(Part 1)
In 2019, before the pandemic, I wrote that the province of Batangas will be the epicenter of the next city that will rival the city of Manila as the engine of the Philippines.
I was not surprised when, on April 28, the Philippine Statistics Authority (PSA) issued a press release stating that in 2021, the year of post-pandemic recovery, Calabarzon* or southern Luzon will be the fastest developing region at 7. 6%, well above the national expansion of 5. 7%.
The National Capital Region (NCR) experienced a mediocre expansion of 4. 4%, which, by the way, was already the point of expansion it was experiencing even before the pandemic. I didn’t buy PSA’s explanation that the slower expansion of the NCR was due to the fact that it had the longest blockades between regions. Metro Manila had already lost its leadership position some time ago. There were years just before the pandemic when regions like Davao and even Bicol were developing by 8%, while NCR was struggling to grow by 4%. He had already celebrated the fact that Metro Manila dethroned other more dynamic regions. This is a very positive thing for national economic development. There is a growing decentralization of economic activities from the center to the periphery.
From the thirteenth of April to the 5th of May, I had the opportunity to spend 3 weeks at the Cité des Pins to attend a long seminar of formation in humanities. I take very seriously the saying that the acquisition of skills and wisdom is infinite. During those days of study, rest and recreation, I saw how in Baguio, beginning with Holy Week and the following weeks, Filipinos throughout Luzon had taken the announced “journey of revenge” very seriously. The crowds of domestic tourists that fill this “smart city” gave the impression that the pandemic had never happened. Congratulations to the local elected officials who have struck a fair balance between adequacy measures and expanding the economy.
Not surprisingly, the Cordillera Administrative Region (CAR) is also experiencing an above-average expansion of 7. 5%, outpacing Metro Manila. Domestic tourism is in full force. A stopover at Benguet Corp. ‘s Balatoc mine site in Benguet, accompanied by a manager briefing on its functionality for 2020 to 2021, also made me realize how and why CAR has grown faster than the national average. Mining, thanks to the more moderate policies followed by the Duterte administration after the first anti-mining measures implemented in the first years of the outgoing administration, is a booming industry with record costs for gold, copper and nickel prevailing due to the strong global call. for minerals. A recent report in the Financial Times (April 28) described a severe shortage of those minerals in Europe, as the entire region tries to drastically reduce its dependence on fossil fuels. Nickel and copper, among other minerals, are indispensable for the manufacture of batteries, solar panels and wind turbine apparatus, not to mention all the virtual devices mandatory for the business revolution 4. 0, such as laptops, smartphones, matrix iPads and cables for telecommunications and electrical networks.
It is also worth noting that the CAR has noted an increase in family spending at a higher than average rate. While household final consumption expenditure increased at a national average of 4. 2%, consumption grew at nearly double the rate of 8% in the Central African Republic. However, it is unfortunate that even though Baguio City is considered a smart city, even vying to be an ASEAN arts industry hub, its infrastructure still leaves a lot to be desired. We still see many trucks delivering water to families, despite the presence of Manila Water in the area. Electrical “blackouts” are not uncommon. Whoever has been to Baguio and the surrounding communities, elected local government officials will have to place the highest priority on improving those public services. A good percentage of the budget that will result from the Mandanas-García ruling deserves to be allocated to improving these services. The LGUs, which work together with personal entrepreneurs in Baguio, also deserve to actively seek foreign direct investors from countries such as Japan, South Korea, Taiwan and Spain who can invest in these public services. that were liberalized with the reform of the Civil Service Law. In fact, Acciona, a tough Spanish conglomerate concerned with the ownership and control of infrastructure around the world, has already announced plans to invest up to $12 billion in the Philippines for infrastructure development, specifically water services.
Another region that has grown much faster than the NCR is Region 3 or Downtown Luzon which, like Calabarzon, is already replacing Metro Manila as a residential, advertising and advertising hub. In 2021, the region recorded an expansion rate of 7. 4% to 4. 4%. for the RNC.
Like southern Luzon, this is the first time that central Luzon has surpassed Metro Manila in terms of regional growth. It had grown steadily faster than the NCR for at least the last five years before the pandemic, especially in spaces called the Pampanga Triangle (Angeles, San Fernando, Clark-Subic). All major national real estate companies have major projects in central Luzon, such as Ayala Land and its subsidiaries, Megaworld, Vista Land, Robinson Land, SMDC, Federal Land, etc.
The surrounding provinces of Tarlac, Bataan and Bulacan are also attracting investment from Metro Manila, especially since primary infrastructure projects such as the Clark to Bulacan to Calamba railway and, despite everything, to Bicol, will be completed in the coming years. the assistance of the Japanese. The San Miguel International Airport Project Corp. in Bulacan it will change the rules of the game. Another game-changer for Central Luzon will be the bridge that will be built connecting Cavite with Bataan, passing through the island of Corregidor. This will make it easier for Bataan province, which has one of the highest rates of human progression in the country.
It is also worth noting that two regions in Mindanao grew faster than the national average. These are Region 13, ie Caraga**, and the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). This fact demonstrates the enlightened policy under the Duterte administration in which most of the infrastructure projects financed by the government were directed to the underdeveloped regions of the countryside. The Build, Build, Build program represented the highest expansion rate of gross capital formation in the 2020-2021 era, at the height of the pandemic. This component of GDP (in addition to final household spending, final government spending, exports of goods and services, and imports of goods and services) grew at an astronomical double-digit rate of 20. 3% Array Las Maximum rates of expansion of Caraga and BARMM will have to be basically due to government investment spending on infrastructure. This is a trend that will have to continue in the next administration. Government cash for public works is worth spending on farm-to-market roads, irrigation systems, post-harvest services and others that can improve the lot of rural people.
Infrastructure in urban spaces like Metro Manila and Metro Cebu regularly has to be funded through personal corporations like San Miguel Corp. , ICTSI, Megawide, First Metro Pacific and other conglomerates that have been very active in building airports, tolls, airways, subways, etc. The next management will have to make a special effort to attract foreign direct investment to complement the long-term capital that those domestic corporations have invested in the Build, Build, Build program.
In Visayas, it is also a smart sign that there are regions that are emerging faster than the central Visayas to which Metro Cebu belongs. Central Visayas grew at a lower than average rate of 5. 4% compared to Western Visayas which grew by 5. 9% and Eastern Visayas by 6%. This represents a healthy trend that parallels what is happening in Metro Manila. There is a reduction in concentration in the Cebu metropolitan domain and more investment in the Western Visayas, especially in the Iloilo-Bacolod ward, which will be even more exciting for investors once the bridge connecting Iloilo to Guimaras and Bacolod is completed. . This will unite those two urban centers of Ilonggo into a single megalopolis. In fact, Iloilo is already a more exciting place for new investment in real estate, the hospitality industry, and the BPO-IT sector than traffic-infested Metro Cebu. The higher rate of expansion in Eastern Visayas bodes well for a more equitable distribution of income, as Samar and Leyte have traditionally suffered from one of the highest incidences of poverty in the country. No
(To be continued. )
* A coat rack with the names of the provinces of Cavite, Laguna, Batangas, Rizal and Quezon.
** The region contains five provinces: Agusan del Norte, Agusan del Sur, Islas Dinagat, Surigao del Norte and Surigao del Sur.
BERNARDO M. VILLEGAS holds a Ph. D. in Economics from Harvard, is Professor Emeritus at the University of Asia and the Pacific and Visiting Professor at IESE Business School in Barcelona, Spain. Member of the Constitutional Commission of 1986. bernardo. villegas@uap. asia