Makati is fine for a business traveller (infact I would strongly recommend it), but it is not the best place for someone looking to visit Manila as an adventureous tourist. The Shangri-la is overpriced and I suspect not an option for someone with any sort of a reasonable budget. The MO is only five minute walk from the Peninsula and is ok, but I agree, it is not the best in Manila.

There are plenty of great places to stay down near Roxas Bld down by the bay in the Malate area. They are more "local", but a much better experience than Makati - with many backpacker places are around the Malate area. It has a pretty good bar scene also (as backpackers tend to do).