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Which Philippine regions are advancing and lagging?

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Rolando T. Dy

MAP Insights

Over the past eight years and two administrations, the Philippine economy posted a high growth rate averaging over 6% a year and an average gross domestic product (GDP) per capita growth of 4.5% a year. The strategic question is: Which regions have been advancing and which have been lagging over the past eight years?

Related to this concern, the Department of Finance (DoF), in its economic bulletin dated June 14, cited that regional inequality, as measured by the coefficient of variation (CV) of gross regional domestic product (GRDP) per capita, diminished slightly in 2018. This coefficient, the report explained, measures how levels of GRDP per capita vary with respect to the national average. It said inequality worsened from 2016 to 2017 but improved in 2018. Over a longer period, however, the CV rose from 1992 to 2012 and further in 2016.

This article analyzes that differential growth of regions as compared to the Philippine average. The analytics are based on the ratio of regional GDP per capita with the national (Philippine) GDP per capita in real (inflation-adjusted) terms. It spans two periods, 2010-2016 (the Benigno Aquino administration) and 2016-2018 (the Rodrigo Duterte administration).

(Note: Questions may arise on data comparability, especially considering the short period of the current administration. That is the risk the author took. A complete comparable data set can only be done in 2023 at the earliest.)

Among the 17 regions, which regions fared better or worse?

IN LUZON:




• The National Capital Region (NCR) advanced in the first period (2010-2016) and lagged in the second (2016-2018). The latter is a positive development as the NCR has almost three times the national income per capita.

• The Cordillera Autonomous Region (CAR) fared badly in the first period and recovered in the second period. By contrast, Ilocos and Cagayan Valley recorded near stagnancy.

• Central Luzon consistently performed well across the two periods.

• Calabarzon, Mimaropa and Bicol posted deceleration across the long span.

IN VISAYAS:

• Western and Central Visayas registered modest improvements in the two periods.

• Eastern Visayas suffered notably, in part due to Typhoon Yolanda in 2012. It has not recovered since then.

IN MINDANAO:

• Zamboanga’s performance was mediocre. Northern Mindanao’s growth was aligned with the national advance.

• Davao posted the most outstanding record in the past eight years from Aquino to Duterte.

• Soccsksargen lagged in the first period and recovered mildly in the second period. Caraga grew in the first period and lagged in the second.

• ARMM suffered a decline in the first period and remained flat in the second.

CONCLUSIONS
During 2010-2016 (under the Aquino administration), eight regions advanced in income per capita while nine lagged. Similarly, in 2016-2018 (the early phase of the Duterte administration), again eight regions moved up while nine fell away.

Only six regions posted growth consistently: the Ilocos, Central Luzon, Western Visayas, Central Visayas, Northern Mindanao, and Davao. Davao and Central Luzon performed best, in that order. I am optimistic that over the remaining years of the Duterte administration, more regions will be added to the list.

The greater challenge is not only in reducing the regional inequality but the high poverty in the regions, especially in Bicol, Visayas, and Mindanao.

There are several factors (agriculture, industry, and services growth) which affected the regional performance. But since agriculture and its linkages are dominant in many regions, agriculture productivity has been found in earlier studies to be a key growth driver. Low productivity usually translates to low income.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Rolando T. Dy is the Co-Vice Chair of the MAP AgriBusiness Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.

map@map.org.ph

rdyster@gmail.com

http://map.org.ph

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