Federalism and imperial Manila

If they think shifting to a federal form of government will diminish ‘imperial Manila,’ they’ll be in for a surprise,” asserted a couple of financial analyst friends over an animated lunch discussion recently. It’s going to be an even more imperial Manila under federalism, they predicted. And there’s good reason to think they may be right.

I’ve written before of the wide disparities across the country’s regions, in all essential attributes, be it size (land area), population, income, economic activity, poverty levels, human development conditions, natural resource endowments, and more. Metro Manila only accounts for a miniscule 0.21 percent of our total land area. But its population density of 20,875 persons per square kilometer is about 62 times the national average density of only 337. And it’s 240 times that of the Cordillera Administrative Region’s 87, our most sparsely populated region.

Metro Manila gets 36.4 percent of total incomes (GDP) in the country, yet its share of the total population is just about one-third of that percentage (12.8 percent). Together with its surrounding provinces of Central Luzon and Calabarzon, they have nearly two-thirds (63 percent) of our national income, yet account for only 38.2 percent of the population.

For most of the other regions, the situation is the reverse; their share of incomes is far less than their share of the population. The Bicol Region has 5.7 percent of the population, but only 2 percent of GDP. Eastern Visayas has 4.4 percent of the population, but only 2.2 percent of GDP. Mindanao’s Caraga region has 2.6 percent of the population, but only 1.2 percent of GDP. The Autonomous Region in Muslim Mindanao (ARMM) has 3.7 percent of the population, yet only 0.6 percent of GDP. It’s a similar story for most other regions.

We see all these reflected in wide disparities in average incomes and poverty incidence. In 2017, average income (GDP divided by the population) in Metro Manila was three times the national average of P151,000, while that in ARMM was only one-fifth, and only one-third in Bicol. The poor only make up 2.7 percent of Metro Manila residents, while Eastern Visayas and the Mindanao regions (except Davao) count more than 30 percent of their residents as poor. ARMM has the worst, with nearly half the population (48.2 percent) poor.

Even in the face of higher inflation in the past year, Metro Manila residents were somewhat favored, having had the advantage of slower price increases, compared to areas outside of Metro Manila. In December, when average nationwide inflation rate was 5.1 percent, it was only 4.8 percent in Metro Manila, but 5.3 percent elsewhere. The reason, of course, is that Metro Manila is favored with much more infrastructure that eases the flow of various goods. Contrast that with remote mountainous or island provinces where transport costs, made much higher by the much higher world oil prices in 2018 compared to the previous year, became even more of a burden. In Metro Manila, all national roads are paved, while the average for Mindanao is only around 80 percent.

When a research team I was part of did a survey of key establishments in Mindanao to track regional flows of products across, into and out of Mindanao, we found that the bulk of product inflows and outflows from Mindanao’s regions still go to or come from outside Mindanao, especially Metro Manila and the rest of Luzon. This suggests that Mindanao’s economic centers remain primarily as satellites to Metro Manila, all feeding into the latter’s need for raw materials for products processed and/or shipped out of the country from Metro Manila.

All these wide disparities make it absolutely essential that well-endowed regions share their blessings with the lesser-endowed ones. I find it highly unlikely that once given greater autonomy, the former would be more forthcoming about giving up what they have to share it with the latter. Meanwhile, people will continue “voting with their feet” and move to the better-endowed regions, foremost of which are Metro Manila and its surrounding provinces.

I think my friends may be right. Imperial Manila could be even more imperial under federalism.

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