20th Century Cities In The Philippines

Globalization And Localization In The 21st Century:
The Case of Mindanao Regions in the Philippines 1/
Sophremiano B. Antipolo 2/
Globalization has, indeed, emerged as one of the most powerful phenomena shaping
our socio-economic environment. In this 21st century, matters concerning globalization present new challenges for rural, urban and regional development planners
throughout the world. In the Philippines, with the enactment and implementation
of decentralization, the central challenge becomes twofold: confronting global
competition and improving local governance. This is because globalization is
accompanied with localization that tends to erode the regulatory power of nationstates. This paper reviews the implications and the challenges posed by globalization and attempts to examine and demonstrate how the decentralized cities in the
Mindanao regions of the Philippines continue to gear towards such challenges in
this century.
Globalization and localization: to what extent will these paradoxical and co-existing
forces determine the course of urban and regional planning? And what are the
challenges they pose upon the decentralized cities in the 21st century? Globalization has
recently emerged as one of the most powerful phenomena shaping our socio-economic
environment. In this 21st century, matters concerning globalization present new
challenges for urban and regional planners throughout the world. Indeed, increasing
globalization of economic activities necessitates a critical re-evaluation of existing urban
and regional development strategies which seek to improve the quality of life and to
reduce spatial inequalities.
In the Philippines, with the enactment and on-going implementation of the
decentralization policy through the 1991 Local Government Code -- hereafter referred to
as the Local Code -- the central challenge becomes twofold: (1) facing global
competition, and (2) improving local governance. This is because globalization is
accompanied with localization and, in the process, tends to erode the regulatory power of
nation-states. For one, globalization is closely related to the localization strategy of
transnational corporations (TNCs) for their business activities.
Under these
circumstances, the general propensity of TNCs is to integrate their business activities
with the local economic environment where their establishments are located.
Globalization and localization, then, signal the need to emphasize the active role of
spatial planning in determining regional and economic development policies and
strategies. In this context, the performance of rural, urban and regional economies are
largely dependent upon the capacity and capability of local government units.
In this paper, I shall attempt to examine and demonstrate how the cities under
the decentralized form of governance can gear towards the challenges of globalization
and localization, using the case of Mindanao Regions in the Philippines. In particular,
the paper is organized in seven parts. It begins with a review of the spatial implications
of globalization in order to put into context the more specific challenges for urban and
regional planning. Part 2 presents a reconciliation of the issue surrounding "balanced
growth" and "inequality". Part 3 provides a brief elucidation on how decentralization can
be pursued by strengthening urban-rural linkages. Part 4 reviews the current MediumTerm Philippine Development Plan to provide a macro-perspective concerning the
country’s response to the challenges of globalization. Part 5 discusses the spatial and
urban development patterns of the Philippines “before” and “during” the 20 th century to
provide some reference points for examining the potentials of Mindanao cities. Part 6
demonstrates how the decentralized cities in the Mindanao Regions are gearing towards
the challenges of globalization and localization in the 21st century.
Part 7 concludes this
The Spatial Implications and Challenges
Of Globalization and Localization
Lee and Kim (1995)3/ alerted us of at least three distinctive impacts of globalization on
spatial configuration and regional development. First, the weakening of nation-states
reduces their ability to control the movement of capital, products, and labor across
national boundaries and to distribute resources to achieve territorial equalization. They
argued that this situation can lead to the intensification of competition among regions and
localities and are likely to expand spatial inequalities. There will be greater inequality
between cities and rural areas and among cities of different sizes. In addition, regions
and local units will become more important economic units operating on a global scale
rather than the nation-states. Thus, globalization will require a new approach to policymaking based on a “partnership” with localities and regions, whose local knowledge is
far superior to that of the central government (Dubford and Kafkalas, 1992)4/ .
Localization of the economy and decision-making mechanism are also closely related to
the corporate globalization and localization strategy of
business activities.
Transnational corporations have tended to seek the expansion of their market and
production spaces on a global scale but their transnational plants have tended to be
integrated with local business environments to make maximum use of resources where
their plants are located. No wonder, Swyngedouw (1992)5/ reiterated Andrew Mair
(1991) who coined the term ‘glocalization’ to characterize this paradoxical co-existence
of globalization and localization. Also, the weakening of the nation-states has tended to
expand the role of the private sector in regional and local development. Over time, the
public sector is increasingly dependent upon the private sector, even for the provision of
Second, the increase in the mobility of capital is likely to increase outflows of
domestic capital to other countries and inflows of foreign capital. The increase in
outflows of capital may lead to a rapid decrease of production activities in industrialized
areas, particularly in areas where labor intensive industries are concentrated and also a
reduction of factory movements between industrialized and less industrialized areas.
Since the industrialization of less prosperous areas has greatly relied on the demand
created in industrialized regions, the increase of capital outflows is likely to reduce the
potentiality of industrial development in the less prosperous regions. Furthermore, the
increase of foreign capital inflows may undermine the self-sufficiency of the local
economic development base, since local economic activities controlled by foreign
ownership is increasing. Thus, one of the major challenges confronting future regional
development is to maintain stability and self-sufficiency in the local economy during the
process of globalization. Recent empirical studies show that the creation of industrial
districts, localities programs can be an effective development strategy for the localization
of the economy in the process of globalization (Amin, 1992)6/.
Third, there is a global spread of a capitalist mode of production based on
flexible production technology.
In economic sense, globalization was initiated by
advanced economies as a response to the crises of post-war capitalist production system.
This system was based on capital intensity, standardization of production and unionized
labor organisation. This Fordist mode of production has been transformed into a PostFordist mode based on flexible production technology. A new capitalist production
system will move towards flexible specialization in high valued-adding activities and
specialized producer services. Rapid changes in technology and market demands have
created uncertainty and risk in the investment climate. To adapt to this changing
environment, manufacturing firms have increased vertical and horizontal disaggregation
of their organizations and established linkages with other organizations. Thus, in a
flexible regime, firms favor business environments in which they can easily obtain
professionals and scientists and establish cooperative production systems or networks
with other organizations (Leborgne & Lipietz, 1988)7/. Also, in situations of greater
decentralization of economic activities, decision-making tend to be tied and rooted in a
particular place while they maintain immediate global contacts.
“Balanced Growth” and “Inequalities” Reconciled
Prominent in the quest for decentralization as in the approach for inter-regional planning
are the terms “balanced growth” and “regional balance”. The achievement of a regional
balance between people, jobs, and environment is a fine rhetoric, but the term ‘balance’
is somewhat confusing and has been given a variety of meanings. It could mean that
poorer regions should grow faster than the rich ones so that their income levels tend to
equalize; in this context, ‘balance’ means ‘convergence’. Another interpretation could
mean that the rate of growth in the poor regions should keep pace with that of the
prosperous regions. In this case, the nation and the constituent regions would grow at
the same rate, but as a consequence of this would be a widening of absolute income
differentials between the rich and the poor regions.
To settle the matter of operational meaning of the terms in relation to the quest for
equality, Friedmann (1978)8/ offers that by the word ‘balance’, no rigid mathematical
balance is needed. What is meant instead is a sense of systematic inter-relations between
and among regions, between rural and urban areas in which their notorious differences or
‘inequality’ in levels of living and opportunity will become progressively less
By Strengthening Urban-Rural Linkages
While on professional affiliation with the Infrastructure and Urban Development
Department at the World Bank Headquarters in Washington, D.C., Antipolo (1989)9/
conducted an international survey on rural-urban linkages. The survey pointed to an
ultimate general recommendation – pursue decentralization. Hereunder is a brief
summary of some lessons learned out of the empirical evidence that bear relevant
implications for pursuing decentralization.
Faced with the increasing concentration and economic activity in few large cities, policy-makers have
sought to implement spatial policies to decentralize population and employment from the large urban
centres. In most developing countries, spatial policies have taken various forms, including outright
prohibition of manufacturing activities by rule of laws, various fiscal incentives and infrastructure
investments (Lee, 1989)10/.
The most important services and facilities for rural development within a region cannot be merely
scattered over its landscape, but must be located in towns and cities whose sizes are sufficiently large
and diversified to offer economies of scale and proximity. In this connection, decentralization
through the development of market towns, small and intermediate cities is important not only for the
efficient location of services and infrastructure needed to support rural and agricultural development,
but also because these urban centres function as markets for agricultural goods, as channels through
which agricultural products from rural areas are distributed to larger urban markets, and as source of
off-farm employment (Owens et. al., 1976)11/.
Rural and agricultural development stimulates growth of small and intermediate cities. Studies in the
Philippines have shown that the impact of agricultural development on urban growth is particularly
strong at the lower end of the settlement hierarchy. This implies that governments can stimulate the
growth of small and intermediate cities by decentralizing agricultural programs and rational
allocation of investments in support services, including infrastructure (Gibb, 1984)12/.
An alternative approach to spatial development should seek to move away from highly skewed pattern
of population and resource distribution found in the primate city toward a more diffused or
decentralized pattern of urbanization in which the small and intermediate urban centres play
important role in integrating urban and rural economies (Friedman, 1981) 13/.
The strategy for strengthening of urban-rural linkages is discussed in the Philippine
Medium-Term Development Plan as well as in the Philippine Framework for Physical
Development .
The Current Medium-Term Philippine Development Plan:
Responding to the Challenges of Globalization
The current Medium-Term Philippine Development Plan is anchored on the twin
strategies of people empowerment and global competitiveness within the context of
sustainable development. On one hand, the strategy of people empowerment has its
roots from the restoration of Philippine democracy through the world acclaimed
“People Power at EDSA”14/ in 1986 after over two decades of dictatorial regime. On the
other hand, the strategy of global competitiveness aims to respond to the rapid
development in the international trade environment such as the establishment of the
World Trade Organization (WTO), liberalization, deregulation, and facilitation initiatives
under the Association of Southeast Asian Nations (ASEAN), and the Asia-Pacific
Economic Cooperation (APEC).
Strengthening the Mindanao Cities for Global Competition
The Philippines recognizes the need to increase the capacities of Mindanao urban centres
to be more competent for global competition. To further enhance their capacities, the
Medium-Term Development Plan has adopted the following key development strategies,
namely: (1) full physical integration of Mindanao into the global economy by infusion
of the much needed infrastructure support that can consolidate the region’s potential
into a vibrant economic unit; and (2) strengthen Mindanao’s direct global trade and
economic links with the rest of the world through the implementation of enabling
policies. This approach is intended to encourage more inflow of private sector
investments -- both local and foreign -- to spur economic growth. At the same time ,
Mindanao cities shall continue to provide critical services such as health service
delivery, tertiary education, inter-Mindanao regional coordination and international
To reinforce the key development strategies, three sub-strategies have been identified
to strengthen rural-urban linkages and, in the process, minimize rural-urban, and interregional disparities: (1) rural-focused strategy - identification of rural satellite centers to
serve as trading posts of consumer goods and raw materials and providing them with
adequate physical and social infrastructure; (2) multi-polar strategy - identification of
growth poles or regional agro-industrial centres as recipients of foreign investments; and
(3) growth corridor strategy - promotion of investments along existing main transport
routes or through communication networks
Through the adoption of a rural-focused strategy, investments will be poured into
the People’s Industrial Estates (PIEs) set within the identified rural satellite centres.
These centres serve as trading posts of consumer goods as well as provide the necessary
raw materials for processing at the urban centres. The second sub-strategy -- multi-polar
development -- involves the identification, promotion and development of growth
centres within each region which will relate with the key partners in East Asia and even
extending up to Australia. These identified urban centres will be the main recipients of
local and foreign investments. Finally, the growth corridor development sub-strategy
involves the promotion of investments along the existing and potential transport routes
as well as through communication networks connecting two or more growth poles.
Decentralized Form of Governance
The MTPDP emphasizes that for the twin strategies to work, policies flowing from such
strategies must conform to the guiding principles of decentralization, democratic
consultation, and reliance on non-government initiatives
Specifically, the MTPDP provides that:
(NEDA Board, 1992)15/.
In governance, a direct outcome of the strategy of empowerment is the principle of
decentralization and subsidiarity. Lower levels of government (regional and local) must be
allowed to set priorities and decide matters in their own spheres of competence.
Indeed, in the 1990s -- towards the end of the Aquino administration and for much of
the Ramos presidency -- three major events had taken place in the area of politicoadministrative development that bear relevance to decentralization in the Philippines:
The Local Government Code (LGC) was enacted in October 1991 to carry out the government’s
commitment to local autonomy and people empowerment. The Local Code allocates substantive
portion of government funds and devolves extensive powers to the local government units
Executive Order 505 was passed in February 1992 to make the Regional Development Councils
(RDCs) more responsive to the increased needs of local government units (LGUs) for technical
assistance in the areas of planning, investment programming and project development.
Specifically, the key features in the reorganized RDCs are the inclusion of the legislators
(congressmen) as regular members, and the addition of some functions related to the devolution
Executive Order 512 was issued in March 1992 creating the Mindanao Economic Development
Council (MEDCo) to ensure the increased viability of programs and projects in the four
administrative regions in Mindanao, including the Autonomous Region in Muslim Mindanao
The Philippines is, perhaps, the only country in Southeast Asia that has implemented
political decentralization (i.e., devolution) through the enactment of the 1991 Local Code.
And while the time frame of the current national plan is winding up, indications are
clear that the successor MTPDP for the plan period, 2010-2014, will remain anchored on
the twin strategy above-stated as the newly-elected Benigno Simeon C. Aquino III has
vowed to continue the worthy initiatives of the past administrations.
Spatial and Urban Development In the Philippines
The first three quarters of the 20th century saw profound changes in the Philippine
economy. Over the period 1900-1975, the country experienced a more than quintupling
of its population and a roughly twenty-one-fold increase of the total number of industrial
establishments (Paderanga and Pernia, 1978)16/. This was accompanied by a structural
transformation of the economy as exemplified by shifts away from some industries
towards others. For instance, estimates of gross value added indicate that in 1903, the
primary (agricultural) sector accounted for 55 per cent of the total output, followed by
the tertiary (service) sector with 32 per cent, and the secondary (industrial) sector with
13 percent. By 1975, the primary sector’s share had declined to 27 per cent, with the
tertiary and secondary sectors contributing expanded shares of 40 and 33 per cent,
respectively. Running parallel to the structural transformation of the economy was a
changing spatial configuration. In general, the seventy-five-year period saw a secular
increase in the primacy of Metropolitan Manila – the National Capital Region (NCR).
Already the administrative capital and economic centre of the country at the turn of the
century, Manila steadily became more dominant especially in the postwar period.
These developments are traceable to policy shifts17/.
The forces that shaped the overall growth of the economy and its accompanying
spatial configuration necessarily also left deep imprints on the system of cities. Cities
have developed in varying ways and at different rates corresponding to their roles in the
regions and in the country as a whole. They tend to reflect the importance of their
regions of influence as well as their relationship to the macro-economy. The
predominance of Metropolitan Manila, for example, manifests its centrality in the
The Hierarchy of Settlements Before the 20th Century
The pattern of settlements during the pre-colonial period reflected the prevailing
institutional arrangement and the economic activity in the settlements. Most of the
largest communities were coastal villages engaged in extensive external trade. Manila (in
Luzon) and Cebu (in the Visayas) were large agricultural and fishing villages with strong
secondary trade functions. Urban clusters were established during the Spanish regime to
act not only as trading centres but also as defensive points from which control of
indigenous villages was possible. Doeppers18/ identified a three-level hierarchy of
settlements then prevailing: (a) capital city with Manila directing the affairs of the
country; (b) provincial centres (ciudades and villas) were centres of military, political,
and ecclesiastical control composed of Cebu, Naga, Nueva Segovia, all ciudades and
villas in Panay, and Fernandia (Vigan); and (c) central church villages or cabeceras
which became the focal points of activity and cultural change. These settlements were
given functional importance and social prestige which distinguished them from other
In the late 19th century – the end of the Spanish colonial period – the urban
hierarchy that evolved mirrored the economic development of that period. Consistent
with the development pattern at that time, the urban hierarchy in 1900 was such that
urban places were not evenly distributed. Almost half of the third-ranked towns, for
instance, were concentrated in Southern Tagalog and Central Luzon and the secondranked cities were found in the Visayas namely: Cebu and Iloilo.
The Urban System in the First Half of the 20th Century
Since the turn of the 20th century, the urban system has been growing both in terms of
their proportion to the total population and the number of urban places. Likewise, there
had been remarkable mutations within the urban hierarchy during the seventy-five year
period. Membership in the top thirty urban places, for example, has continually changed,
implying that centres of population and economic activity have been shifting20/ The
earlier census years had more top central places located in Luzon and in the other
traditional agricultural regions (the Visayas), reflecting the earlier development of places
closer to the seat of government. The later years show the representation to be more
evenly balanced among the regions.
Urbanization In the Second Half of the 20th Century
The urban population of the Philippines grew at an average of 4.43 per cent from 19482000 (Table 1). However, the distribution of urban population has been highly skewed,
with Metropolitan Manila or the National Capital Region (NCR) accounting for about 27
per cent of the total urban population in 2000. The NCR has been the singular focus of
all economic, social, political, and cultural activities in the Philippines. Its primacy has
been reinforced to a level of a “mega city” that it can hardly meet the demands of its
ever-growing population. At present (2010), the population of Metropolitan Manila is
estimated at about 14 million. As it is, there are telling signs that the available urban
services and facilities have deteriorated.
Table 1
(Levels, Per cent Shares, and Growth Rates)
% TO
GR (%)
% TO
GR (%)
Census of Population and Housing
National Statistics Office
Furthermore, the primacy of Metro Manila (the National Capital Region or NCR) has
brought about regional imbalance in terms of economic growth as well as urban
development. In view of this, the Philippines has adopted regional development both as
a goal and strategy in the attainment of balanced development in the country with urban
development as a critical element of the country’s regional development.
Pursuant to a Presidential instruction, the National Economic and Development
Authority (NEDA) is in the process of formulating the National Urban Policy which
aims to focus on policy measures that would strengthen the roles of urban centers in
national and regional development, as well as improve the living conditions in urban
Mindanao Cities: Gearing Towards
The Challenges of Globalization In the 21st Century
The 21st century is, indeed, expected to be a world of cities. The United Nations
projected that about half of the world’s population or over 5 billion people will be living
in urban settlements. Under the current Local Code, urban centers throughout the
Philippines are being primed to serve as new hubs for industrial development. Most
notable is the development in General Santos City, one of the cities in the Mindanao.
General Santos City has gained the status as a “boom city” with the influx of both
population and economic activities in the area. This development may be attributed to
the dynamism of local government leadership and aggressiveness of the private business
sector. In addition, other cities from the different regions in Mindanao such as Davao,
Cagayan de Oro, Zamboanga, Cotabato, and Iligan, have shown significant economic
activities. And to further enhance the development in these growth centres, a new
dimension to interregional cooperation is taking place and this is referred to as “regional
cross-border cooperation”. Better known as the BIMP-EAGA (Brunei-IndonesiaMalaysia-Philippines East ASEAN Growth Area), it is the Philippine’s initiative to
position Mindanao as a gateway to sustained international economic cooperation
(Sobrepena, 1995)19/.
Cities And Global Competition
While there has been a proliferation of academic papers and discussion concerning
globalization, a unified approach to defining the words “global city” and "world city"
has remained a difficult task. Of late, though, “global city” and “world city” have
been used interchangeably in urban and regional studies literature. The term “world
city” was denoted as the centre of specific world economies -- the logistic heart of its
activity (Braudel, 1984)20/ while others denoted “global cities” as nodal points to
coordinate and control global economic activity (Sassen, 1986)21/. Some define such
cities as the location of the institutional heights of worldwide resource allocation,
concentrating the production of cultural commodities that knit global capitalism into a
web of symbolic hierarchy and interdependence (Ross, 1983)22/.
Recent literature indicate that the factors which brought about a world-city status
include the following (King, 1990)23/: (1) strength of the economy to which the world
city belongs; (2) location in relation to zones of growth or stagnation in the international
economy; (3) attraction as a potential basing point for international capital; and (4)
population size. In an attempt to resolve the definition of “world city”, Friedman
(1986)24/ devised the following specific criteria to determine world city status: (1)
major financial center; (2) site of headquarters for transnational corporations, including
regional headquarters; (3) international institutions; (4) rapid growth of businessservice sector; (5) important manufacturing centre; (6) major transportation node; and
(7) population size. Using this set of criteria, only Metropolitan Manila is included in
the roster of secondary “world cities”. And the cities in Mindanao can hardly, as yet,
be described as global or world cities. However, certain characteristics have started
to appear pointing to the direction towards future globalization of these urban centres.
Urban Development Potentials In Mindanao Regions
In the traditional context, inter-regional planning in the Philippines aims to integrate the
development of neighboring regions within the country. With the objective of preparing
for globalization, development efforts have been outward-looking, transcending regional
boundaries, and even going beyond the geographic boundaries of the country. Thus, in
pursuit of the strategy of global competitiveness, the Ramos Government then had
initiated and decided to showcase this strategy through the development of Mindanao.
As one of the visions of his administration, the strategy of global competitiveness aims
to strengthen the country’s capacity to produce an increasing range of products and
offer opportunities comparable to those in the rest of the world by preparing Mindanao
as the Philippine’s gateway to sustained global economic cooperation.
Mindanao: Gateway To A Sustained Economic Cooperation
Located in the south, Mindanao is the second largest island in the Philippines. It
comprises about 102,043 square kilometers of land area. Ideally situated outside of the
typhoon belt, Mindanao enjoys a generally fair and tropical climate throughout the year
making it the nation’s leader in agriculture and agri-based industries. Mindanao is
composed of four administrative regions and one autonomous region comprising 23
provinces and 19 cities. Mindanao is the site of one of the world’s richest nickel
deposits, while accounting for three-fourths of the country’s iron reserves and a third
of its coal resources. Forests still cover two-thirds of the island. And apart from the
usual agri-based industries, there are heavy industries along the northern coast producing
sintered iron and steel plates. Mindanao also remains to be the “fruit basket of the
Philippines”. Coconut and banana exports contribute largely to the island’s income. It
registers a manpower reserve of 10 million with a functional literacy rate of 94 percent.
Moreover, the area is an ideal blend of vast frontiers and highly urbanized centres of
commerce and industry suitable for the development of viable tourism industry and a
business climate for investors (NEDA, 2006)25/ .
Urbanization and Urban Development Trends
Mindanao has been urbanizing significantly in recent years. Pernia et. al. (2000)26/
noted that the urbanization levels of Northern Mindanao (Region X) and Southern
Mindanao (Region XI) alone, doubled in three decades (Table 2). Outside of Metro
Manila (the National Capital Region), these regions posted the third and fourth highest
urbanization levels among all other regions in the Philippines in 2000, next to Central
Luzon (Region III) at 60.3 per cent and Southern Tagalog (Region IV)
Table 2
(In Percent)
Region I
Region II
Region III
Region IV
Region V
Region VI
Region VII
Region VIII
Region IX
Region X
Region XI
Region XII
* Not Available
Source of Basic Data: National Statistics Office
at 51.1 per cent. Worth noting are the urban growth rates of all four Mindanao regions
which posted higher than that of the national average in 1990-20007/. Western Mindanao
(Region IX) had the highest growth rate at 5.70 per cent followed by Northern Mindanao
(Region X) at 4.69 per cent.
This trend may be attributed to the fast growth of cities in Mindanao such as
Marawi City in Central Mindanao which was ranked second highest growth rate at
5.30 percent in 2000, and followed by General Santos City in Southern Mindanao
(Region XI) at 5.20 percent. Other cities in Mindanao showed notable growth rates.
Development Potentials of Mindanao
Despite its natural and human resource potentials, the utilization of the island’s land
resources is not yet fully maximized. It is also strategically situated to take advantage of
the vast and growing trade opportunities particularly with its ASEAN neighbors. The
past performance of Mindanao’s economy speaks eloquently of its potentials. Over the
past years, its percentage share in the Gross Domestic Product (GDP) has grown
steadily. This growth has been propelled mainly by industry -- the fastest growing
sector in the economy.
Mindanao Cities As Focal Points for International Trade
Despite the economic slowdown brought about by the global meltdown, and the El Nino
phenomenon, Mindanao contributed 19.8 per cent to the Philippine gross domestic
product (GDP) and registering a 2.7 percent real growth by the end of 2010. Such
economic resiliency can be accounted for by its rapidly urbanizing cities, namely:
Zamboanga, Cagayan de Oro, Davao, Cotabato, and General Santos. These cities have
grown dramatically in terms of population size and economy in the past decades. Except
for General Santos City, all four cities have been designated as regional centres, serving
as focal points for administrative and trade relations, as well as centres for health
service delivery and tertiary education.
In fact, all cities are equipped with some level of infrastructure facilities viable
for external linkages and exchanges, such as airports, seaports, road network and
telecommunication system. Over the years, Mindanao experienced the influx of
industries which are resource-based or oriented towards domestic consumption. The top
manufacturing activities include: (1) food and beverage manufacture; (2) wearing
apparel; (3) wood and wood cork products; (4) furniture and fixtures repair; (5)
industrial chemicals; (6) rubber products; (7) non-metallic mineral products; (8) iron
and steel basic industries; (9) machinery except electrical; and (10) cement. As the
cities of Mindanao prove to be viable centres of trade and external linkages, these
industries locate along its periphery. Philippine corporations which have entered the
global market have also invested in these industries, such as the San Miguel
Corporation, RFM Corporation and DOLE Philippines. To further sustain these
economic activities of the private sector, large Manila-based universal banks have
extended their services to these cities.
Because of the increase of exports of products, such as fresh and processed fruits
and canned fish, international air and seaports have been upgraded and international
flights have began. This has brought about strong economic ties between Davao City of
the Philippines and Manado of Indonesia and Zamboanga City of the Philippines and
Labuan of Malaysia, among others. From these developments, one can conclude that
these cities have begun to position themselves in the global competitive market. These
cities shall serve to catalyze the process of agri-industrialization in the suburban areas
and regions. With the increasing role of these cities in processing, service delivery,
financial transactions, transshipment activities, they shall likewise serve as gateways of
Mindanao in the East ASEAN Growth Area (EAGA). Zamboanga City’s link with East
Malaysia through Labuan, Davao City’s with Manado in North Sulawesi, Indonesia and
General Santos City’s with Maluku, Indonesia shall be intensified through trade and
cultural relations.
Mindanao and East ASEAN Growth Area
An innovative approach to urban and regional development planning is being pioneered
in East Asia (Sobrepena, 1994)28/. The approach, called regional cross-border
cooperation, adopts outward-looking, transnational solutions to domestic concerns like
depressed regions, inequitable distribution of growth and urban core-periphery relations.
It was brought to fore when China, through economic relations with neighboring
countries, attained high economic growth rates. Its underlying concepts crystallized
when Singapore initiated cooperative ties with Johore, a southern state of Malaysia and
the islands of Riau in Indonesia to form the Singapore-Johore-Riau (SIJORI) Growth
Triangle. Since then, Asian countries have increasingly tried to replicate regional
cross-border cooperation, also known as the growth triangle approach. Toward this
end, the urban centers play a major role as they are expected to stimulate growth in the
area being the existing primary centers of economic activities.
Rationale and Concept of the Planning Approach
Recent transformations in the foreign trade policies of European and Western countries
as manifested in the recent emergence of trading blocs such as the European Community
(EC) and the North American Free Trade Agreement (NAFTA) have freed these
countries from restrictions that isolated them from one another for years. In the
process, developing Asian countries have increasingly become concerned about the
impacts these changes would have on Asian exports and capital inflows. The formation
of the EC and NAFTA, therefore, created a need for counterpart Asia-Pacific groupings
in a form that had to be different from existing trading blocs because of fundamental
problems such as insufficient volume of trade among Asian countries, differences in
trade policies, similar factor endowments, geographical features and political
considerations. What has resulted are various proposals for alternative ways to group
Asian countries.
The growth triangle approach is a transnational economic zone spread over large
yet defined neighboring areas covering three or more countries. At the vertices of the
triangle are he existing centers of trade and economic activities. Within the zone, the
resource endowments of each member country are trapped based on comparative
advantage to spur overall external trade and investments and channeled through existing
vertices. In addition, these centres are mobilized to serve as linkages of opportunity,
transportation, communication, and tourism.
Hence, unless these centres are
strengthened, linkages with the other centres will not progress. This manifest the crucial
role played by cities or urban centres.
The development activities in the growth triangle are primarily implemented by
sub-national government units. In terms of utilization of foreign capital, the participants
of the growth triangle are classified either as a recipient or investing groups. Recipient
groups are countries or regions of countries which complement the inflow of foreign
investments by offering land, labor, and other natural resources while investing groups
are those which provide capital, technology, management skills and at times, access to
foreign markets.
Economic cooperation in the form of the growth triangle approach can thereupon
overcome the fundamental problems associated with the formation of a trading bloc in
Asia. Specifically, the advantages of growth triangles are (1) lesser economic and
political risk; (2) lower organizational cost; (3) wider scope of trade; and (4)
attractiveness to foreign investment (Sobrepena, 1995)29/.
Geographical Coverage
The East ASEAN Growth Area covers Brunei Darussalam, the provinces of North
Sulawesi, East and West Kalimantan in Indonesia and Sabah, Sarawak and Labuan in
Malaysia and Mindanao in the Philippines. Coverage may, however, be modified. For
instance, Southern Palawan of the Philippines showed strong interest in the EAGA
because it complements Palawan’s existing geographic and cultural ties with Sabah and
Sarawak in Eastern Malaysia.
Priority Areas of Cooperation
At the Inaugural Ministerial Meeting in March 1994, the initial priority areas identified
for cooperation include the following:
Expansion of Air Linkages. A regional air services system will be established to promote, develop and
enhance trade in the growth area with Bandar Seri Begawan as the center. The national airline of
Brunei has already been granted landing rights in the cities of Davao, Zamboanga, General Santos,
and Puerto Princesa of the Philippines. Direct flights have already been established between Manado
and Davao and between Labuan and Zamboanga.
Joint Tourism Development. There will be a separate study leading to a Joint Tourism Master Plan
based on the tourism development plan of each country. An East ASEAN Tourism Workshop for the
Growth Area has been completed in Labuan, Malaysia. This activity will be spearheaded by the
Malaysian Government.
Expansion of the Fisheries Cooperation. The Philippines takes the lead in this activity and a meeting
of public and private sector representatives of the fisheries sector from the EAGA has been completed
which assessed the status of the industry and discussed possible joint ventures.
Expansion of Sea Linkages, Transport and Shipping Services. An existing shipping system connects
General Santos City of the Philippines and Manado of Indonesia primarily to service the tuna industry.
A Philippine shipping line is now plying the Zamboanga-Sandakan route, offering both passenger and
cargo services. Indonesia, being the lead country for this activity, had organized a meeting in
Balikpapan between port and shipping authorities and the private sector participating countries
which discussed potential activities, including the possibility of a shipping route with Zamboanga and
Bandar Seri Begawan as additional ports.
It is worthy to mention at this juncture that the BIMP-EAGA initiative in Mindanao is
facilitated by the a pool of able Technical and Administrative Secretariat of the Mindanao
Economic Development Council (MEDCo) based in Davao City.
Decentralized Cities in Mindanao
Under the 1991 Local Government Code
The Cory Aquino Government, then, was interested in decentralization as a centerpiece
of public administration for a number of reasons – political as well as economic. In
particular, the administration saw three major reasons for devolution (LDAP, 1990) 30/:
(1) greater share of resources from the national government to the local government
units; (2) increased revenue mobilization and generation; and (3) local participation for
improved services.
The current Local Code is a detailed legal instrument for local autonomy as
defined in the 1987 Philippine Constitution. Its immediate greatest impact was the
creation of an “enabling environment” through which the local government units (LGUs)
could be self-governing. In the words of President Corazon C. Aquino (1991)31/, the
enactment of the Code was "... high point in our efforts as a people to strengthen
democracy and attain a sustainable development. The new law lays down the policies
and seeks to institutionalize democracy at the local level. It hopes, therefore, to
complete the initial process of empowering our people through direct participation in the
affairs of government, by allowing them the widest space to decide, initiate, and
The Code required devolution of many personnel from the national agencies and
their corresponding authorities to the LGUs. This also involved stripping the national
agencies of their “oversight” and control roles. However, national agencies retained
the duty to assist LGUs in technical and procedural matters until such time that the LGUs
could become self-sufficient.
By unleashing energies and initiatives at the front lines -- where people are -local autonomy is expected to bring about greater productivity, and broaden access to
resources and opportunities. Time will tell what the strategic impact of the Code will be.
Indeed, time will tell as the succeeding summary highlights the report from the seven
(7) rapid field appraisals (RFAs) on devolution (ARD, 1997)32/:
The First RFA of July 1992 saw local government officials adopting a “wait-and-see” attitude.
The Second RFA of January 1993 found local government officials beginning to move forward on
Code implementation, with national government agencies responding.
The Third RFA of September 1993 had problems in the devolution of personnel being solved, and the
Internal Revenue Allotment (IRA) system beginning to function.
The Fourth RFA of June 1994 demonstrated increased momentum on the part of the LGUs as they
reaped the fruits of experimentation.
The Fifth RFA of June 1995 found increased local resource mobilization, and improved service
delivery. However, national government agencies (NGAs) had not pro-actively filed new roles after
devolution was accomplished.
The Sixth RFA of May 1996 demonstrated incredible diversity. Within this diversity, the
decentralization process was diffused and deepened. LGU management was more pro-active and
developmental, and local governments and communities were insisting on more local autonomy.
The Seventh RFA of August 1997 revealed innovation, quality and relevance at the local level.
Governance in the Philippines is being redefined at the local level. The Code provides an enabling
environment that allows experimentation, participation, and differentiated service delivery throughout
the country. Despite the transition difficulties, encountered at the beginning of Codal
implementation, the redefinition of governance has allowed LGUs to better serve their communities.
A new participatory style of leadership is emerging. Decentralization through devolution under the
1991 Local Code has been an overall success.
Cities As Decentralized Local Government Units
Indeed, the setting up of decentralized form of governance can be considered a
landmark achievement in the Cory Aquino and Ramos administration. In a country
where the urban focus tends to get confused and biased in favor of large conglomerations
such as Metropolitan Manila, the empowerment of lower level units will definitely
improve policies and programs on more realistic and attainable grounds. Constituted by
law, local governments are endowed with political and corporate powers that allow
substantial control over local affairs and representation of the inhabitants of their
For its part, “cities” constitute a separate tier in the four-tiered local
government hierarchy of the country. Along with barangays, municipalities, and
provinces, they form the Philippine local government system. A city is classified as
either “highly urbanized” or component. Highly urbanized cities are completely
independent of the province and exercise total control of their own resources. They are
required to have a minimum population of 200 thousand and the latest annual income of
P50 million. Cities which do not meet these requirements are classified as “component”.
Of the fifteen highly urbanized cities, six or 40 per cent are located in Mindanao.
These include the cities of: Davao, General Santos, Cagayan de Oro, Butuan,
Zamboanga, and Iligan.
The Fiscal Opportunities for the Cities Under the Current Local Code
Among the local government units, cities are in the best position to go beyond basic
needs and undertake development projects because of their broader revenue base and
revenue authority. They can levy all impositions by municipalities and provinces;
however, they can only exceed the maximum rates allowed for the provinces and
municipalities by up to 50 per cent except in the case of professional and amusement
Cities have the power to raise and use their own income which include taxes, fees,
and charges. The biggest revenues are usually derived from real property tax and
business taxes. One of the newest local sources under the Local Code is the community
tax, replacing the old national residence tax., which has to be paid by every inhabitant
of eighteen years of age and over who is regularly employed on a wage or salary basis,
or who is engaged in business or an occupation, or who owns real estate of an assessed
value of P1,000 or more, or who is required to file an income tax return. Fees and
charges come from public utilities and enterprises owned, operated, and maintained by
cities within their jurisdictions.
Aside from locally generated revenues, local government units are entitled to
allotments coming from national internal revenue collections based on the third preceding
fiscal year, computed at a maximum rate of 40 per cent by the third year of the
effectivity of the 1991 Local Code. The shares are allocated by type or level of the local
government unit in the following manner: provinces – 23 per cent; cities – 23 per cent;
municipalities – 34 per cent; and barangays -- 20 per cent. The allocation formula
includes: population (50 per cent); land area (25 per cent); and equal sharing (25 per
Local government units also have a share in the proceeds derived from the
utilization and development of the national wealth within their respective areas. These
include shares from mining taxes, royalties, forestry and fishery charges, and other
surcharges, interests, or fines in any co-production, joint venture, or production-sharing
agreement. Any government agency or government-owned or controlled corporation
(GOCC) engaged in the utilization and development of the national wealth is also
required to share its proceeds with the local government units concerned (Panganiban,
The implications of globalization outlined in Part 2 of this paper called our attention to at
least three sets of challenges: (1) the breakdown of national regulatory power is likely to
lead to the devolution of government functions to local government units; thus, there
will be intensification of competition among regions and localities which are likely to
expand spatial inequalities; (2) the increase of the mobility of capital and business
activities will change the comparative advantage for industrial location as production
space for domestic firms expand across national boundaries; therefore, it will be a
challenging task for local government units to maintain the stability and self-sufficiency
of their local economies in the global economy; and (3) the spread of the capitalist mode
of production has also significant impact on the changes of regional and local
development because it will change the spatial structure of economic activities such as in
production, financing, R&D, management and the like which will require a different set
of location factors of production. High-tech and information industries require not only
advanced communication and information facilities and specialized services but also
high quality residential environments.
Judging not only from the spatial and urbanization trends in Mindanao, but more
so from its initiative in cross-border cooperation via the BIMP-EAGA, it is with
optimism that the cities of Mindanao are poised to face up-front the forces of
globalization in the 21st century. The issue concerning intensification of inter-regional
competition and inequalities can be addressed by the strengthening of urban-rural
linkages as demonstrated by the key development strategies as well as the three substrategies adopted in the medium-term development plan. The implementation of the
People’s Industrial Enterprises (PIEs) found parallel trends from the successful British
“new towns experiences” and Japan’s “technopolis experiences” (Masser, 1995)34/.
For practical purposes, however, it is best to be reminded of Friedman’s
attempt to settle the issue of inequalities in the context of “balance growth” as there
can never be an absolute balance in quantitative terms across space. Our general
agreement with this stance brings us to postmodern theory in politics and planning.
As Watson and Gibson (1995: 262-3)35/ emphasized, post-modern politics suggests
many possibilities. It defines an end to simplistic notions of class, alliances, or urban
social movements. It also defines an end to a politics which assumes linearity of
progress or the inevitability of revolution. No one political solution will emerge which
will be universally just. Power will be continually contested, and new and different
strategic alliances will emerge at each point of resistance. Postmodern politics
recognizes that there never can be one solution which will benefit all people in all places
for all time. Such an ideal can only lead to disappointment. Rather, postmodern politics
allows for – both marginal and mainstream -- recognizing that victories are only ever
partial, temporary and contested. At the very least, what postmodern theory has done is
to open up a plethora of ways of thinking and acting politically.
The challenges brought about by localization forces accompanying globalization
could be contained by the local governments of Mindanao cities as substantiated by the
overall success in the implementation of the current Local Code – at least during the
first six years of political decentralization. Again, following postmodern theory, this
“success story” narrative may be contested. Therefore,
the complexity of
globalization and localization forces should continue to position the national
government -- but more strongly the regional and local government units in Mindanao
regions of the Philippines to sustain exploration of progressive and rational spatial
development strategies and policies that combine the concerns for the economic, social,
political, environmental, and cultural dimensions of urbanization.
Paper virtually presented to the International Conference on Learning and Community Enrichment (ICOLACE 2010)
held on July 27-29, 2010 at Traders Hotel, Singapore.
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