Davao, Mar 2: Strengthening local governments and managing urbanization more effectively will be critical to sustaining economic gains and narrowing long-standing regional disparities, an economist said during a development dialogue focused on the Philippines’ growth trajectory.Recent data presented at the forum show that poorer regions have made steady progress in reducing poverty over the past decade. In earlier years, low-income regions were cutting poverty by roughly 2.6 to 2.7 percentage points annually. The National Capital Region (NCR) also saw poverty fall, though at a slower pace of around 0.8 percentage points per year.However, the period from 2018 to 2023 — spanning the years before and after the pandemic — revealed mounting pressures. Poverty reduction in low-income regions slowed to about half a percentage point annually. Middle-income regions even saw a slight uptick in poverty rates, rising by roughly 0.4 percentage points per year. NCR’s poverty rate remained broadly unchanged.
The figures suggest that while poorer regions had been catching up in terms of income growth and welfare improvements, recent shocks exposed vulnerabilities and disrupted momentum.Persistent productivity gapsDespite encouraging signs of convergence, structural divides remain stark.Per capita regional GDP data for 2022, adjusted for purchasing power parity, show the National Capital Region producing around $26,800 per person. In contrast, several mid-tier regions fall within a range of $6,000 to $10,000 per capita.At the lower end of the scale, the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) registers approximately $3,600 per person. Output in NCR is therefore more than seven times higher than in BARMM — a gap that reflects differences in industrial depth, infrastructure, and overall economic complexity.These disparities underline a key point raised at the forum: faster growth in poorer areas, while welcome, has not yet erased deep-rooted productivity gaps.
A divided poverty mapProvincial poverty data reinforce the uneven development picture.Highly urbanized provinces and established economic hubs now report poverty rates largely below 10 percent. In contrast, several provinces in Mindanao and parts of Eastern Visayas continue to post poverty incidences above 30 percent, with some areas exceeding 40 percent.Such geographic concentration of poverty highlights disparities in access to roads, ports, reliable power, education, healthcare, and stable employment. Economists noted that without deliberate policy efforts, these divides risk becoming entrenched.Urbanization as opportunity — and riskThe report presented at the dialogue emphasized that urbanization, if properly managed, can accelerate structural transformation and sustain convergence.Building dynamic urban growth corridors — anchored by strong connectivity and logistics networks — can create jobs and better integrate lagging regions into national and global markets. But the outcome will depend heavily on local capacity.Local governments must be able to finance infrastructure, guide orderly urban expansion, and deliver essential services. Weak fiscal capacity or planning gaps, experts warned, could turn rapid urban growth into a source of congestion, inequality, and social strain rather than inclusive progress. Mindanao at a crossroadsThe discussions in Davao City placed Mindanao at the center of this transition.
Infrastructure upgrades, improved transport links, and expanding agro-industrial value chains are gradually strengthening the region’s role in the national economy. Yet Mindanao also reflects the country’s enduring imbalances, hosting some of the lowest per capita output levels and highest poverty rates despite its strong growth potential.The economist’s presentation pointed to what many participants described as a pivotal moment. The Philippines has achieved measurable gains in income convergence and poverty reduction over the past decade. The next challenge is more complex: translating those gains into lasting structural change that narrows not only growth gaps, but also the deep geographic inequalities shaping the country’s economic future.For policymakers, the message was clear — empowering local governments may prove to be one of the most decisive factors in ensuring that urbanization becomes a driver of inclusive and sustainable growth.
