The Philippines plans a vast new urban centre in central Luzon

If anyone else in the Philippines had a plan as ambitious as Clark Green City, it would probably be regarded as unrealistic and unlikely to happen. Clark Green City is a dream to create an entirely new planned city, about 130 km north-west of downtown Manila. Although near the twin cities of Angeles and Mabalacat, Clark Green City will be visually isolated from them, over a river and in the foothills. Its backers are hoping it will become one of the largest centres of business process outsourcing (BPO) and manufacturing in the Philippines outside of Manila.

Similar big ideas have gone nowhere, as investors are typically reluctant to be the first to move to an empty locale and public backers typically lack the resources to fund up front the large investments in infrastructure needed to encourage private investment.

But this is a project backed by the Bases Conversion and Development Authority (BCDA), the same body behind Bonifacio Global City (BGC), where a new second central business district of Metro Manila has sprouted up where 10 years ago there were mostly fields. Still swarming with cranes and only about half-built, BGC is already rivalling the older business district of Makati for the title of most desirable Manila business address.

The simple formula to BGC’s success, all too rare in Asian cities, is smart urban planning. The streets are a sensible grid, walkable and wide enough for taxis to stop without impeding traffic. Shopping and dining districts are attractively laid out in a park setting.

ARMY BASE: For the BPO industry, locating in BGC has been the obvious choice. About 50,000 sq metres of floor space are being built every month, according to BCDA, which developed BGC in a joint venture with private builders Ayala Land and Evergreen Holdings. That does not include the ring of nine satellite projects developed by BCDA and various private builders. Altogether BGC and its satellites occupy about 4.5 sq km of land formerly belonging to Fort Bonifacio, the national headquarters of the Philippine Army. The BCDA is a unit of the armed forces, which helps fund the military by monetising its large and underutilised land holdings, most of which are former US military bases.

BIGGER & BETTER: BCDA’s success with BGC has given it both credibility and the money to back up its talk. Arrey Perez, business development manager at BCDA, told OBG that the BGC was leading BCDA to operate more like an endowment and less like a privatisation agency. “We’re no longer interested in selling. We make more money by developing and owning the property. Prices and lease rates have gone up and up,” Perez said.

A part of the military, BCDA carries considerable weight with the state bureaucracy. For private developers having the BCDA as partner gives some security that the project will not get derailed. Perez said the BCDA’s experience with BGC has prepared it for a bigger project. “We want to incorporate the best practices that we developed here in Fort Bonifacio and duplicate what we have done, only bigger and better.”

LOCATION & PLANS: Clark Green City is a project on an entirely different scale. The first phase, which BCDA is in the process of tendering out and hopes to have completed by 2019, occupies 12.5 sq km. The overall plan for the new city would see it grow to 94.5 sq km. That in turn is part of 315-sq-km of land allocated to the BCDA in 1992 and designated for commercial development as the Clark Special Economic Zone. Metro Manila, a sprawling city of 12m people, is only twice as large. The long-term plan for Clark Green City aims for it to house 1.12m people on a territory 15% as large as Metro Manila. To achieve such figures the project would need to draw far larger numbers of BPO and manufacturing investors than any city outside Manila has managed to attract. Inhabitants are likely to come from nearby in central Luzon and northern Luzon, but the city would also need to become a magnet for young people from around the country to meet its ambitions.

The Clark Green City site is historically linked to the former Clark Air Base, which the BCDA converted into Clark International Airport soon after the US military was ordered out in 1991. But Clark Green City will be located well to the north on land that was held in reserve and left undeveloped. A BCDA subsidiary called the Clark Development Corporation controls another 20 sq km to the west of the airport which it has been parcelling out to various private projects, including airport hotels and residential country clubs and some industrial and BPO buildings. That property and the airport together comprise the Clark Freeport Zone.

PARK LIFE: With plenty of space to spread out, the BCDA is planning a city-within-a-park model, centred around an artificial canal. The broader site is bounded by the O’Donnell River, which will be a key feature of the city’s surrounding park. The project is also meant to be a demonstration of energy-efficient urban planning that encourages environmentally friendly lifestyles. “We want to promote a better quality of life and address climate change with a showcase development. The design is compact for a low-carbon footprint, and promotes walking and bicycles and mass transit,” Perez said.

A plan published in 2014 featured five districts strung along an artificial canal. The core is a central business district, which will include BPO offices, industrial parks, residential buildings and shopping. Government bodies will be located in a separate district, education and research institutions in another “innovation” district, an agricultural science district in a fourth, isolated district and an ecotourism centre set even further apart.

The BCDA can offer powerful tax and other incentives, drawing from the full offering of the Philippine Economic Zone Authority and the Board of Investments as additional powers granted to it by law. The BCDA can exempt expatriate managers from visa requirements.

LABOUR & INFRASTRUCTURE: Perez said the BCDA understands that investors will not locate in the area unless there is a proven pool of qualified labour. That is why it pushed for its first locator to be the University of the Philippines, the top state university. It already has a small Clark branch near the airport in the Clark Freeport Zone. Angeles and Mabacalat also have universities and colleges. The big test for the project will be whether its high up-front infrastructure costs as a greenfield project can be made attractive enough for investors, especially given that higher environmental standards typically mean higher up-front costs. The project needs water supply, waste-water treatment and power supply. Arnel Paciano Casanova, the president and CEO of BCDA, told a news briefing in February 2015 that the agency would soon publish terms of reference for a first portion of the project covering 200-300 ha of the first phase’s 1250-ha total. He said the first phase would cost about P59bn ($1.3bn), while the estimated cost of developing Clark Green City is $14bn.

Real estate firm Ayala Land has expressed interest in bidding on the project’s first phase, and other major builders have done so privately, according to BusinessWorld, a local newspaper. Perez said that there will be no restrictions preventing foreign-owned companies from bidding, as land will allocated by 75-year leases.


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The Report: The Philippines 2015

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