propellants behind the intermittent influx of rural labour

to the capital and inter-regional differentials in urbanisation often summoned in

demographic and the critical literature are: postwar development strategies resulting

in unbalanced capital-intensive, import-dependent and urban-biassed industrialisation;

highly skewed income and property ownership structures in the rural hinterland and

relatively high urban wage rates; accelerating

Table 1Levels & Tempo of Urbanisation

Census Years, 1903-1980

Census year Level of urbanisation* Tempo (urbanisation)**

1903 13.1 ---

1918 12.5 -0.32

1939 21.6 3.36

1948 27.0 3.09

1960 29.8 1.27

1970*** 32.9 1.45

Table 1Levels & Tempo of Urbanisation

Census Years, 1903-1980

4

1975 33.4 1.46¤

1980 37.3 3.54

*percent in urban areas. The 1963 urban definition was used for census prior to 1975.The 1970 definition was applied fin the 1975 and subsequent censuses.**difference between urban and rural growth rates.***1963 urban definition was used in both 1960 and 1970 census data for compatibility.If the 1970 definition is applied to the 1970 data, the level of urbanisation is 31.8 insteadof 32.9%.¤Initial 1975 population figures were based on the 1970 definition.Note: For the 1963 and 1970 urban definitions, see e.g. Callanta, 1988: 100-01; Pernia &Paderanga, 1980: 44-43; UNICEF, 1986: 66-67.Source: UNICEF, 1986, Table 2: 5 (cf Pernia & Paderanga, 1980: Table 1)

Table 2Metropolitan Manila: Level of urbanisation, urban population,percentage of national urban population, annual growth rate, &

population density1948-1980

Year Level*%

Urban pop.(000)

% Nationalurban pop.

Annualgrowth rate

Densitypers/sq km

1948 97.1 1,569.1 30.3 5.5 2,467.2

1960 98.1 2,426.5 30.5 3.8 3,871.8

1970 100.0 3,966.6 34.0 4.9 6,236.9

1975 100.0 4,970.0 37.4 4.6 7,814.5

1980 100.0 5,925.9 33.0 3.6 9,317.4

*level of urbanisation as defined by Pernia (see Pernia in Caoili, 1988:3) is the proportion(%) of the population living in urban places (the 1963 definition of urban used in censussurveys was redefined in 1970). Metropolitan Manila as used here embraces four citiesand thirteen municipalities, administratively integrated by Presidential Decree 824under the auspices of the Metropolitan Manila Commission in 1975, and covers an areaof 636 sq km.Note: Absolute aggregate data for national as well as rural and urban for the aboveperiods can be found in Table 3 as indicated in the source below.Sources: UNICEF (1986), Table 4: 7; Pernia & Paderanga (1980), Table 3.

5

commercialisation, land concentration and displacement of rural labour; and most

recently, dislocations as a result of massive counter-insurgency military operations in

the countryside.7

The Ecology of Convolution - Squatters in the Shanty-“Townships”

The penalties imposed by the tremendous postwar population growth and heavy in-

migration on urban ecology are most vividly reliefed in the proliferation of slum

settlements and shantytowns at the margins of the metropolitan landscape. It must be

pointed out, however, that these penalties have been unequally distributed over space,

the variations of which are, as we shall later demonstrate, essentially contingent upon

class-specific factors and manifest the growing inability of the formal urban sector to

accommodate large segments of urban and displaced rural labour.

Postwar suburban development in the metropolis summarizes and hyper-

contrasts inter-class and inter-household variances in urban living standards,

reincarnating images of “apartheid” in terms of the increasing residential segregation

of the urban elite in exclusive subdivisions with, on the one hand, living standards on

par with western counterparts, and the city poor condemned to sub-human standards,

congestion and blight in bourgeoning squatter and shanty-“townships” mostly located

on illegally occupied land, on the other.

Immediately after the war, squatter and spontaneous settlements mushroomed

in the city’s waterfront and harbour districts and in Intramuros (the original fortress

wall of the colonial city) with an estimated population of 26,000 in 1946. These early

squatters were composed mostly of rural migrants from the distant Visayas and

6

adjacent rice-growing Central Plains. In the 50s, 93,000 squatters settled on marginal

urban swamplands, along estuaries, on idle public land, or inactive streets, railroad

lines and disputed private lands, with the squatter population merely keeping in pace

with the city’s overall growth. By mid-60s their ranks had already swelled to a

staggering 700,000. In the early 1970s, slum and squatter growth captured almost 30%

(1.3 million) of the capital’s total population (3.7 million),8 a percentage which would

be carried over throughout the next decade.

Official data in 1985 approximated a squatter population of over 1.9 million for

Metropolitan Manila (28% of total metropolitan population) and over 3 million more

in other major cities of the Philippines, climbing to 2.2 and 5 million respectively two

years after. Dispersed in 415 colonies, 60% of which occupy public lands all over the city

and populated by over a fourth of the metropolitan population, 9 these settlements vary

in size and density from super-conurbations in the Tondo Foreshore-land Area, reputed

to be Southeast Asia’s largest slum, to mini-squatter communities with more scattered

occupancy patterns dotting the urban landscape.

-------------------- Map of Manila----------------------------------------------

Intra-city disparities in ecology denoted by pronounced variations in density, are

eloquently elucidated by Caoili (1988) employing 1975 statistics.10 During that year,

there were 7,500 persons per sq km in Metropolitan Manila versus the national average

of 140. Among its 17 metropolitan units (i.e. 4 cities and 13 municipalities), population

7

densities varied considerably with Manila (see Fig. 1) and Navotas having over 37,000

respectively versus Muntinlupa with the lowest density of 1,968. Within the city of

Manila, the density among the districts in 1970 ranged from the highest estimates at

over 50,000 to the lowest at 98. The Tondo Foreshore-land Area alone had a population

of 160,000, which was 37% of the Tondo district’s share and about 12% of the city’s total.

Density there was 120,000 per sq km, more than three times the city’s average in 1970.

Teasing out the class dimension of density variances, another comparison reported:11

“Tondo, the biggest slum in Southeast Asia, had a density of 57,745

inhabitants per sq km in 1975. While the average for Metropolitan Manila

was “only” 9,316, more than 6 times as dense. The new elite parts of the city

like Forbes Park and Dasmarinas village (with average plots of 2,500 sq m)

on the other hand, have densities of about 2,000 inhabitants per sq km or less

(author’s observation at 1985 (sic.)). This means a ratio of almost 30 to 1

population density between the richest and poorest parts of the city.”

The Urban Dilemma of Dependency- Travails of the Urbanisation-Industrialisation Equation

Regional Distortions: A Spatial Satire

Postwar town and country development, following the twisting dynamics of

dependency and industrialisation strategies gone haywire, are spatially satirised in

terms of pervasive and acute inter-regional disequilibrium and super-agglomeration of

economic resources in the metropolitan capital.

Both in the degree and magnitude of physical and spatial concentration of

industrial, financial, commercial capital and social infra-structure, post-colonial Manila

8

would undoubtedly qualify as the country’s “capital city of capital.”

In terms of population, total output (gross regional domestic product, GRDP)

and per capita output per region in 1975, Metro-Manila with 12.3% of the national

population contributed 35% of total output. Its per capita output was the highest among

the 12 regions,, beating the national average almost thrice. With token deviation, this

record would be vindicated with stability well into the 80s.12

Manufacturing, a key factor in the relatively high metropolitan GRDP, accounted

for 37.6% of total city output in 1974. Cross-regional comparisons (Pernia & Paderanga,

1980) indulging data on manufacturing establishments, employment and value added

for 1956 and 1974, fortify Manila and its adjoining regions’ reputation as solo

stronghold and prime locus of industrial capital and wage labour. Over this long

interval, spanning across the entire ISI into the infant years of the EOI period, relative

shares in economic activity remained roughly stable, with the combined regions of

Metro-Manila and Southern Tagalog claiming the lion’s share (varying within the range

of 60-70% of national total at given intervals on all three counts) and the more urbanised

category coming a far second. Notably, metropolitan output per capita was more than

twice the highest in the more urbanised cluster, and four times that of the lowest

registered output in the less urbanised bracket. (See Tables 3 and 4 below)

Detailed sectoral gross value added (GVA) breakdowns in 1974, similarly

communicated the tenor of titanism couched in the same jargon of spatial and physical

over-concentration of capital and wage labour in other secondary and tertiary industries

(Caoili, 1988), where metropolitan share of the national total - in construction (39%),

electricity, gas and water (72%), transport, communication and storage (56%), commerce

9

(39%), and services (56%) - overshadowed all other regions. In terms of large

establishments and the corresponding wage-employment they provided for selected

sectors in the country, the city of Manila and the surrounding Rizal province claimed

over 3/5 (66%) of the total number of firms in construction (with 20 employees or

more), engaging in concert 81% of the nation’s total workforce in that sector. Parallel

patterns existed in the tertiary sectors.13

In similar vein, Manila functions as a prime powerhouse of financial capital and

key point in the import-export nexus and international trade. In 1971, manila had 298

commercial banks, 53 savings and mortgage banks, and 10 development banks,

amounting to 44%, 93% and 11% respectively, of the total number of such

establishments in the whole country. A study by the First National City Bank estimated

that between 1968-1971, Greater Manila accounted for 68% of the total bank deposit

liabilities in the Philippines.14

While total export tonnage being handled in the capital had dramatically declined

(although still substantial) to 20% (in 1970-76) after the war in favour of secondary cities,

Manila’s 85% control over all incoming imports displays the city’s immense dominance

in commerce.15 Broadly, the colossal concentration of capital was strikingly spelled out

by the fact that between 1970-79, the National Capital Region captured the cumulative

total of 57% of aggregate paid in capital of all business enterprises in the country.16

Ultimately, regional differentials in economic development were clearly mirrored

by the disproportionate spatial dispersion of physical and social infra-structure. Luzon

the macro-region of Metro-Manila, had almost half of the total road length and number

of airports in 1975. Household access to electricity, potable water and toilets were

10

generally 10% higher in Luzon than the average of 26.5, 24.4 and 21.9% respectively in

the other macro-regions, for the same year. Health and educational facilities were also

heavily concentrated in Luzon, specially in the metropolitan capital, where 23% of the

country’s 749 colleges and universities (19 of 50 universities) were located. The

contiguous regions of Metro-Manila and Southern Tagalog contained 75% of all

hospitals in the Philippines.17

Table 3Gross Regional Product (GRDP) and Value Added in

Manufacturing (VAM) per capita, and share of VAM in GRDP,1974

GRDP/capita(pesos)

VAM/capita Share of VAM in GRDP (%)

Metro-Manila 6,600 2,475 37.6

More Urbanised

Central Luzon 1,780 509 29.1

Southern Luzon 2,384 620 25.6

Western Visayas 2,677 678 25.5

Central Visayas 2,016 366 17.9

Less Urbanised

Ilocos 1,431 152 10.6

Bicol 1,187 165 13.8

Eastern Visayas 1,304 121 9.2

Table 3Gross Regional Product (GRDP) and Value Added in

Manufacturing (VAM) per capita, and share of VAM in GRDP,1974

11

Rural

Cagayan 1,325 78 5.9

NorthernMindanao

1,775 249 14.1

WesternMindanao

1,472 116 7.9

Eastern Mindanao 1,426 196 13.5

SouthernMindanao

2,755 403 14.5

Philippines 2,418 492 24.8

Note: The above categorisation has been drawn from Pernia & Paderanga for analyticalconvenience according to the criteria for urban classification defined by the NationalCensus and Statistics Office (NCSO) in 1963 and revised in 1970.Source: Pernia & Paderanga (1980), Table 8: 13.

The precipitous infra-structural build-up following in the wake of the industrialisation

drive in the 50s-70s in the Capital Region can also be inferred from inter-regional figures

on allocation of infra-structural expenditures, where the Capital Region registered

respectively 56% of total investments in public infra-structures (postal services,

waterworks, highways, schools and hospitals) for fiscal years 1959-61 and 1971-73.18

Table 4Indicators of Regional Concentration of Manufacturing (M), 1956 and 1974

% share of M % share of M % share of M firms employment real value added

1956 1974 1956 1974 1956 1974

% share of M % share of M % share of M firms employment real value added

12

Metro-Manila &SouthernLuzon*

70.8 67.5 64.5 67.5 64.5 62.0

Moreurbanised

CentralLuzon

8.4 8.8 6.0 8.0 8.9 8.4

WesternVisayas

4.5 3.7 10.4 6.6 15.1 14.2

CentralVisayas

5.9 6.0 5.4 4.4 4.1 5.3

Lessurbanised

Ilocos 1.9 1.7 2.0 1.3 1.3 0.8

Bicol 1.1 2.0 1.3 0.6 0.6 0.4

EasternVisayas

1.3 0.4 0.9 0.3 0.5 0.5

Rural

Cagayan 0.7 1.7 -– -- 0.1 0.5

NorthernMindanao

1.8 2.4 4.2 2.8 1.9 2.1

WesternMindanao

0.6 1.0 0.9 0.9 0.3 0.4

EasternMindanao

1.3 0.4 0.6 1.3 0.7 1.9

% share of M % share of M % share of M firms employment real value added

13

SouthernMindanao

2.5 3.3 2.3 4.3 1.0 3.7

Phil.(100%)

1,833 2,843 150,878 450,200 2,330** 10,041**

Note: % figures rounded; *Data not available separately for Metropolitan Manila andSouthern Luzon; **In million pesos at constant 1972 prices.Source: Moran (1978, Table 2.6b: 47) based on: BCS, Annual Survey of Manufactures,1956; NCSO, Annual Survey of Establishments, 1974; and NEDA, Philippine StatisticalYearbook, 1977. Derived from Pernia & Paderanga (1980), Table 7: 12.

The parody of regional distortions suggested by the dazzling titan-ism of metropolitan

economy is replayed with even greater pathos within the very walls of this economic

giant. Indeed, gross disparities in income distribution, high unemployment and

underemployment rates, vast poverty incidence dramatise the exacting social costs and

bogus features of economic titan-ism. Features which in turn typify contradictions

arising from the previously noted urbanisation-industrialisation process and the secular

incapacity of the formal urban economy to sustain phenomenal postwar population

growth.

City and Circuits: “Atrophy” and “Hypertrophy”

Analogically, “upper (or formal) circuit atrophy” and “lower (informal) circuit

hypertrophy” portray the long-term impact of industrialisation on the postwar urban

economy, labour and occupational structures. “Atrophy,” or the constricted nature of

modern formal employment generation - imputed earlier by critics on the structural

idiosyncrasies of capital-intensive, import-dependent and external market biassed

14

industrialisation - has been most spatially condensed in Metropolitan Manila. As the

uncontested industrial nucleus of the country, it is expected where one finds the most

compulsive “upper circuit” unemployment and labour dislocation.

A graphic résumé of this phenomenon is furnished by the diagram (Figure 2)

below, illustrating the relationship between sustained inertia in aggregate

manufacturing output and employment (A & C) and the general pattern of

metropolitan unemployment (B) over a ten-year period. In the late 70s and early 80s,

the adverse effects of world recession coinciding ill with a major national economic

crisis redounded automatically and most savagely on metropolitan economy and

labour. The steep decline in industrial output critically intersecting with inflationary

costs of imported industrial inputs obviously had immediate repercussions on urban

labour and employment given the substantial concentration of industrial activity in the

metropolis.

While this vulnerability is suggested by the scissors relationship between

powerfully decelerating total manufacturing output and metropolitan unemployment

rates accelerating beyond yearly national and regional averages (A & B),19 the lethargic

trend imparted by the stable 10-12% annual contribution of manufacturing to total

employment (C) manifests the sectoral paralysis and limitations imposed by dependent

industrialisation on “upper circuit” employment generation. In fact, manufacturing

employment figures have statically congealed around this magic range since 1945,

regardless of the intervening shifts in industrialisation strategies.

Whereas above standard unemployment maladies have traditionally plagued the

post-colonial city, the ferocity and magnitude of industrial labour displacements in the

15

critical 80s had been biblical as one report confides: “Out of 49,036 lay-offs recorded

nationwide from January to September 1980, 30,86" or two-thirds were in the

metropolitan capital.20

With employment options in industry stymied, a large portion of the growing

postwar urban population has increasingly been assimilated into tertiary enterprises

and informal “lower circuit” activities - broadly characterised by self-employment,

unpaid family labour, paltry wages below the official minimum and the absence of any

social security protection - or join the traffic of labour intermittently commuting

between circuits. Although this trend had previously been noted in the prewar years,

it started to take “hypertrophic” proportions in the post-colonial era.

Thus in contra-distinction to the gradual decline in manufacturing (12.3-9.5%)

and agricultural employment (52-49%) between 1975-1985, the tertiary sector hiked its

share of total employment from 31-37% over the 15-year interval.21

Given the paucity of reliable and accurate dis-aggregated data on metropolitan

equivalents, we may here, albeit with caution, extrapolate replication of the recorded

general pattern of constriction-expansion nationwide, considering the veteran over-

concentration of the country’s secondary and tertiary sectoral employment in Manila.

Microcosmic versions of this trend are provided by a series of urban community

studies in the 70s. In the densely populated slum sprawl of the Tondo Foreshore Area

(TFA), the most frequented area for urban research, a cross-sectional look at the

occupational structure in 1977 showed that almost two-thirds were employed in the

tertiary sector. A third of those who did not have regular salaried employment were

self-employed in “lower circuit” small-scale trade and petty commodity production.22

16

17

The Social and Class Articulation of Convolution

Distended social and class aberrations deliver the clinching finale in the dependency

drama of structural and sectoral distortions, parading on review the select cast of

victims and victors of underdevelopment. Distortions which have socially polarised

during the post-colonial period into reinforced affluence for an exclusive minority and

conversely protracted poverty for an ever expanding legion of the underprivileged. At

the core of postwar poverty lies the selective and skewed state of property relations in

the Philippines. A relation further aggravated by eroding wage and income levels, and

inflationary living costs. Spiralling class differentials vis-a-vis access, appropriation and

control over material resources find their most dramatic expression in the sphere of

consumption and the increasingly subverted ability of the rural and urban labouring

classes to defray the market cost of social reproduction.

Distended Differentials: Wage, Property Relations and the Poverty Syndrome

To what extent the capacity of labour to meet the basic minimum of social reproduction

has been undermined in the recent decades, can be deduced from absolute and relative

quantification of poverty. Absolute poverty studies, although departing from diverging

18

poverty line estimates, point, by and large, at the alarming upsurge of poverty

incidence in the last two decades. Poverty incidence is defined here as the head count

ratio of the population falling below the poverty threshold or the cut-off point below

which incomes cannot buy for the family recommended nutritional and other basic

requirements. Accordingly, the pauperised cadre falling anywhere between 30 to 56%

of total families nationwide in 1971 swelled from 30% to 64.3% in 1975. The spirit of this

distressing trend was to be rekindled by official data in 1985, counting the poverty

incidence at more or less 60%.23

While the poverty scenario had been most extensive in the least developed rural

regions it had increasingly become most condensed in the urban environs of Metro-

Manila, as indicated by the precipitous jump of the capital’s impoverished population

from somewhere between 9-14% in 1971 to 31-36% in 1975, eventually shifting to

overdrive at 44% in 1985.24

The progressive economic liquidation of a substantial segment of the labouring

classes since the 70s is underscored by the rapid erosion of real wage and income levels

in the face of sustained inflationary spurts in living costs. Moreover, deliberate wage

freezing policies to hold down already deflating wage levels as part of the official

strategy to seduce foreign corporate investments by the Marcos regime during the EOI

heydays of the 70s, doubly jeopardised labour’s position. With steep rises in consumer

prices by decade’s end (100-305 rise in the consumer price index between 1970-79!),

double-digit drops in real wages (25-30%, 1970-1980) and with Southeast Asia’s

reputedly lowest wages, the fate of many rural and urban households was virtually

sealed to bankruptcy in the 80s.25

19

Thus, in 1984, the highest legislated minimum monthly wages, inclusive of

supplements for both non-agricultural workers in Metro-Manila ($76) and agricultural

workers ($62) even failed to coincide with the most conservatively drawn poverty line

at $77.31 per month at current prices for a family of six.26

Decoding absolute poverty trends in the relative terminology of income

distribution and Gini-coefficients essentially filter out the class nomenclature of the

poverty syndrome. Vulgar inequalities in the control and appropriation of social

product in the Philippines are summarized in an Asian Development Bank study on

Philippine income distribution patterns between 1956-1981. The study detailed the

omnipresence of uniformly high Gini-coefficients27 over time and the deterioration of

income inequalities since 1961, revealed by quantile share comparisons of low and high

income earners. During the 25-year interval, the share of the lowest quantile declined

from about 5% to less than 3%, while that of the top quantile increased to nearly 60%.

Zooming in on the urban extension of income inequality, a 1975 study of intra-

Manila income pattern drew an even more appalling picture. While the richest 10% of

families nationwide received an annual average income of 26,863 pesos that year, 19

times as much as the average of the poorest 10% households (1,425 pesos/yr), this

already huge discrepancy was to pale in comparison with that of the capital city’s score,

where the top 10% (52,720 pesos) income average exceeded by over 20 times the bottom

10% (2,376 pesos).

Income disparities tended to be most acute in the ghettos of the Tondo Foreshore

Area, the locus of the city’s largest urban poor community, where median family

incomes registered a little more than half of the 1975 metropolitan level. Overall, the

20

study concluded that the “lowest 70% of MMA (Metropolitan Manila Area) families had

average incomes below the poverty line.”

Table 5Legislated minimum money and real daily wage rates*

Metro-Manila Agriculture highest minimum ** lowest minimum***

Money wage Real wage¤ Money wage Real wage¤

1972 8.00 16.25 4.75 10.34

1974 8.80 11.59 5.57 10.34

1976 12.09 13.94 8.03 9.48

1978 15.74 15.74 11.40 11.40

1980 27.39 19.36 17.03 12.31

1982 31.82 18.06 19.65 11.38

1984 48.47 16.63 29.92 10.48

1986 (April) 57.08 15.54 35.67 10.07

Notes: *Weighted average by duration of minimum wage rates legislated during theyear. The Table represents only the highest and lowest-paying of the 12 differentminimum wage categories. **Minimum wage payable by a large firm (capitalisation of> 1 million pesos) in Metro-Manila. ***Minimum wage payable by a small-scaleemployer in non-plantation agriculture. ¤Money wage deflated by the Consumer PriceIndex (1978 = 100)Source: World Bank Country Study, Philippines: A Framework for Economic Recovery(1987), Table 11.4: 153.

Table 6Quantile share of low & high income earners and Gini-

coefficients, Philippines, 1956-1981

Year Share of bottom20%

Share of top 20% Gini-coefficient

1956 4.9 54.8 .4540

1961 4.2 56.2 .4644

1965 3.6 55.4 .4632

Table 6Quantile share of low & high income earners and Gini-

coefficients, Philippines, 1956-1981

21

1971 3.9 55.0 .4536

1975 5.5 53.3 .4220

1981 (III) 2.8 59.4 .5032

Note: 1981 figures were taken from third quarter data.Source: J M D Fowling & D Soo, “Income Distribution and Economic Growth,” StaffPaper No 15, Asian Development Bank (ADB), undated. Culled from Callanta, R (1988):19-20.

Tragicomically, the most bizarre mise en scene of class inequality can be found in the

metropolis comparatively one of the wealthiest regions in the country. Recent data in

the mid and late 80s still stamp Metro-Manila conditions as one of poverty’s worst case

scenarios on the Islands.28

Distended Distortions: Collective Consumption Correlates

The leitmotif of social inequity is most visibly reproduced by the patent incongruence

marking urban land and shelter markets. One which monuments the debilitating

constraints on urban collective consumption and ability of the urban population to

participate in the formal economy on account of skewed income and property relations.

While land and shelter problems are as much rural as they are urban issues, they do

take on other functionally specific meanings in the city. As one author noted, urban

housing connotes functions other than shelter:29

“It serves as the base of access to centrally located resources. Where a family

lives relative to markets, factories and commercial districts determine its

22

ability to participate and partake of the urban economy ... Unlike in the

countryside where land is vital for its fertility, in urban centres land is vital

for its locational specificity. However, in both town and country, unequal

access to land (and by extension to shelter) implies unequal incomes.”

Inequality is also clearly stated in the substandard state of urban services available to

a significant slice of the urban population.

The “Helter Skelter” State of Shelter

Phenomenal postwar proliferation of slum and squatter settlements on marginal public

and private urban lands bears witness to the haphazard state of urban shelter.

According to official surveys conducted in the mid- and late 80s, there were 1.9 million

squatters in the capital (one-third of city population) and 3.3 million in other cities

living in 415 shanty and hovel enclaves under extremely overcrowded substandard

structures and dismal environmental conditions.

With a yearly increase in squatting at 11%, it is estimated that by the end of the

millennium more than half of metropolitan population will be squatters. Quantum

escalation of the slum and squatter phenomenon had been noted between the 60s and

80s, when the proportion of makeshift barong-barong structures in Metro-Manila shot

up by 200% from a little less than 15,000 to a staggering 49,000 even as corresponding

figures for other regions declined during the same period.

With an average annual rise in city population by over 4% since the 70s and the

city’s low income households mounting by perhaps 12% (upsetting the 2.4% yearly

23

standard output of new dwelling units), the crevice between annual supply backlog and

new demand in the urban shelter stock has indeed prominently widened in the last

decades.30

The nightmarish metropolitan housing situation has thus compelled official

housing efforts to focus on Manila. According to the recent official five-year plan (1987-

1992), Manila accounted for 17% of the total housing need of 3.4 million units(576,000

units) or 36% of total urban requirements targeted for the whole period. However, the

lacklustre performance of previous state housing delivery programs raises serious

doubts about the ability o'f the incumbent plan to hit its declared targets.

Beyond that, the generally low subsidisation of state housing, posting a mere

1.9% and 2.7% of the national budget outlay for previous and present periods, leaves

the urban majority practically at the mercy of ransom double-digit rent rises and

amortisation rates, inflationary building costs and spiralling land prices ravaging the

open housing markets. Moreover, the proclivity of commercial housing construction to

cater to an exclusive high income clientele had been noted in the past. As Keyes (1980),

examining the shelter situation in the 70s, observed:

“It is estimated that only 12% of Manila households can afford open market

housing. Yet 80% of all construction activity, carried out by more than 3,000

private construction firms, serve only this narrow market...”31

Expelled from the open housing market by affordability constraints and mediocre state

subsidisation, the urban underprivileged have addressed the shelter problem through

informal housing construction. And judging from figures given by the 1980 census on

housing, the contribution of the informal housing sector, according to an official

24

admission, had in fact been substantial, defeating by a wide margin the combined

performance of both government and private formal sectors. As such, of the total

housing output of 675,000 units between 1976-1980 only 15% originated from the

government and private formal sectors. Informal housing activities accounted for

virtually all rural and a significant portion of urban housing delivered among others in

the form of makeshift and transitional structures by urban squatters.32

“Land Poverty Amid Land Plenty”

Squatter and slum settlements are a natural response to an unbalanced urban land

market. A World Bank study comparing land values at the urban periphery to per

capita GNP in selected developing countries, ranked the Philippines among one of the

most incongruous cases. While other countries offered 100 sq m home-sites at less than

one year’s per capita GNP and even half that amount, land for home-sites in the

Philippines was estimated at 246% per capita GNP. Further, around Manila, the inverse

relationship between land costs and distance to the urban core frequently does not

apply.

In 1977, land development was judged the highest growth “industry,” returning

an average yield of 43%. With increments in wages constituting only a fraction of

increases in land values, the pressures on low income families to squat or otherwise

house themselves illegally are self-evident.33

Essentially, contemporary housing problems are rooted in the acute lopsidedness

of urban landownership structures, which favour a few big landlords and institutions.

This pattern evolved during the Spanish colonial regime, when vast tracts of traditional

25

communal lands in the present Metro-Manila area were awarded to single families and

institutions and turned into private estates. American colonialism did little to disturb

landlord property relations. Many of these are now prime urban lands, some of which

lie in gestation as urban landlords speculate on their holdings. This kind of land

hoarding has consequently limited the supply of land for residential purposes and

generated spiralling land prices.34

Once trade and industrial incentives required of the immediate postwar

industrialisation drive in the 50s were in place, urban centres began to expand into what

were once agricultural estates held by the powerful landed elite, who naturally became

prominent in the urban real estate business. They wielded monopolistic sway over the

growing land market because of their land-holdings then at the edge of the traditional

cities were locationally unique. Ownership concentration allowed for the withdrawal

of land from development, making it difficult for rural to urban migrants to access and

afford residential land. Urban residents found it hard to compete with commercial and

industrial users, who were in a better position to pay for monopoly rents demanded by

landlords.

Not surprisingly, urban squatting and housing became a problem of epic

proportions only in the postwar period when rapid urbanisation began in response to

the spatial bias of the industrial strategy approach. However, urban growth cannot be

entirely blamed for this, rather, it was the inability of property rights to develop in a

manner compatible with urban expansion that fuelled the problem. The historical

necessity that the dissolution of feudal property, both rural and urban, precede

industrial development remains unfulfilled.

26

While ownership concentration of urban lands co of urban lands continues, the

housing problem defined in terms of unequal access will prevail. As of 1983, close to

40% of total the total Metro-Manila land area remain undeveloped and lie close to

existing commercial and industrial centres. And while 65% of total idle lands in 1988

were privately owned, 70% of metropolitan homeowners did not possess any legal title

to land. The cost of housing, significantly determined by the price of land, will remain

high and many will continue to be denied access to the urban economy.35

The conflict for urban space will likely intensify as sections of the urban poor

continue to occupy hoarded land, a conflict augured by a leading erudite on Third

World urbanisation 27 years ago:36

“The land problem in the Philippines is not of scarcity but of refusal to sell.

Much of the acreage in the urban and urbanising districts are frozen in the

hands of owners who have no present intention of developing it. Neither the

magnetism of demand nor the temptation of profit can persuade the larger

landholders to make use of their holdings or sell to others who will. The

situation is most acute in the environs of Manila, where land poverty exists

amid land plenty ... Because of high land costs, low income families pay the

price of slumlife, overcrowding and ransom rents - or they simply take the

law into their own hands and squat on private and public lands.”

Urban Service: Sorrows of Service

As the ranks of the economically insolvent urban classes swell and demographic

pressures beef up the urban population, demand on state delivery of basic services

27

critically mounts. However, the contradictions of unequal income and property

relations discussed above are themselves “alter-egoed” in the sorry state of urban

services.

Even though service availability is as a rule generally high in the metropolis,

intra-city disparities in service accessibility are extremely pronounced. In the congested

Tondo Foreshore area, for example, only 40% of households had access to an adequate

water supply, in sharp contrast to the otherwise extensive 82% city-wide household

coverage by the public waterworks system in the mid-70s. Whereas a low 12% of city

population availed of sewerage services, Tondo residents were found to have had

virtually no sanitary sewers save for a 42-inch sewer outfall traversing the area and

three 36-inch pipelines for storm drainage.

Makati, home of the suburban elite and middle-class households where 82% of

homes enjoyed flush/water-sealed toilets in the early 70s, stood in diametrical

opposition to Tondo. There, 40% generally disposed of human waste through the “wrap

and throw” method.

Some of the effects of the uneven distribution of public services may be seen in

the incidence of disease in Metro-Manila. In 1975, a comparison of mortality and

morbidity data for non-squatter and squatter areas in the Tondo area revealed the

leading causes of death - pneumonia, tuberculosis, diseases of the heart, vascular system

and early infancy, malignant neoplasms, gastroenteritis and colitis, and accidents - were

those commonly associated with urban poverty conditions (malnutrition, congestion,

poor hygiene and sanitation). On all counts the mortality rate in the non-squatter area

was surpassed by those in the squatter colonies. For tuberculosis alone, respective ratios

28

1.Keyes, 1980: 1; Caoili, op cit: 69. Pernia, Paderanga & Hermoso (1983) invoking World Bank1980 estimates, approximate the primacy index or the ratio of population of the largest city vis-a-vis the combined population of the three next largest cities for Metro-Manila to 3.7. See Perniaet al (1983), Table 2.3: 24.

2.Figures vary conspicuously. Some authors have employed a 5% growth rate in their estimates,e.g. Callanta puts the city’s population at 8.2 and 10 million respectively in 1982-85, while otherslike Grinsven gauge metropolitan population at a more modest 6.9 million in 1987. See callanta,1988: 104; van Grinsven, 1988: 8.

3.Computed from figures given in Table 2.4, Population Density by Region (1980, 1985) inMedium-Term Philippine Development Plan, 1987-1992: 55.

4.Caoili, op cit: 74, using Pernia, 1977: 56-ff.

5.See NEDA: 1985 Chart 8-07 & Table 8-07: 198-99; consult also Medium-Term PhilippineDevelopment Plan 1987-1992, Table 2.6: 55.

6.Derived from Abad, 1981: 132.

7.For insightful discussions see e.g. Ruland, 1985:1; Bello, op cit; Canlas, 1988; Callanta, op cit.Data on forced migrations and displacements as a result of growing militarisation in certain ruralareas can be found in van Grinsven, 1988: 31; Amawim, July-Spet. 1987: 6.

8.Meijer, 1986: 34-35. Other authors invoking figures from UN estimates, put the 1968 squatterpopulation at a much higher 1.1 million. Cf Keyes, 1980: 6.

9.See the 1985 Joint Survey on slum dweller population tabulations for Metropolitan Manila andother major urban centres appearing in AMAWIM Vol 1 No 3 (1987). See also Makil (1983) asquoted in van Grinsven, op cit: 10; Meijer, op cit: 37.

10.Caoili, op cit: 78.

11.Note that Meijer, referring to Oosterhout (1985): 13, uses estimates for the whole Tondodistrict to which the Tondo Foreshore-land Area is but a sub-district. (Cf Caoili, ibid: 68).Discrepancies between Caoili and Oosterhout’s 1975 figures on average density for Metropolitan

for squatter and non-squatter were 1:122 versus 1:14. In 1988, the capital city registered

the highest total death and infant mortality rates nationwide.37

Notes

29

Manila

12.Derived from Caoili, op cit: 77. Relevant figures are presented in Annex Table III-E. UsingWorld Bank data (Table 12.3 GRDP at constant 1972 prices, 1975-85, World Bank (1987): 156),this author calculated metropolitan GRDP percentage shares bordering at plus-minus 30% perannum from mid-1970 to mid-1980, revealing a stable trend. Computations made from the mostrecent figures available reaffirmed the rule. With 12.8% (7.7 million) of the country’s predictedtotal population (60 million) in 1988, the National Capital Region (Metro-Manila) generated 31%(31.3 million pesos) of total GRDP (101.7 million) pesos. Its GRDP per capita that year (4,143pesos) overshot the national mark (1,733 pesos) twice. For details on the regional estimate, seeIBON Facts and Figures, Vol XII, No 21 (1989): centrefold.

13.Caoili, ibid: 69-70. Other authors echo similar observations: Oosterhout (1985: 134) notedthat 66% of companies with more than 500 employees were located in the capital in 1975. FarEastern Economic Review (1976-03-05: 31) even mentions a concentration of 80% of thenation’s industries located in and around the metropolis. Einsiedal and Ranjo (1985) of theMetropolitan Manila Commission (MMC) reported a high figure of 88% of the nation’s industryand business situated in the capital (quoted in Meijer, op cit: 31).

14.Lopez, 1975: 23-24.

15.Oosterhout, 1985 quoted in Meijer, op cit: 31-32.

16.See Pernia et al, 1983, Table 6: 263.

17.Meijer, op cit: 32; Caoili, op cit: 74.

18.Pernia et al, et al, 1983, op cit, Table 4: 262.

19.For national and regional estimates see NEDA, 1985 Table 6-02: 127.

20.Villegas, op cit: 138; Lopez, 1975: 24; Callanta, 1988: 119.

21.WB, op cit, Table i.3: 74.

22.Sembrano, 1977: 52-56.

23.For the 1970-75 figures, see Callanta, op cit: 7; 1985 estimates can be found in the MediumTerm Philippine Development Plan, 1987-92, Table 2.1: 55 & Table 9.1: 257.

24.Conservative and radical estimates account for the d iscrepancies. See estimates of Tan,World Bank for 1971-75 in Callanta, op cit, Table 5: 11, and Medium Term ... ibid, for 1985.

25.Lichauco, 1981: 82; Jose, op cit: 237; Broad, op cit: 119.

26.Canlas, op cit: 2-3.

30

27.A common yardstick in gauging the degree of income inequality, introduced by the Italianstatistician, C. Gini in 1912. The Gini ratio ranges from 0.0 (absolute inequality) to 1.0 (absoluteequality). For the Gini ratio formula, see NEDA, 1985: 157.

28.Caoili, op cit: 83-84; Meijer, op cit: 37.

29.Solon, 1988: 160.

30.Philippine Agenda, 1988: 2; IBON, 1988: 7 (24/5?); Angeles, 1985: 6: Keyes, 1980: 4.

31.Keyes, 1980: 4.

32.Medium Term Plan, 1987: 242.

33.Keyes, op cit: 15.

34.Caoili, op cit: 94.

35.Historical passages on the evolution of landed property were mainly culled from Caoili, ibid:94; Solon, op cit 118-19. On postwar urban land use patterns refer to Keyes, 1975 (32b): 406.:

36.Charles Abrams (1964) quoted in Keyes, 1975 (32b): 406.

37.Caoili, op cit: 79-99; IBON, op cit: centrefold.