The case for regional and local development restated

It is true that despite the recent improved performance of the economy under the present administration of Benigno Aquino III, the Philippines still remained mired in poverty. This can be largely explained by the failure of our policy to promote equity in the distribution of the little income that we have and in generating enough jobs fast enough to meet the growing demands of our population which until now is still one of, if not the highest, in East Asia.

I maintain that much of our problem is also caused by our failure to disperse development in the countryside or outside of Metro Manila and nearby areas. This predicament can be greatly explained by our history.

Nothing much of development can be said during the pre-Spanish time of our history. However, beyond keeping the country in its hold, the Spaniards never really exerted much effort to develop the country. There was the tobacco monopoly and the galleon trade but these two, among the few other attempts of the Spanish colonial government at entrepreneurship, were intended more to benefit the state rather than the people. Worst, the galleons that left Manila for Mexico across the Atlantic were loaded not with Philippine produce but exports from China. If you wonder where the tons of Mexican dollars went, it went to China in exchange for its silk, porcelains and other valuable items like what is happening again unfortunately today with our penchant for mobile phones and other fancy China-made products.

The closing of the Galleon trade when Mexico became free from Spain’s clutches and the era of the first stage of globalization in the 19th century open the country to many foreign traders. These traders did not only come to sell their goods but also bought whatever is profitable for them and useful for their own country and other parts of the world. That is why we saw planted then large areas for coconut, sugar, abaca, tobacco and other valuable cash crops by our people in all parts of the country wherever their industry and land permitted it. Now, the truth be told that the first real improvement of the lives of the Filipino people was through dispersal of development that came during this stage when our people in the countryside were finally enticed to produce a surplus in exchange for cash that allows the most industrious to acquire more good things for themselves beyond their basic needs.

The Land Settlements Policy that the Americans started to make use of the one’s forgotten lands was also followed by Philippine authorities when their time came to govern the country. This also helped a lot to disperse development, especially in Mindanao before it was derailed with the Mindanao pocket war waged by the rebels.

After the last war, many countries that became free like the Philippines attempted at industrialization to improve the well-being of their people. We tried to do this through import substitution and protection of our domestic Industries. This helped the country to grow fast in the post war years. The nature of these industries, however, ensured their concentrated development in Metro Manila and nearby areas where the market was large, where imported machineries and inputs were landed, and where high government officials could be easily reached by investors to get their protection and other favors for their business. The regions were left out.

What is worst is that their focus on the domestic market also ensured that they grew only up to a point that the domestic market would allow.

Export Processing Zones were later on tried to industrialize the country further in the seventies under Martial law. This produced the Bataan, Mactan, Cavite and Baguio Export Processing Zones, then later on the Phividec Industrial Estate in Misamis Oriental in Mindanao. But nothing more significant followed. The rest came later after EDZA 1 which now included special economic zones (SEZs) and IT Parks/Buildings but again mostly located in Metro Manila.

Before Martial law, regional and local development authorities were also tried to spur the development of the countryside in response to the clamor of local politicians to look good for their constituents. Almost every big island or province had one but too many of them means little funding for each. Most were just paper authorities.

The boldest attempt to promote regional or countryside development came with Presidential Decree No. I during Martial law which approved the implementation of the Integrated Reorganization Plan (IRP) of the executive branch of the government. Part VII of the IRP aims to promote regional development through planning and coordination of development in the different regions of the country. The IRP called for the creation of Regional Development Councils (RDCs) in each region to serve as its super planning body and spearhead its development.

But again the result is not very encouraging. In 1975, when all the RDCs were already in operation, Metro Manila or the National Capital Region (NCR) had less than 1% of land and 11.8% of population but had 31.6% of the gross domestic product (GDP) and per capita GDP which was 2.67 bigger than the national average.

Instead of improving over time, we find the NCR as of 2014 enlarging its share to 35.7 percent in 2010 and to 36.3 percent in 2014. When the NCR grew many other regions should shrink.

Finally, much of what happens in the region is also explained by what is done by the local government units (LGUs). Based on the 1991 Local Government Code, 40% of BIR collection (three years before the budget year) are given to the LGUs. Known as Internal Revenue Allotment (IRA), this amounts to P274.5B this year (2014) which represents 63.8 % of all LGU Resources. What has happened to the large sum of IRA that went to the LGUs? Why are many LGUs still devoid of any sign of progress?

It’s time to review all our efforts to promote regional and local development. Unfortunately, not one of our presidential candidates has tackled this issue so far.