Manila Bay reclamation projects: Pros & Cons


By E.V. Rieza

Discussions over the advantages and disadvantages of the Manila Bay reclamation projects have recently reached Congress with varied opinions. One practical view is that there is an urgent need to craft a fiscal framework for reclamation projects to raise revenues that could, relatedly, fund the country’s social housing, foremost is the acquisition of lands by the National Housing Authority. Republic Act 7279 provides that at least 50 percent of the income of the Philippine Reclamation Authority should be used for this, and should be included in that proposed fiscal framework.

This will help fund President Marcos’ dream of an affordable housing program. 

In August, the President suspended land reclamation projects in Manila Bay to assess their environmental and social impact. Following this, the Senate and the House of Representatives started conducting their respective hearings on the state of government reclamations, specifically on the 14 projects which were the subject of the suspension order.

In the Senate, Senator Cynthia Villar has raised the spectre of a calamity out of the Manila Bay reclamation projects, foremost that Metro Manila could “slowly sink” like Jakarta in Indonesia. The PNA in its October 24 report quoted the lawmaker’s warning, issued during the public hearing of the Committee on Environment, Natural Resources and Climate Change, which she chairs.

With the rising sea level and reclamation projects in Manila Bay, what happened to Jakarta is a possibility in the National Capital Region, Villar said. In 2019, President Joko Widodo announced that a new city in Borneo, which may be called Nusantara (archipelago), will replace Jakarta as Indonesia’s capital, home to about 10 million people. Jakarta has been reported sinking at an alarming rate due to over-extraction of groundwater.

Reclamation as revenue source enough to pay PH’s debts sans raising taxes

The lower house’s hearings on the reclamation projects, primarily initiated by the committee on ways and means has estimated that “at least P23 trillion in land sales” will result out of the reclamation projects in Manila Bay, “enough to retire the country’s debt.”

Reclamation as a revenue source for the national government has not yet been maximized, says Congressman Joey Salceda who chairs the panel, adding that the President’s order “is a great opportunity to get reclamation right and actually gain its promised benefits.”

If pursued wisely, the projects can potentially generate as much as P432 billion in national land taxes, including VAT, capital gains tax, and documentary stamp taxes. “It’s time we have a serious conversation about reclamation”, he said.

The fiscal reclamation framework being mulled by the tax panel will include a rule that 20 % of reclaimed land should be used for low-cost housing, “or some sort of alternative compliance”, gleaning on the Singapore example.

The fiscal framework will also include some adjustment to the dividend remittance policy of the PRA, granting it relief from the requirement of the Dividend Law that the GOCC should remit 50% of its net earnings to the Treasury.

“The new fiscal framework could fund President Marcos’s ambitions for decent, affordable, and dignified housing in the country”, adding that there is a serious need to “elevate the conversation on reclamation projects.”

“I think it’s time we have a serious conversation about reclamation. Twenty percent of Tokyo Bay is reclaimed. Twenty-Seven percent of Singapore’s land is reclaimed. The largest flood control project ever undertaken in the whole history of mankind, in the Netherlands, involved the creation of an entirely new province out of reclaimed land,” he explained.

Salceda said “reclamation can be flood control. It can be an ecological improvement, especially if it filters water quality in Manila Bay. And, as was made evident in our hearing, it is also an efficient source of tax revenues. But we need a science-based, data-driven conversation on this issue.”

Higher cost for shipping lines

Industry officials on the other hand, said the reclamation projects in Manila Bay are affecting operations at Manila South Harbor and could lead to higher costs for shipping lines using the terminal, according to PortCalls Asia, a news and data provider for cargo transport and logistics professionals.

During a continuation of the  Senate Committee hearing October 27, Asian Terminals Inc. Senior Vice President Sean James Perez said four reclamation projects cover the entrance channel to the Manila South Harbor and the harbor’s inner anchorage. ATI holds the concession to Manila South Harbor, the report said.

Perez identified the four projects as Pasay Reclamation Project of the Pasay Harbor City Corp., Manila Waterfront City by Waterfront Manila Premier Development Inc., Horizon Manila of JBros Construction Corp., and Manila Solar City of the Manila Goldcoast Development Corp.

Salceda says reclamation can be “a great way to raise revenues without raising taxes. We already considered funding the military pension system out of reclamation rights in the past, but the idea was ultimately shelved because most reclamation projects are local government projects”.

President Marcos’s decision is a good way to fix the fiscal side of reclamation projects,” The lawmaker maintains.

But the oppositions are straining their voice to be heard. The Eco-Convergence, a group formed in 2019 to promote Pope Francis’ Laudato Si encyclical a church-civil society ecological group led a human chain protest against the controversial reclamation projects in Manila Bay, dubbed “Save Our Sunset, Save Manila Bay,” which aimed to call for a “total ban” on reclamation in Manila Bay.