Regional Development Agenda
Central Luzon, A sustainable and Caring Global Gateway
Technical Notes
The Planning Environment
A.Location, Land Area and Topography
Central Luzon is found immediately north of the National Capital Region and has recently distinguished itself as the only region that has east (Pacific Ocean) and west (China Sea) coasts. It is composed of seven provinces and two highly urbanized cities and has a total land area of 2,147,036 hectares or about 7 percent of the country’s total land area. Forty five percent of this is classified forest lands while the rest are certified alienable and disposable lands. The largest province is Nueva Ecija (528,433 has), while the smallest is Bataan (137,296 has).
Its topography is marked by an extensive central plain surrounded by three (3) mountain ranges (Sierra Madre on the east, Caraballo on the north and Zambales mountains on the west) and the Manila Bay on the southwest. At the middle of the plains is the distinct Mt. Arayat.
It may be recalled that parts of the Sierra Madre experienced rain-induced landslides that buried communities that exacted a high toll in people’s lives and the local economies. Three major weather disturbances: Tropical Depression Violeta (November 22-25, 2004); Winnie (November 28-30, 2004) and Typhoon Yoyong (November 30-December 4, 2004) hit several provinces in Central Luzon. The barangays and municipalities along the slopes of the Sierra Madre Mountain range sustained heavy damage from floods and landslides. These are within the provinces of Aurora, Bulacan, and Nueva Ecija.
The region has a long coastline and only the provinces of Tarlac and Nueva Ecija are landlocked. Several municipalities in the province of Bulacan and Pampanga with coasts along Manila Bay experience regular tidal flooding that are often exacerbated by high volume rainfall occurrences. The same areas contribute to freshwater fish production of the region and of the country since extensive fishponds are operating here. This is also true in low-lying and flood-prone areas in other provinces where mangrove and nipa areas are used for the construction of fishponds.
B.Population and Poverty
As of 2007, the National Statistics Office reported that the region’s population grew at an annual average rate of 2.36 from year 2000. National Statistical Coordination Board estimates reveal an increase in poverty incidence of the population in the region to 20.7% in 2006 compared to 17.5% in 2003. This is, however, lower than the 21.4% poverty incidence in 2000. Almost 40 percent or 121,010 of the 320,109 poor families in the region were in the province of Nueva Ecija which remains largely agricultural. Bataan province has the least number of poor in 2006 with only 8,679 poor families and is the third least poor province in the whole country.
It should be noted however, that the changes in poverty incidence data between 2003 and 2006 showed a marked increase for the province of Bulacan—from 8.5% to 10.0%. Although some quarters attribute this to the influx of poor resettlers from the NCR, more detailed studies of the Provincial Planning and Development Office reveal that the increase may be more the result of low productivities and limited employment opportunities.
Balisacan (2008) notes that poverty in the Philippines remains a rural phenomenon although there is a trend towards urbanization of the issue (Table 1). He estimates that poverty among agricultural households is about three times higher than in other sectors and that this increased from 45.9 percent in 2003 to 48.7 in 2006 for the whole Philippines.
C.Regional Economy
The variety of economic activities of the region has propelled it as a major contributor to national economic growth. Its contribution to Gross Domestic Product (GDP) comes from the three major sectors (Agriculture, Industry and Services). This is highlighted by its inclusion in three super-regions: Urban Beltway, North Agriculture Quadrangle, and the Cyber-Corridor. National government efforts are being geared towards making operational as the Asia-Pacific logistics hub the Subic-Clark corridor.
1. Agriculture and Fishery
Despite the growing industry activity, the region continues to contribute significantly to agricultural production as it accounted for eleven percent of national RP’s Agriculture, Fishery and Forestry output in 2007. Its vast central plains contribute to almost a fifth of national rice production annually thus continues to live to its monicker as the “rice bowl of the Philippines”. The region has been consistent in its contribution to the national production albeit the conversion of agricultural lands to other uses. In 2004, extensive flooding was experienced in the central plains resulting from high volume rainfall events brought by typhoon Yoyong resulting to significant decrease in palay production for that year. This highlights the high susceptibility of the lowland rice producing areas to flooding and other water-related hazards.
The region also tops other regions in the supply of onion, hog and poultry, while it ranks second in mango production and fourth in aquaculture production. Yet, while the region enjoys the record of being a major producer of the aforementioned commodities, it nonetheless has to contend with issues of competition from imported products such as the case of onion, export quality requirement in the case of mango, disease control for the swine industry and availability of feeds for the poultry industry. Such are the felt concerns of the sector aside from the weak organization of agri-producers that in effect contributes to inefficiencies in production and marketing chains.
As mentioned, the region is among the major producers of aquaculture fish. It lags in marine commercial and coastal fishing as well as inland fishing, albeit having a long coastline and an expanse of marine ecosystem including inland resource. If any, this scenario points to a dwindling marine resource brought about by resource degradation.
2. Trade and Industry
Central Luzon is among the top three regions (the others being NCR and Region 4A) leading in the country’s investment generation. At the forefront of attracting investments here are the Subic Bay Freeport Zone (SBFZ) in Zambales and the Clark Freeport Zone (CFZ) in Pampanga. In the latest report on foreign direct investment (FDI) approved (i.e., second quarter of 2009), the two freeports followed PEZA in investment share with SBFZ contributing 13.3 percent share of total commitments and CFZ sharing 12.3 percent. As it is, the freeports provide the much needed employment generation although the DTI avers that the major source of employment in Central Luzon are still those enterprises registered with the agency. BNR accounts for 63.3 percent of total employment in the region in 2006, while the freeports had a combined share of 8.6 percent.
As investments declined from 2006 to 2008, so did the region’s exports. The combination of global and internal economic factors helped stymied growth in these areas with investments falling from P131.7 B in 2006 to P72.55 B in 2008 and exports contracting to 2.7 B USD in 2008 from 4.0 B USD in 2006. The top 5 exports of the region are electronics, which shares bulk of the region’s export revenues, garments and textile, other industrial and consumer manufactures, and fashion accessories and leathergoods.
On the other hand, the region according to the DTI ranks third among regions in terms of number of MSMEs. The region registered a total of 151,303 MSMEs for the period 2004-2006, with micro enterprises making up for 98 percent of the total number. In terms of sector, trade and services make up for the bulk or 87. 5 percent of the total registered establishments followed by manufacturing, which accounts for only about 10 percent.
While the needed infrastructures are being put in place to stimulate investment in the region, issues on the readiness and capability or skills of human resources for prospective industries are emerging challenges. Capability-upgrading to match industry needs with available labor is a concern that must be equally addressed with infrastructure to draw in investments in the region and enhance its competitive edge. The latter is necessary not only for the industries located inside the economic zones but also for the MSMEs, which have to contend as well with cheap imported goods.
3. Tourism
Visitor arrival has been on the uptrend with the number of tourists visiting the region climbing up from 234,359 in 2000 to 530,802 in 2008. The rehabilitation of the DMIA and the subsequent increase in flights of low-cost carriers, both domestic and international, in the airport have the tourists flocking from around the country and the neighboring Asian countries. Better roads have also added to the region’s attraction as the new and rehabilitated expressways have made inter-regional movement easier.
Notwithstanding this development in the region’s tourism activity, so much more remains to be desired especially in terms of attractions and facilities that need to be upgraded or enhanced to better capture the interest of both local and foreign tourists.
4. Mining
The mining and quarrying industry of Central Luzon currently accounts only for 0.01 percent of GRDP yet is seen to have the biggest potentials having been identified as one of the richest mineral areas in the country. Zambales was identified as having vast mineral deposits of chromite, nickel, cobalt, platinum, copper, and gold. These deposits including manganese, silver, magnetite sand, and placer are said to be widely present in the region with all provinces estimated to hold potentials for these. Currently, a total of 44,235 hectares, or 2 percent of the region’s total land area is covered by approved mining tenements, with Zambales having the biggest mining land share of 6.98 percent of its total land area.
The region is also rich in non-metallic minerals such as limestone, sand and gravel, marble, silica, red clay, rock aggregate, silica sand, pumice, feldspar, talc, asbestos, bentonite and guano. Quarry activities are carried out in all provinces with the number of quarry and small-scale mining permits reaching a total of 202 as of August 2009. Most involve mining of sand and gravel, rock aggregates and marble.
D. Transportation and Circulation
Circulation of goods and people within and outside the region is facilitated by a combination of roads, airports and seaports. The construction of a railway system from Clark to and from the National Capital Region is in its initial stage of implementation. The rehabilitation of the Northrail is a necessity in view of the fast urbanization of southwestern Central Luzon practically merging the National Capital Region and Central Luzon. The operation of the Northrail is significant at the national level in view of the very active trans-national exchanges unfolding before these two regions.
The most important north-south road connection between NCR and all regions north are the Manila North Road (MNR) or McArthur Highway and the Cagayan Valley Road (CVR) or the Daang Maharlika. These two serve as the backbone of the road network of Luzon. MNR originates from NCR, traverses the western half of Bulacan, passes through Pampanga and Tarlac, all the way to the provinces of Pangasinan, Ilocos Sur and Ilocos Norte in Region I. On the other hand, CVR originates from MNR in Guiguinto, Bulacan, then runs through the western half of this province, cutting through Nueva Ecija before traversing the length of Cagayan Valley Region. These road links contribute to the primacy of Manila.
These two are supplemented by expressways that provide fast, continuous and reliable north-south travel. The first expressway that was established in the Philippines is the North Luzon Expressway (NLEX) in the ’70s. It provided an alternative shorter and lesser travel time between NCR and Central Luzon. The Bataan Expressway was constructed traversing the length of Bataan Peninsula to support the operations of the then Bataan Export Processing Zone, the country’s first. In March 2005, the NLEx was rehabilitated in view of the corridor-type of development generated along the whole stretch of the MNR (McArthur Highway). The NLEx was supplemented by the construction of the Subic-Clark-Tarlac Expressway (SCTEx) that provides a faster link by land between and among Clark Special Economic and Freeport Zone, Subic Special Economic Zone and Luisita Industrial Park. The NLEx rehabilitation and the construction of the SCTEx are viewed by regional tourism officials as a major factor that contribute to the rise in the number of tourists and prospective investors that visit Central Luzon. Other expressways being proposed to be constructed include Sierra Madre Marginal Highway, Manila Bataan Coastal Road, and portion of the Tarlac–Iba Road. However, current traffic demand is not yet sufficient to support viable operation.
The East-West arterial lateral connection provides access perpendicular or cutting through across the north-south backbones completely connecting the eastern and western seaboards of Central Luzon. The major east-west link of the region is presently provided by three (3) road sections, namely Tarlac–Iba, Tarlac-Sta. Rosa, and the Cabanatuan-Pantabangan-Baler roads. These roads bisect the region and facilitate access to both China Sea and Pacific Ocean. This link, however, is incomplete as the Zambales side of the Tarlac-Iba Road is not yet open making Zambales still inaccessible via Tarlac and vice-versa. The alternative access routes to and from Zambales are through Sta-Cruz-Pangasinan-Camiling Tarlac, the SCTEx-Subic-Iba or through the Gapan-Olongapo-Subic-Iba routes.
The recent cut-off of Botolan has made ingress and egress to Iba and resource-rich part of Zambales costly and difficult. This situation is not conducive to prospective investors because of the added transport costs it would entail resulting from the re-routing through Pangasinan Province. The recent experience however is providential because it depicted in no uncertain terms the value of completing an east-west lateral connection through Tarlac City. To accommodate increased economic interaction between Zambales and Pangasinan, the Mangatarem-Sta. Cruz Highway is expected to assume a more important role in inter-regional connection. Likewise, a considerable length in Aurora is yet to be paved completely. Only the sections in Tarlac are in good condition, Nueva Ecija and Aurora’s sides still require improvement.
It must be emphasized that current access to and from Zambales is limited to two points, the Sta Cruz side and Subic side. Most of the current traffic going to and from Zambales uses the route via Subic. The alignment of the SCTEx provides an opportunity to shorten travel time to the province through a proposed interchange in Porac, Pampanga that may directly connect to the municipality of San Marcelino bypassing the high traffic road between Olongapo and Subic.
Strategic Roads are those roads cutting through areas not covered by, or in support of, the north-south arterial backbones and the east-west laterals. Considered as one of the most important strategic roads in the region is the one connecting and passing through Gapan City, San Fernando City, and Olongapo City now known as Jose Abad Santos Avenue (JASA). Although it does not technically provide a connection between the east and west coast, it functions as such by the extent and magnitude of the traffic it handles to and from the different urban centers in the Region.
E.Governance and Participatory Processes
In a democracy like the Philippines, power ultimately resides in the people and emanates from them. For purposes of reasonableness in the management of people’s affairs, this power is exercised by representatives elected to public office through the exercise of the right of suffrage. While ours is basically characterized as representative, there are certain powers within the democratic framework expressly reserved by the 1987 Philippine Constitution to the people through the power of recall, referendum and plebiscite.
There are two basic types of functions bestowed by law to the Administration, the cohort of people expressly charged with running the affairs of government: sovereign and proprietary functions. Sovereign functions refer to those which by their very nature are strictly governmental. Proprietary relate to those which purpose are to promote the comfort and convenience of the citizens. In the case of the Philippines these have been continually downloaded to the private sector. Administrative functions are discharged by both elective and appointive officials.
Fiscal actions by government straddle between sovereign and proprietary. While taxing policies are strictly sovereign, budgetary decisions as to which sector should receive the highest priority in terms of support is substantively proprietary. In essence, economic benefits are the result of both political decisions by the people and administrative actions by the people elected at the different echelons of government. Although there are no empirical studies on the extent of influence of administrative decisions on the economic development of a particular territory and its people, its influence is certainly present.