Our regional disparities
At least five interesting facts come out when you examine the economic data across our 18 regions. One, Metro Manila disproportionately gets more than two-and-a-half times the share of national income compared with its share of the total population, and more than 60 times its proportionate land area. Two, even as our economy’s aggregate growth sped up last year, most of our regions actually slowed down. Three, agriculture is the major economic sector that is most evenly distributed across our country’s regions. Four, agriculture is geographically the most evenly spread across our regions among the three major economic sectors. And five, Mindanao has generally been narrowing its income gap with the rest of the country, although the gap remains wide.
Metro Manila (aka the National Capital Region, or NCR) accounts for 12.2 percent of our country’s entire population, but actually gets 2.56 times, or 31.2 percent of our national income as of 2024. It also accounts for only about half a percent of the country’s total land area, yet its share of the economy is more than 60 times. On the other hand, it’s the reverse for 11 regions: they share significantly less national income than their population share. For example, the Bangsamoro Autonomous Region in Muslim Mindanao’s (BARMM) GDP (4.7 percent population contribution) is nearly four times its 1.3 percent share of national income, the lowest among the regions. The Bicol Region has 5.6 percent of the total population, but accounts for only 2.9 percent of GDP.
In 2024, our economy’s overall annual growth sped up to 5.7 percent from 5.5 percent in 2023, and yet 10 of our 18 regions actually slowed down. The largest slowdown happened in Western Visayas, whose 6.8 percent growth in 2023 was trimmed to 4.3 percent in 2024, a 2.5 percentage point reduction. Meanwhile, Mindanao’s Caraga Region posted an impressive 6.9 percent GDP growth in 2024, up from 4.8 percent the previous year. Still, Metro Manila contributed most to our overall growth by sheer absolute magnitude, with an improvement from 4.9 to 5.6 percent between 2023 and 2024. Region 12 (Southern Mindanao) also sped up from 3.5 to 5.5 percent growth, while the fastest-growing Central Visayas (the Cebu region) maintained a 7.3 percent growth rate.
I have constantly pointed out over the years that the Philippines has long ceased to be an agricultural economy, contrary to the impression of many. Agriculture now makes up less than a 10th (9.1 percent) of our output, behind services (63.2 percent) and industry (27.7 percent). In fact, there is no longer any region in the economy where agriculture, forestry, and fisheries are the most dominant of the sectors. The closest is BARMM, where AFF accounts for 36.3 percent of production, slightly less than services’ 38 percent share. The rest of the Mindanao regions may look mainly agricultural, but AFF is actually the smallest sector in all of them except for BARMM, where it exceeds the share of industry (25.8 percent). Industry, dominated by manufacturing and mining, actually accounts for a quarter to a third of production, while services, dominated by trading, is the most prominent sector, accounting for 38 (BARMM) to 61.1 percent (Davao Region) of the regional economy.
The country’s industry and services output is heavily skewed to Metro Manila and its surrounding provinces in Regions 3 (Central Luzon) and 4-A (Calabarzon). In fact, just Metro Manila and Calabarzon alone already account for more than half (52.1 percent) of our GDP from services, while those two, along with Central Luzon, make up 58 percent of our GDP in industry. In contrast, it takes six regions (Central Luzon, Northern Mindanao, Davao Region, Calabarzon, Southern Mindanao, and Ilocos Region) to make up the first half of our total GDP from agriculture, and contributions to our agricultural output are much more evenly spread across the regions. This is one reason why agriculture is rightly described as the backbone of our economy, in the way it connects our regions together. It is also our most inclusive economic sector, where the benefits of the sector’s growth permeate throughout the country, unlike in services and industry, where the bulk of the benefits of growth go to only two to three regions.
Finally, Mindanao has been catching up with the rest of the country, especially Luzon and NCR. Whereas in 2015, the average income in NCR was 4.4 times that in Mindanao, this ratio was down to 3.6 times in 2024. Average income in all of Luzon was 1.9 times that in Mindanao in 2015; in 2024, the ratio was down to 1.7 times. Still, Mindanao’s average income is only comparable to that in Nigeria and India (ranked 153rd to 154th worldwide), while that for Metro Manila is in the range of Russia and Mexico (86th and 87th). We need to keep pursuing the potential of our “land of promise.”
cielito.habito@gmail.com
