Regional Development Strategies in the Philippines: From Diffusion to Integration

Chuo University, Arianne Dela Rosa Dumayas ※Abstract
After periods of lost decades, the Philippines is seemingly on the path of revival as the economy remains strong in themidst of global economic slowdown. Looking deeply into the “boom-bust” growth record would reveal a wide spatial
disparity in growth and development. This uneven distribution of wealth and economic activities across geographic
space exists everywhere, but particularly evident in developing countries like the Philippines. While the capital region
and its neighboring regions have been achieving relative affluence, regions in Visayas and Mindanao remain in miredin poor local conditions. Various development policies and strategies have been implemented and undertaken toaddress this spatial disparity. This study surveys the various development strategies undertaken in the Philippines andanalyses the transformation in development thinking. This study also presents facts and figures of economic
geography of the Philippines.
Keywords: Regional Development, Spatial Disparity, Industrialization, Decentralization
JEL: O.2, O.18, O.53, R.11

1. IntroductionDevelopment policy thinking that take into consideration the importance of geographical space in development has
undergone significant transformation over the past decades: from neo-classical economics thinking to new economic
geography and to institutional economics. The development strategies in the Philippines have also adopted this neoclassical and trickle-down approach. Some argued that this have resulted to wide spatial disparities in the country.
While the capital Metro Manila and the nearby regions are flourishing, the remote areas continue to flounder.
Some researchers argue that this spatial inequality is inevitable in the course of the development, however, this does
not warrant the neglect of the lagging regions. World Development Report 2009 asserts “no places should be left
behind mired in poverty,” thus efforts should be made to integrate or facilitate the catch-up of the lagging regions. As
an archipelago composed of 7,107 islands, diffusion of economic activities or integration of economic activities issuch a daunting task. With the recent stellar economic performance of the Philippines which brings both theopportunity to achieve inclusive development and the perils of widening inequalities, it is opportune to examine thevarious development policies, particularly those which are aimed to address the spatial disparities. This study presents
facts and figures of the economic geography of the Philippines. This study analyzes how the concepts and practice ofregional development have changed over the past years. In particular, this study aims to answer the following
questions:
1. How do regions/provinces in the Philippines differ in terms of growth and development?
2. How do regional development policies have evolved during the past decades?
2. Economic Geography of the Philippines
The Philippines is an archipelago located in the Southeast Asia. It is composed of 7, 107 islands which totals to300,000 square kilometers, the second biggest archipelagic country in the world. The topography of these islands
varies, from mountains, hills, and plains. The Philippines is one of the newly-industrializing economies and in recentyears, its economy proved to be resilient to global economic slowdown as it grows at an average of 7 percent. This
growth was mainly fueled by the expansion of the services sector, particularly the BPO businesses. The Philippines isdivided into three main islands; Luzon, Visayas, Mindanao. The country is divided further into 17 regions, 80
provinces, 138 cities, 1,496 municipalities, and 42,025 barangays1.
In terms of land area, Region IV-A (MIMAROPA) is the biggest region and the National Capital Region (NCR) isthe smallest. NCR may be the smallest region but it is the most populated region with 11.5 million packed within 636
kms. CARAGA and Region II (Cagayan Valley) are the least populated regions.
In terms of contribution to country’s total output, NCR is the biggest contributor with 36% in 2012, followed by
Region IV-A Calabarzon with 17%, and Region III (Central Luzon) with 9%. Central Visayas is the main contributor
in the Visayas area, while Northern Mindanao and Davao region are the main sources of economic output inMindanao.NCR also has the highest GRDP per capita with 183,747 pesos in 2012 and ARMM has the lowest with
1 Barangay, the smallest administrative unit, is derived from the Malay word, Balangay, which means sailboat. Early inhabitants are said to havereached the islands through these sailboats.

only 14,321 pesos in 2012.
Table 1. Regional Demography
Regions

Land Area

Population

GRDP (%)

GRDP Per capita

NCR

636

11,55335.73

183.75

CAR

18,294

1,521

1.95

73.57

R1-Ilocos

12,840

4,546

3.07

39.81

R2-Cagayan Valley

26,875

3,051

1.81

34.36

R3-Central Luzon

21,470

9,721

9.21

55.07

R4A-Calabarzon

16,22911,743

17.39

82.39

R4B-MIMAROPA

27,456

2,560

1.73

38.51

R5-Bicol

17,632

5,110

1.97

22.31

R6-Western Visayas

20,223

6,844

4.11

35.56

R7-Central Visayas

14,891

6,399

6.30

56.51

R8-Eastern Visayas

21,4323,913

2.2934.31

R9-Zamboanga Region

15,997

3,230

2.09

37.28

R10- Northern Mindanao

14,056

3,952

3.80

53.63

R11-Davao Region

27,141

4,157

3.84

52.20

R12-SOCCKSARAGEN

14,373

3,829

2.73

40.04

CARAGA

18,847

2,293

1.23

30.95

ARMM

11,608

4,121

0.76

14.32

* Land Area(sq.kms.), Population(2007) in thousand, GRDP(2012), GRDP per capita(2012) in thousand pesos
Source: National Statistical Office(NSO)

3. Evolution of Regional Development Policies: From Diffusion to Integration
Borrowing the classification of policies from WDR 2009, it would seem that policy-makers and decisionmakers in the Philippines are well aware of the complex nature of spatial policies as evident with the mix ofdevelopment efforts pursued. Post-war efforts were mainly focused on macro-economic policies and it was
not until 1970s that spatial disparity has been give been proper notice in policy-making. As mentioned earlier,
it was the Five-Year Development Framework 1978-1982 which has the very first Five-Year Regional
Development Plan 1978-1982. The theme of spatially-blind policies pursued has varied over the years fromexport-oriented growth to agro-industrial balanced growth strategy to inclusive growth strategy.
Meanwhile, many spatially-focused policies have emerged from late 1970s onwards. These spatially-focusedpolicies also vary greatly with their focus but the trickle-down approaches through development of urban
centers have been the preferred approach. These urban centers have later incorporated its surrounding areas andwere organized as metropolitan areas. National Economic Development Authority (NEDA) identifies 12 major
metropolitan areas in the Philippines. Metro Manila is the biggest metropolitan areas followed by Metro Cebu
and Metro Davao. Seven out of the twelve metropolitan areas are located in the main island of Luzon.

In recognition of the fact that poverty has been synonymous to agriculture, policies dedicated to impoverishedregion, mainly through agricultural development, have also been pursued. Land redistribution has been themain theme of agricultural reforms and rural development starting from post-war period. The Agricultural Land
Reform of 1963 under Macapagal administration is one of the landmark pieces of legislation which abolishes
the shared tenancy system. The Comprehensive Agrarian Reform Program (CARP) of 1987 under the Aquino
administration has been the main basis for land-share and social equity reforms for more than two decades now.
On the surface, it would seem that the Philippines have well thought out strategies to address spatial disparities,
particularly the urban-rural divide. However, many of these spatially-focused policies are “well-intended” butsome are “internally-inconsistent” and poorly implemented. In theory, local governments are more
knowledgeable about the local conditions and thus in better position to craft development policies. However,there seems to be improper coordination between local government and national government in terms ofplanning and implementation. Many of the concerns of the local government authorities were not incorporated
in the national development planning or vice versa due to some mismatch in priorities. [Cariño et al. 2004]
argues that many of these investment proposals of the provinces were not implemented when they do notdemonstrate “concrete and reliable connections to national sectoral policy concerns and priorities.”
Furthermore, many of these spatially-focused policies were geared towards diffusion of economic activities asevident with the number of airports and seaports, special economic zones, and state universities [Medalla et al.
2007, cited in [Human Development Network, 2013]. These attempts to disperse economic activities acrossthe regions were not successful mainly due to disregard to economies of scale and lack of development
significance.
With the discontent in dispersion strategy abound, the focus have shifted to integration strategy. Given thearchipelagic nature of the country, special approach is needed to induce connectivity and domestic integration[Asian Development Bank, 2010]. As stipulated in WDR 2009, spatially-connective policies are mainlythrough infrastructure development. Based on the survey, spatially-connective policies through infrastructuredevelopment have not been given explicit attention in the development agenda through the years. Infrastructure
projects are well-documented to bring development and integrate the lagging areas. In particular, the goodquality local roads can induce local growth and development [Llanto, 2007]. Unfortunately, the Philippines asa whole, is under-investing in infrastructure and lags significantly behind its East Asian neighbors [Balisacan,Hill, and Piza, 2008]. In the recent Global Competitiveness Report 2013, the Philippines fare very poorly interms of quality ranking 98th out of 144 countries. The fact that infrastructure is often tied to votes, especially at
the local level, further complicates the infrastructure development. Many local politicians would justdeliberately construct projects with no development significance to win the votes. On the other hand, a few
bright spots in infrastructure development manifested with 2003 roll-on-roll-off (RO-RO) policy reforms.
RORO system is designed to improve inter-island system of trade and tourism. This has resulted to significant
decreased in sea transport costs, enhanced mobility of goods and people, and flourishing domestic tourism.
This RORO system was also adopted in some ASEAN countries.

Table 2. Regional Development Policies and Historical Event

PeriodS ignificant events

postwar to late
1960s

Postwar recovery

1960s to 1970s

1972-1976

1987-1992

1993-1998

1999-20102010-present

Agricultural Land
Reform of 1963

Lifting of Controls; Peso Regional Development
Devaluation,Authorities(RDA)

M artial Law Period; Oil
Crisis of 1973;
Structural Adjustment
by IM F, EconomicLiberalization

1976-1982

1983-1987

S patiallyS patiallyfocused(Intervention) connective(Infrastructure)

Integrated Area
Development(IAD),
Dispersal of factories
away from M anila

Five-Year Regional
Development Plan,
1978-1982

National Physical
Framework of 1970

S patially-blind(Institutions)Filipino First Policy,
Import-substitutionindustrialization(ISI)
Export-orientedindusrialization(EOI)
Four-Year DevelopmentPlan(1972-1975)
mentioned theimportance of regional
development toeconomic growth
inclusion of Regional
Development
Framework in the FiveYear Development Plan,
1978-1982

National Hierarchy of
Human Settlements;
Reforms in Regional
KKK Program
Programming andM artial Law(1972Budgeting, Regional1986); People Power
Project M onitoring, I
M ovement(1986);
RICS, PIEs, Fiscal
Constitution
Incentives for locating
Change(1987);
outside M anila, CARP,
Regional Physical
Synchronized Planning
Framework Plans(RPFPS)Country-side Agriand Budgeting(SPPBS), ,industrial Development
1991 Local Government
Strategy(CAIDS)
Codeinfrastructure improvement
WTO M embership,
Growth Networks,
via market liberalization,
Asian Crisis, AFTA,
National Urban Policy
privatization, built-operateAPEC
Agenda, M M DA
transfer
Super Regions, Next
Strong Nautical Highway,
Poverty Reduction
Wave Cities
Philippine Cyber Corridor
Digitalization, 9/11
Priority Industry
Terrorist Attacks,Clustering(2011-2016), Public-Private Partnership
Impeachment of Estrada,
Inclusive Growth
Pantawid Pamilyang
for infrastructure project
Pilipino

Source: Author’s own construction

4. References
Asian Development Bank (ADB). (2009). Poverty in the Philippines: Causes, Constraints, and Opportunities.
Mandaluyong City: Asian Development Bank (ADB).
Balisacan, A., &Hill, H.&, Piza, S.F (2008). Spatial disparities and development policy in the Philippines. In Huang
Y.m& Bocchi, A.(eds.)Reshaping Economic Geography in Asia . World Bank.
Cariño, B., &Corpuz, A.,& Manasan, R(2004). Preparatory Work for the Proposed Technical Assistance on .
Preparatory work for the proposed technical assistance on strengthening provincial planning and expenditure
management.
Human Development Network. (2013). 2012/2013 Philippines Human Development Report . Human Development
Network.
World Bank. (2009). World Development Report 2009: Reshaping Economic Geography. Washington DC: WorldBank .