The case for regional development

In 1972, Presidential Decree No. 1 implemented the Integrated Reorganization Plan (IRP) of the Executive Branch of the government. The IRP included, as a national policy, the development of the different regions of the country which at that time were falling very much behind Metro Manila where the central government is also located. The same concept was followed by the succeding administrations up to now.

Under the IRP, the developments of each region were to be coordinated and directed by the Regional Development Councils that were to be established in each of them. This would be done through the preparation of the medium term regional development plan and investment program in each region and by requiring each development agency of the national government in the region to submit their annual budget to the RDC to determine if they were consistent with the regional development plan and investment program before they are endorsed to their respective head offices in Manila for funding and implementation.

In 1975, Metro Manila which had less than one percent of the country’s land and 11.8 percent of the population accounted for 31.6 percent of the total national output with a per capita Gross Regional Domestic Product (GRDP) that was 2.67 times the national average. That leaves only 68.4 percent to be shared by the rest of Luzon (32.59%), Visayas (18.88%) and Mindanao (16.93%). Region IV or Southern Tagalog (Regions IVA and IV B) had the next biggest share of the output after Metro Manila with 14.03 percent, followed by Central Luzon with 8.33 percent, Western Visayas with 9.34 percent and Central Visayas with 6.8 percent.

Why do regions, especially those further away from the national capital region, fell behind in development? Can this spatial development inequity be corrected?

It is not easy to say why regions away from the center are left behind in development but the Philippine government believed since the 1970s that it can be corrected as intended under the IRP. Now, more than three decades have already elapsed since the implementation of IRP and start of operation of the RDCs in each of the region. It is interesting to see what happened to the regions since then.

Looking at the same GRDP data mentioned earlier, we find that instead of increasing the share of the different regions of the country when compared with Metro Manila or the National Capital Region as it is called now has declined from 68.4 percent in 1975 to 64.2 percent in 2010 while that of the NCR has increased from 31.6 percent to 35.8 percent. Thanks to the rapid growth of Region IV-A (Calabarzon) and Region III (Central Luzon), the share of the rest of Luzon has increased from 32.59 percent in 1975 to 37.4 percent in 2010. The Visayas had its share cut from 18.88 percent in 1975 to 12.6 percent in 2010 while that of Mindanao had also declined from 16.93 percent to 14.1 percent in the same 35 year period.

I presented the information above during the Business Leaders Meeting last November 12, 2012 prior to the National Business Conference of Independent Business Clubs and Chambers on the following day that was organized by the Makati and Cebu Business Clubs. During my presentation I asked what was wrong with the RDCs or why the more than three decades of their efforts to promote regional development have not changed the spatial development landscape in favor of the regions.

I could only think of two possible explanations. One is that the members of the RDCs are incompetents. The other, which I believed is the real cause, is due to the nature of the RDC system itself, particularly with respect to the inability of the RDCs to implement their respective plans and investment programs.

Up to now, except in the Cordillera Administrative Region and the Autonomous Region of Muslim Mindanao, the RDCs that are in place in all the other regions of the country have no real power to implement their plan. All that they do is to endorse the budget of the regional offices of the national government agencies in the region to their respective central offices for funding and implementation. The agency budget is prepared not so much in conformity with the regional plan but with their national agency plan. When faced with conflicting plans, it is the national agency plan that is followed because it is the national government agency that gets funds from the national government, not the RDC. The only budget the RDC has is for its annual operating expenses, not for program or project implementation.

In the 1980s, the Central Visayas Regional Development Council got its taste of power when the Central Visayas Regional Project Office was established to plan and implement projects with assistance from the World Bank. Its first project was the Central Visayas Regional Project (CVRP) I – Rural which was implemented in selected rural municipalities in the region. Its next project, CVRP I – Urban, incorporated most of the recommended projects from the Metro Cebu Land Use and Transport Study (MCLUTS) together with additional proposals for Tagbilaran City and Dumaguete City with funding also intended to be secured from the World Bank. When finally implemented, however, the CVRP II – Urban became only the Metro Cebu Development Project which was implemented in three phases with Japanese government funding. It is from MCDP I, II and III that we saw the widening of the major roads and construction of new road links in Metro Cebu, which also included the Cebu City South Reclamation Project and Cebu City South Coastal Road.

Since the end of CVRP I – Rural and MCDP I, II and III, however, nothing else followed. It is time we look at the RDC system again to determine where it can be made effective in pursuing regional development.