Where Did I Go Wrong?
Davao Occidental, Nueva Camarines, and Province Creation in the Philippines
Prince Christian R. Cruz, Ph.D. (Economics) Candidate
University of the Philippines- School of Economics
prcruz@upd.edu.ph
ABSTRACT
Under what conditions will local elites agree to divide a province? Using a simple framework, the
paper analyzes the incentives faced by rulemakers that will lead to the creation of a new province, the
highest level local government unit (LGU) in the Philippines. Factors such as the amount of rent
available, the probability and costs of winning elections, and the lobbying costs are analyzed. The
paper predicts that local elites will likely agree to create a new province if the rents in the divided
province are substantial enough to cover the huge lobbying costs, while considering the cost and
probability of getting elected. Using the cases of Davao Occidental and Nueva Camarines, the paper
provides a framework for analyzing province creation in the Philippines wherein the number of
provinces rose from 73 in 1986 and 81 in 2014.
JEL Classification Codes: H77, D72, B52
Keywords: province creation, sub-national fragmentation, federalism, rent-seeking
Acknowledgement: The author thanks Emmanuel de Dios and Raul Fabella for useful advice and
comments on the writing of this paper. Caroline Patacsil and Christina Epetia provided useful
discussions on several aspects of the paper. The overall approach and topic benefitted greatly from the
Ronald Coase Institute (RCI) Beijing 2012 Worskhop and the UPSE Institutions and Development
Workshops. Special thanks are given to John Nye and Phil Keefer for their insights shared during the
workshops. He is also grateful to Pablo Querubin for sharing his data on election results. An earlier
version of this paper (Cruz 2012), utilizing four different case studies, was presented in the 2012 East
Asia Economic Association Convention in Singapore where useful comments were provided by the
assigned discussant and conference participants.
1
1. INTRODUCTION
A province is the highest local government unit (LGU) in the Philippines. It is divided into cities and
municipalities and into one or more legislative district, whereas each district elects one legislator to
the House of Representative, the lower house. The number of provinces steadily rose from 35 in 1907
to 50 in 1945 and 73 in 1986. Since the passage of the 1986 Constitution and 1991 Local Government
Code (LGC)—Republic Act (RA) 7160—the total number of provinces has risen to 81 as of 2014.1
The creation of a new province requires the passage of a law and the approval of the majority of
voters in a plebiscite.
In the 15th Congress (2010-2013), the House of Representatives passed two bills to create new
provinces: Nueva Camarines (from Camarines Sur) and Davao Occidental (from Davao del Sur).
Only one of the bills was passed into law and was ratified by voters through a plebiscite. Davao
Occidental became the newest province in the Philippines in 2013, although it is still waiting for its
first set of elected leaders in 2016. The Nueva Camarines bill, on the other hand, only managed to
pass the second reading in the Senate, the upper house. A key difference between the two proposals is
the strong opposition of the incumbent governor of Camarines Sur in dividing the province while the
governor of Davao del Sur tacitly agreed to the creation of Davao Occidental.
Proposals to create a new province typically lead to fierce debates on the costs and benefits of
increasing the number of LGUs. While there are several valid arguments in favor or against, one of
the most dominant perspectives is that the creation of a new province is only meant to serve the
1Under
the 1991 LGC, existing sub-provinces where given the option to become separate provinces once approved in a
referendum. In 1992, Biliran and Guimaras separated from Leyte and Iloilo, respectively. The provinces of Kalinga and
Apayao under the province of Kalinga-Apayao separated in 1995. The newly created provinces are Saranggani in 1992,
Compostela Valley in 1998, Zamboanga Sibugay in 2001, and Dinagat Islands in 2007. The creation of Dinagat Islands was
nullified by the Supreme Court (SC) in 2008 but was reinstated in 2011. Two proposals for new provinces were rejected in a
plebiscite: the division of Isabela in 1995 and of Quezon in 2008. There were also several other proposals filed in 2006 that
failed to materialize: the division of Cebu into four provinces, the creation of Bukidnon del Sur (from Bukidnon), and the
creation of Northwestern Samar (from Samar). In 2006, the Autonomous Region in Muslim Mindanao (ARMM) created the
province of Sharif Kabunsuan from Maguindanao. The province was nullified by the Supreme Court in 2008 ruling that the
creation of a new province includes the creation of a new legislative district, a power given only to Congress and cannot be
delegated to the ARMM Council.
2
personal interests of the proponents, i.e. local elites create new provinces to allocate rent among them
and to ensure their continued stay in power, a form of gerrymandering.
While it is inherently difficult to prove that rent-seeking and power-preservation are the main reasons
for creating a new province, an approach taken by this paper is to seek under which conditions these
could happen. We construct a simple framework looking at the factors that will lead to the creation of
a new province if the main goal of the local elite is to allocate provincial rent among themselves. The
interaction between the lobbying costs, the amount of rent available, and the cost and probability of
getting elected are analyzed in the model by looking at the decision of the local elites in a province.
Province creation highlights the interaction among groups of local elites, and the interaction
between local and national elites. It shows under what conditions, elites will allow change or
reform to happen given that change can only happen if the elite find it in their best interest to
allow them. Using the cases of Davao Occidental as a success and Nueva Camarines as a failure, the
paper finds that the local elite is likely to agree to divide a province if the lower provincial rent caused
by the division can be compensated by higher probability of winning and lower campaigning costs.
There are potentially huge returns for the proponents of the division and this must be weighed against
the lobbying cost. The huge lobbying cost, however, may hinder some elites from proposing to divide
their province since its recovery is uncertain if the proposal fails. Most of these costs are not
quantifiable making the analysis difficult even for the proponents. The uncertainty regarding the
outcomes of the proposals also makes it risky for the proponents.
The next section reviews the literature. It is followed by a discussion of arguments for and against a
new province. The simple framework is presented in section four followed by the discussion on how
to quantify the framework. The two case studies are presented in section six. Section seven provides
some general findings on lobbying costs and the probability of winning. The last section concludes.
3
2. FEDERALISM AND PROVINCE CREATION
The main arguments in support of and against the creation of LGUs can be tied to the literature on
federalism, decentralization and the re-drawing of boundaries. The seminal paper on decentralization
by Tiebout (1956) explores how competition between LGUs can approximate perfectly competitive
markets and lead to an optimal level of delivery of public goods. Oates (1972) forwards a theorem
that formalizes the basic efficiency argument for the decentralized provision of public goods. He also
provides a solution for the trade-offs between the costs and benefits of having smaller governments.
Alesina and Spolaore (2003) analyse the optimal size and number of political units—both national
and sub-national—that is Pareto optimal under certain regimes. They find that democratization may
lead to an inefficiently high number of states, compared to a case of a central planner or a benevolent
dictator. Gomez-Reino and Martinez-Vazquez (2012) find that the number of government tiers is
mostly related to size (population and land area) variables. Further, preference for political
accountability generally leads to smaller jurisdictional size and greater number of government units.
As the number of provinces increases, there can be a better matching between the heterogeneous
needs of people and the services provided by LGUs. With more LGUs, there is a tendency that each
unit will be smaller and more responsive. With smaller sizes and better matching of services, there
can be higher accountability, referred to as allocative efficiency. The increase in the number of LGUs,
however, may lead to higher administrative costs in terms of salary of government officials and
maintenance costs for the delivery of services. Hence, having too many LGUs may lead to lower
production efficiency. The problem of the government is to find the proper balance between these two
concepts of efficiency: allocative efficiency and production efficiency (Niazi et. al., 2010).
Creation of new provinces, however, may not be driven by the desire for efficiency but by pure selfinterest of the proponents. In the public choice theory, pioneered by the likes of Buchanan and
Tullock (1962), politicians are deemed as rational economic agents maximizing rent-seeking and their
power and influence. Persson and Tabellini (2000) show several models of politicians pursuing
4
different goals such as maximizing jointly their probability of winning re-election i.e. staying in
power and the amount of rents they keep for themselves.
Looking at provinces as institutions, we can look at province creation as institutional change under the
New Institutional Economics (NIE) framework. Institutions are created to minimize uncertainty in the
society by establishing a stable but not necessarily efficient, structure for human interaction (North,
1990). It is possible that uncertainty is minimized only for those who created these institutions and are
able to maintain them even if these institutions lead to uncertainty for other players in the society.
From this perspective, institutional change happens only if the local elite find it to their best interest to
allow change to happen (Acemoglu and Robinson, 2012).
Studies on the creation of political units focus mainly on gerrymandering and redistricting (see for
instance Friedman and Holden, 2008). Less commonly observed and studied is the creation of new
LGUs such as provinces or states. Studies on the creation of new LGUs were done on Indonesia
(Fitrani et al., 2005; Kimura, 2010; Niazi et al., 2010) and Vietnam (Malesky, 2006), among others.
These studies also highlight different motives for the creation of new sub-national government units.
Unlike in the Philippines where province creation was done almost continuously, creation of LGUs in
Indonesia accelerated after the downfall of authoritarian regime of Soeharto in 1998 and the “Big Bang”
decentralization in 2001. Termed as pemekaran or blossoming, the number of provinces in Indonesia
increased from 26 in 1998 to 33 in 2008, while the number of kabupatens (districts or regencies) and
kota (cities and municipalities) rose from 319 to 510 (Niazi et. al., 2010). Malesky (2009) examines
how the local elite’s reformist strategy led to an increase in the number of provinces in Vietnam.
Gerrymandering was done to escape a Partial Reform Equilibrium (PRE) and to promote liberalization.
Internationally, there seems to be two emerging trends in terms of sub-national fragmentation and
consolidation. With an aging population and focus on fiscal sustainability, local government
consolidation is observed more commonly in developed economies such as in the US, Japan, and
5
Europe. In several emerging economies, however, LGU fragmentation is gaining ground especially
with rapid population growth and recent experience with democratization (Gomez-Reino and
Martinez-Vazquez, 2012).
While there are several books and articles on the history of individual provinces in the Philippines,
there are very few materials on the subject of province creation itself. The closest is “Fragmentation
vs. Consolidation: The Case of Philippine Local Governments” by LOGODEF (2005). It, however,
focuses mainly on the cost of putting up new provinces, municipalities, and cities. Anchored mainly
on the public choice and NIE frameworks, the paper tries to fill in this huge gap by providing a
framework to analyze the incentives faced by proponents and opponents of new provinces.
3. BENEFITS AND COSTS OF PROVINCE CREATION
The process of creation of a new province starts with a bill filed in the House of Representatives.
After passing the required votes in the lower house, it is elevated to the Senate. If there are differences
between the House and Senate versions, it must be consolidated in a Bicameral Conference
Committee. After getting through Congress, the bill goes to the President for signing into law. The
president can also veto it or allow it to lapse into law. If vetoed, the bill returns to Congress where it
will need two-thirds vote in each chamber to pass. The law must then be approved in a plebiscite
conducted by the Commission on Elections (Comelec).
Section 461of the 1991 Local Government Code (LGC) provides the requisites for a new province:
(a) A province may be created if it has an average annual income, as certified by the
Department of Finance, of not less than twenty million pesos (P 20,000,000.00) based
on 1991 constant prices and either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000) square kilometers (sq. km.), as
certified by the Lands Management Bureau; or,
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as
certified by the National Statistics Office:
6
Provided, That, the creation thereof shall not reduce the land area, population, and
income of the original unit or units at the time of said creation to less than the
minimum requirements prescribed herein.
(b) The territory need not be contiguous if it comprises two (2) or more islands or is
separated by a chartered city or cities which do not contribute to the income of the
province.
(c) The average annual income shall include the income accruing to the general fund,
exclusive of special funds, trust funds, transfers, and non-recurring income.
Aside from the phasing out of sub-provinces, the passage of the 1987 Constitution and the 1991 LGC
led to three important changes to the way LGUs are created and administered:
1. Mandatory plebiscite for the creation of new LGUs such as provinces. In the past, it depended
upon the law that created the province if there would be a plebiscite for the creation to be
approved.2 The guarantee of a plebiscite gives the people—and not the elite—the final say in
the creation of new provinces.
2. Higher budget allocation for provinces and local government units. The 1991 LGC allots 40%
of national taxes collected three years prior the current fiscal year as Internal Revenue
Allotment (IRA), the main source of funding of most LGUs. This was significantly higher
than the previous level of 20% as national government fiscal transfer.
3. Greater autonomy and responsibilities for LGUs. The higher budget was necessary for the
increased responsibilities of LGUs due to the devolution of several services. LGUs were also
granted greater autonomy. The IRA was automatically released to the LGUs, a significant
shift from the previous policies wherein approval from the national government was needed
for most actions and procurement (Diokno, 2003).
2
Although the mandatory plebiscite requirement was present in the 1972 Constitution and the 1983 LGC, political activity
under the Marcos regime was strictly restricted. The first plebiscite conducted for creation of a new province was done for
the division of Samar into three provinces in 1965. However, no plebiscites were needed for the creation of Camiguin and
South Cotabato in 1966. There was also no plebiscite for the separation of Benguet, Ifugao, and Kalinga-Apayao from the
Mountain Province in 1966. In 1967, when Davao was divided into three, there was also no plebiscite; but there was a
plebiscite for the division of Agusan into two.
7
There are two possible opposing effects of the 1991 LGC on province creation. On one hand, the
automatic release of bigger amounts to provinces may encourage the creation of more units since
there is enough money to be distributed among otherwise competing elites. On the other hand, the
bigger amount can make established elites in each province to be more protective of their share
preventing the division of existing provinces.
Harking on the allocative efficiency argument, proponents of new provinces focus on difference
between the needs in the mother province compared to proposed new LGU. The difference may be
anchored on religious, ethno-linguistic, or geographical grounds. The distance between the people in
the proposed new province and the political center of the mother province may be a valid ground for
separation. This problem can be exacerbated by geological conditions such as separation by water (in
case of islands) or mountains. Religious justifications were used for the division of Lanao into a
Christian-dominated Lanao del Norte and Muslim-dominated Lanao del Sur (Bentley, 1994). As an
archipelago, geographic reasons were used for the creation of island-provinces such as Batanes,
Camiguin, and Siquijor even if their population and land area are very small.
The way budget is allocated for LGUs under the 1991 LGC may provide additional
incentives for the creation of new provinces (Gatmaytan, 2001). Of the IRA, 23% goes to
provinces, 23% to cities, 34% to municipalities, and 20% to barangays (villages). The
allocation for provinces is divided on the basis of population (50%), land area (25%), and
equal sharing (25%). It is on the basis of equal sharing that the divided provinces will be
getting a bigger share at the expense of other provinces. Arguments in favor of a new province
can be summarized as follows:
1. Better delivery of services and better matching of needs;
2. New infrastructure and projects for the new province will lead to new jobs and development;
3. Ethno-linguistic, religious, or historical re-alignment ; and
4. Higher transfers (including IRA) from the national government to the same area.
8
People who oppose the creation of new provinces highlight the massive costs associated with
the creation of new government units. They also stress the inefficiencies and redundancies
created with too many government officials (LOGODEF 2005). With the prospect of smaller
IRA provision from the national government, existing provinces also have an incentive to
oppose the creation of new LGUs. Even so, the most common argument against proposals for
new provinces is that political reasons are the main justification for their creation. Opponents
argue that the proponents care little about the welfare of the people, instead the ruling elite
simply want to divide rents and ensure their stay in power. Arguments against creation of a new
province can be summarized as follows:
1. Higher costs and inefficiencies with more government offices;
2. High cost for the plebiscite and other start-up costs for the new province;
3. Division of the province is done to accommodate the political needs of local elites ;
4. Division of the province will weaken the lobbying power of the unified province.
It is difficult to ascertain in reality the motives behind the proposals for the creation of new provinces.
In most cases, there are multiple valid arguments in favor or against the creation of a specific
province. A track adopted by this paper is that if province creation was done solely for rent allocation
among competing groups of elites, then what are the conditions for this to happen. Unlike most of the
studies mentioned in section 2, the paper focuses on the factors affecting the decision made by local
elites in supporting or opposing proposals for a new province.
4. PROVINCE CREATION FOR RENT ALLOCATION
The difficulty in analyzing proposals to divide a province lies in the uniqueness of each case with
different players, motivations, dynamics, and circumstances. One general observation, however, is
that political dynasties are involved in the process as either proponent or opponent, or both. This is
9
hardly surprising given the dominance of dynasties in the Philippine political system (Querubin
2010). Mendoza et al. (2012) find that around 70% of representatives belong to a political dynasty.
An approach adopted by this paper is to seek under what conditions local elites will agree to divide a
province if their main goal is simply to divide the rent among themselves while keeping them in
power to assure the continuous collection of rents. To make the analysis tractable, we assume that
there are only two groups and only one position will be created: the governor of the new province.
Assume a province is divided into two districts with each district controlled by a particular group of
local elites. Using a dynasty as a unit of analysis, we assume that each group of elites is headed by a
leader whose actions represent the group. Assume further that there is a dominant group that has
established control over the province over time. For our model we assume that Group A is the
dominant player. They control the entire province and the 1st district. Group B, the emerging player,
controls the 2nd district. Assume also that the province produces a certain amount of rent, r, which can
only be accessed by the governor. The problem of the two groups is how to divide the provincial rent.
The most common set-up is a winner-take-all system wherein the two groups take part in a
competition with local elections as proxy. The winner, i.e. the elected governor gets the rent leaving
none, or very little, for the loser. The problem with this system is that there is uncertainty with the
probability of winning the election, p. Also, the total rent is reduced by the cost of getting elected, v.
Each group may spend as long as the available rent is greater than their cost (r ≥ v). Hence, the total
cost of getting elected spent by the candidates can be substantially greater than the rent, i.e., the
aggregated cost of getting elected can diminish all the possible gains from the rent (𝑣 𝐴 +𝑣 𝐵 ≥ 𝑟).
To minimize the losses from competition, the two groups can set up a contract that will set a scheme
for dividing the rents. They can alternately occupy the governor’s office while setting a fixed ratio or
amount of rent for each group. This set-up, however, has inherent completeness and specificity
problems rendering the contract unenforceable.
10
Another possible way for rent division is for the two groups to formally divide the province into two.
The groups compare the costs and benefits of dividing the province and their level of utility in each
case. Expected utility without the division or no split (NS) is given by:
E(𝑈𝑁𝑆 ) = 𝑟𝑝𝑁𝑆 − 𝑣𝑁𝑆
(1)
where E (UNS) is the expected utility without the split; r is the provincial rent3, pNS is the probability of
winning elections without the split, and vNS is the cost of getting elected under the no split scenario.4
If the province is split into two (S), then, the rent will also be divided. Let us say, that ry is the rent
accruing to group A and rx is to group B; x and y are fractions (0 < 𝑥, 𝑦 < 1) showing the size of
rent in the divided provinces compared to the undivided province. The rent in each province is
definitely lower than the rent in the undivided province (r> ry, rx). It is possible, however, that the
combined rent in the two provinces is higher than the rent in the undivided province (y + x ≥ 1).5
At this point, it is useful to differentiate the expected utility of the emerging player, B, whom we
assume to propose the split, from that of the dominant player. B’s expected utility with the split is
E(𝑈𝑆𝐵 ) = (𝑟𝑥)𝑝𝑆𝐵 − (𝑣𝑆𝐵 + 𝑙)
(2)
where l is the lobbying cost associated with the split.6 The lobbying cost is assumed to be large
because it includes the cost of convincing the national elite to pass a law to formalize the division of
the province, and the cost of campaigning to get the people to approve the division in a plebiscite.
3
The governor also receives official wages and salaries but this are significantly smaller compared to the rent. In 2012, for
instance, the salary of a governor ranges from P947,352 to P 1.02 million, depending upon the income class of the LGUs.
The salary of a representative ranges from P1.08 to P1.17 million per year.
4 In reality, the cost of getting elected and the probability of getting elected are strongly interrelated and may be determined
simultaneously. Candidates facing strong competition may increase their spending, while high pre-official campaign period
spending may deter competition. This is addressed in the model’s empirical validation.
5 In the empirical testing, we assume the rent is a certain fraction of the IRA. The combined IRA of the divided province
may be greater than the IRA of the undivided province because of the equal sharing provision.
6The lobbying cost is a one-time outlay for pushing for the division of the province while the benefits are distributed over
several years. For player B, this can be reflected more accurately as
∑𝑚 (𝑤 +𝑥𝑟 )−𝑣 𝐵
𝑗
𝑗
𝑠
E(𝑈𝑆 ) = 𝑝𝑠𝐵 𝑗=1
−𝑙
(2’)
1+𝛿
Where m is the number of terms a politician is expected to remain in power and δ is the discount factor. The higher is m the
higher a politician is willing to spend for l. The inclusion of the discount rate shows that the proponent evaluates the present
value of future rents. For simplicity, we complete the analysis using equation 2.
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B will push for the division of the province if the expected benefit from the split (𝑈𝑆𝐵 ) is greater than
𝐵
the expected benefit without the split (𝑈𝑁𝑆
), i.e.
𝐵 )
E(𝑈𝑆𝐵 ) ≥ E(𝑈𝑁𝑆
(3)
𝐵
𝐵
(𝑟𝑥)𝑝𝑆𝐵 − (𝑣𝑆𝐵 + 𝑙) ≥ (𝑟)𝑝𝑁𝑆
− 𝑣𝑁𝑆
(4)
𝐵
𝑟(𝑥𝑝𝑆𝐵 − 𝑝𝑁𝑆 ) + (𝑣𝑁𝑆
− 𝑣𝑆𝐵 ) ≥ 𝑙
(5)
Equation (5) highlights the first two main results from our simple framework:
1. B will push for the split if the huge lobbying cost can be recovered despite the lower rent in
𝐵
the divided province (rx < r), but with the assumed higher probability of winning (𝑝𝑆𝐵 ≥ 𝑝𝑁𝑆
),
𝐵
and lower campaigning cost (𝑣𝑁𝑆
≥ 𝑣𝑆𝐵 ).
2. Assuming that winning the election is guaranteed when the province is divided (𝑝𝑆𝐵 = 1) and
that the cost of getting elected is the same, equation (5) then can be re-written as
𝑟(𝑥 − 𝑝𝑁𝑆 ) ≥ 𝑙
(6)
Group B will agree to divide the province only if the ratio of the rent in the divided province
is greater than the probability of winning in the undivided province (𝑥 > 𝑝𝑁𝑆 ). Generally, if a
group’s probability of winning in the undivided province is very high, then, it is unlikely that
the group will propose to divide or support the division of the province.
If the division of the province pushes through, returns to the proponent are expected to be huge. The
proponent’s main problem, however, is determining whether the returns are big enough to cover the
lobbying cost that is also very huge. The returns to the proponent come greatly at the expense of the
dominant player. It is then expected that A will reject the proposal to split the province, as seen in
several cases wherein the governor opposed the division of the province.7
7
In the cases of Cebu and Quezon, opposition by the sitting governor played a significant role in the defeat of the proposal.
12
To a certain extent, it may come as a surprise why the dominant player, i.e., a sitting governor will
agree with the proponent in dividing his province. This was done even in cases where in the
proponent does not seem to pose a very credible threat of ousting the dominant player.
Assuming that all lobbying costs are shouldered by the proponent, the dominant player will agree to
𝐴
the division if the expected utility with the split (𝑈𝑆𝐴 ) is greater than the utility with no split (𝑈𝑁𝑆
).
𝐴
E(𝑈𝑆𝐴 ) ≥ E(𝑈𝑁𝑆
)
(7)
𝐴
𝐴
(𝑟𝑦)𝑝𝑆𝐴 − (𝑣𝑆𝐴 ) ≥ (𝑟)𝑝𝑁𝑆
− (𝑣𝑁𝑆
)
(8)
𝐴
𝐴
𝑟(𝑦𝑝𝑆𝐴 − 𝑝𝑁𝑆
− 𝑣𝑆𝐴 ) ≥ 0
) + (𝑣𝑁𝑆
(9)
Equation (9) shows that condition for the dominant player to accept the proposal. Continuing the
enumeration of key results above, we have:
3. The dominant player will agree with the split if the lower rent (𝑟𝑦 < 𝑟) can be offset by the
𝐴
𝐴
higher probability of winning (𝑝𝑆𝐴 > 𝑝𝑁𝑆
), and lower campaigning cost (𝑣𝑆𝐴 < 𝑣𝑁𝑆
).
4. If elections costs are the same even with the split, and the probability of winning in the
divided province is equal to one (𝑝𝑆𝐴 = 1), then the ratio of the rent in the divided province
𝐴
should be greater than the probability of winning in the undivided province (𝑦 > 𝑝𝑁𝑆
).
Looking at the players’ decision tree, the likelihood that the split (S) will happen is significantly
higher when groups A and B choose to cooperate (Figure 1). In all successful cases of split since
1992, the governor agreed to the proposal of one (or more) representatives to divide the province. It
was only in Isabela that the proposal lost in the plebiscite even if the parties agreed to the division.
When the dominant player chooses not to cooperate (A plays NC), there is a strong likelihood that the
proposal will fail. In most cases, the proposal either fails to get through Congress (e.g. Cebu) or the
law was rejected in a plebiscite (Quezon). There is no known case of a province created despite the
opposition of the sitting governor. There is also a strong likelihood that the proponent would stop
13
pushing for the division once the dominant player signalled his disagreement. This may account for a
significant number of proposals that were not even filed as bills in Congress.
Figure 1: Local Elites’ Decision Tree
B (new player) proposes to
divide the province
A (dominant player) plays C (cooperate).
Proposal
succeeds.
Province is
divided (S).
Examples:
 Davao
Occidental
 Dinagat
Islands
 Compostela
Valley
 Zamboanga
Sibugay
 Saranggani
 Kalinga
 Apayao
A plays NC (not cooperate).
Proposal
fails (F).
Province not
divided.
Example:
 Isabela
B continues
proposal.
Proposal
succeeds.
Province is
divided (S).
B stops
proposal
Proposal fails
(F).
Province not
divided.
A&B
compete in
next election
Example:
 Camarines
Sur
 Quezon
 Cebu
 Nueva Ecija
 Bukidnon
 Samar
5. QUANTIFYING THE MODEL
The simple framework uses four key variables: the lobbying cost, the rent, the probability of getting
elected, and the cost of getting elected. Except for the lobbying cost that we assume is shouldered by
the proponent, all the other variables were differentiated between the proponent-emerging player (B)
and the dominant player (A). We also differentiate the rent (r), the cost of getting elected (v), and the
probability of winning (p) between with split (S) and with no split (NS).
14
5.1 RENT
In empirically validating the model, we assume that B wants to create a new province in his district.
This creates a new governor’s position that we assume his group wants to control to gain access to
provincial rent. For the purpose of this paper, we define rent as the amount subject to a politician’s
spending discretion. For the governor, we assume this to be around 20% of the province’s IRA. 8 This
is based on the allocation for local development projects under section 287 of the 1991 LGC.9 This
fund, in practice, is used as pork barrel and shared among gubernatorial officials. Even if the entire
20% does not go to the governor, the province’s chief executive has other funds that he can use upon
his discretion. Disregarding the possible changes in the IRA and the discount rate, we aggregate the
20% of IRA for three years (a single term) as the total amount of provincial rent.
Aside from the rent taken from the government’s coffers, rent can also be collected by allowing the
operations of illegal activities within their jurisdictions. The difficulty of verifying the amount of rent
available to government officials, however, is inherent with its illegal nature. Another possible source
of rent is the presence of natural resources such as timber for logging and minerals for mining. Access
to seaports that can be entry points for smuggling can also be a source of rents.
For the representative, we assume the rent to be equivalent to the pork barrel—formally called the
Priority Development Fund (PDAF)—which was set at P70 million per representative per year (PCIJ,
2007). It should be noted that the calculated rents are significantly larger than the official salaries.
5.2 COST OF GETTING ELECTED
Similar to other variables in the framework, the cost of getting elected is not easily quantifiable. The
law imposes a limit on how much a candidate can spend per voter. It is common that most candidates
8
There are no known estimates on the size of rents available to provincial officials or the amount of money taken by
governors from projects funded by the IRA. On projects funded by their pork barrel, district representatives in the Visayas
“take anywhere from 12 to 20 per cent of the total project cost” with some demanding “even 25 per cent” according to
Parreño (1998).
9
According to Section 287 of the 1991 LGC: Local Development Projects – Each local government unit shall appropriate in
its annual budget no less than twenty percent (20%) of its annual internal revenue allotment for development projects.
15
exceed the mandated spending ceiling. The cost of getting elected depends highly on the opponent
and other factors such as popularity and acceptability. To compute the budget for campaigning, the
goal is to target 50% + 1 (majority of votes) of the 75% (the average voter turnout in the Philippines)
of registered voters. Of the final number, it is recommended that P200 per voter be allocated by
gubernatorial candidates and P250 per voter for congressional candidates (Go, 2006).
Another factor to be considered is the size of the fixed cost for running a campaign. For members of
political dynasties, running for an elective position is relatively easier—compared to non-dynastic
neophytes—because the huge fixed cost for setting up a working political network (Coronel et al.,
2004). The total cost spent by a father-and-son tandem running for governor and representative is
expected to be lower compared to two unrelated people running for the same positions. There is,
however, no known estimate for this fixed cost which is also likely to differ widely across the country.
To operationalize these idiosyncratic features of the electoral system, we assume that the cost of
getting elected as governor is based on the formulation by Go (2006), except that, for ease of
calculation, we use 51% of voters instead of 50% +1. The campaign cost we use is P200 per voter for
the 51% of 75% of registered voters. If that district becomes a separate province, the cost of running
for governor for a relative of the representative is assumed to be 50% lower than what Go (2006)
recommends i.e. P100 per voter instead of P200. In our two district province model, we use the lower
campaign cost assumption for the governor in campaigning in the district under their control.
An important note regarding the cost of getting elected is that it can be deemed very high once we
consider the level of political violence in the Philippines. It is not uncommon that even candidates for
the lowest elected position, the barangay kagawad (village council member) get killed. Political
violence has claimed many lives with the one of worst cases seen in the Maguindanao Massacre.10
10
In November 2009, fifty-eight people, including 34 journalists were killed when a group of armed men led by members of
the Ampatuan Family allegedly ambushed the convoy of the wife and supporters of a rival candidate who is about to file a
certificate of candidacy for governor of Maguindanao (see Human Rights Watch, 2010 for more details).
16
5.3 PROBABILITY OF GETTING ELECTED
Empirically, the probability of winning in an election is one of the most difficult to estimate even for
seasoned politicians and their strategists. On the surface it seems that the division of provinces
benefitted all or most of the proponents. There are cases wherein the proponents of the split ran
unopposed after the split.11 In several cases, however, the probability of winning after the province
was divided did not change significantly. One problem is that the framework asks for a probability of
winning ex-ante, what the data is showing is the share of total votes of the candidate ex-post.
There are also inherent endogeneity problems regarding this variable. While their probability of
winning affects their decision whether to push or support the division of the province, the division of
the province also affects their probability of getting elected afterwards. Other issues with the
probability of getting elected such as the impact of term limits are discussed in section 7.2.
For simplicity, we use as proxy for probability of winning, p, the average of the percentage of votes
received by a dynasty in running for the same position in past elections for the NS scenario. For the S
case, we assume that the probability of winning is equal to one. For new positions and in cases
wherein a player has not run for a certain position, we set the probability of winning to 50 per cent to
reflect the uncertainty over the probability of winning in the NS case. If the net gain is negative, we
also present p*, the level of p wherein the player will be indifferent between S and NS.
5.4 LOBBYING COST
Of all the variables in the model, the lobbying cost is the most difficult to quantify. Lobbying
Congress for the passage of a bill can be very high given that the stakes are similarly high. The
lobbying cost depends largely on the personal network of relationships of the proponent to individual
11An
example of this is Glenda Ecleo and her daughter Geraldine Ecleo-Villaroman when they ran as Representative and
Governor, respectively of Dinagat Islands. Priscilla Chiongbian, wife of the proponent of the creation of Sarangani James
Chiongbian, was appointed as officer-in-charge (OIC) Governor of the new province in 1992. She ran unopposed in the May
1992 and 1995 elections, and served as governor until 2001 after being re-elected for the third time in 1998.
17
members of Congress, especially to key legislative leaders. Lobbying may also be illegal in certain
cases such as the Supreme Court or paying journalists to promote their cause. Paid advertisements and
billboards may be the only quantifiable lobbying cost but this accounts very little of the total cost.
For our analysis, we just take the lobbying cost as the residual for the proponent, i.e. given the rent
and the cost and probability of winning, we infer on how much a proponent might be willing to spend
for lobbying. Section 7.1 discusses the lobbying cost further.
6. CASE STUDIES
To flesh out the simple framework provided, we present two case studies. We start with the failed
attempt to create Nueva Camarines (from hereon NCam) from Camarines Sur (CamSur). We then
present the successful case of Davao Occidental (Davao Occ.) from Davao del Sur (DdS). The
possible returns leading the players to oppose or support the proposal are presented. The net rent may
provide a hint on how big lobbying costs could be.
6.4. FAILURE: CAMARINES SUR/ NUEVA CAMARINES
In November 2010, was Rep. Arnulfo “Noli” Fuentabella of the 4th district of Camarines Sur filed in
the House of Representatives a bill to create Nueva Camarines (from hereon N.Cam) from the fourth
and fifth districts of Camarines Sur (House of Representatives, 2014). Listed as co-authors were 41
other representatives, including three of the five other representatives of Cam Sur; only the
representative of the fifth district was against the measure. One of the co-authors was Luis Villafuerte,
Sr., 3rd district representative, former governor of Cam Sur, and father of the incumbent governor,
Luis “LRay” Villafuerte, Jr.
Located in the Bicol Region, Cam Sur has a land area of 5,497 sq. km. and a population of 1,822,371
million in 2010. The proposed N.Cam would have had a population of 858,248 and a land area of
2,965 sq. km. while the new Cam Sur would have had a 964,123 people and 2,532 sq. km. Established
in 1579, Camarines was one of the oldest provinces in the Philippines. In 1829, the province was
18
divided into Camarines Sur and Camarines Norte with Camarines Sur retaining the capital Naga City.
In 1854, they were reunited once more as Ambos Camarines only to be divided, and reunited over the
next few decades. In 1920, the two Camarines were permanently separated.
Similar to the case of DdS, the Villafuertes and Fuentabellas were known as bitter political rivals in
Cam Sur. Both in power since the 1970s, the family patriarchs, Luis and Noli are political veterans. At
the time that the N.Cam bill was submitted, Noli Fuentebella was a Deputy Speaker in the House and
was at his third and last consecutive term. He represented CamSur in the Interim Batasan Pambansa
(National Assembly), with Luis Villafuerte from 1979 to 1984 and in the regular Batasan Pambansa
from 1984 to 1986. After the restoration of the bicameral Congress in 1986, he was representative for
15 years as representative of the fourth-district.12 He also served briefly as Speaker of the House of
Representatives in 2000-2001 (i-site.ph 2014).
Arnulfo and his family have been in government for a long time. His grandfather Mariano, served as
governor of Cam Sur during the American period. His father, Felix, was congressman from 1954 to
1972 under the 3rd to 7th congress. One of his uncles was legislator from 1925 to 1930 while another
was a legislator from 1910 to 1916, and from 1935 to 1945. Noli’s son, Felix William “Wimpy”
Fuentabella, warmed his House seat from 2001 to 2004 (i-site.ph 2014).
In 2010, Luis was on his last term as representative of the third district of CamSur, a position he has
held since 2004. He was governor of CamSur from 1986 to 1992 and from 1995 to 2004. His father,
Mariano represented the province from 1928 to 1934 in the 8th and 9th Philippine Legislature and
was also a former governor under the American period. Although, considered as rivals Noli never ran
directly against Luis but would often support Luis’ rival.
12
The fourth district is formerly the third district. Before stepping down as President in 2010, Gloria Macapagal-Arroyo
moved to create a new district in Cam Sur to benefit his son, Dato Arroyo, and a long-time ally, former Budget Secretary
Andaya. A new second district was carved from the then-first and second districts. Most of the areas represented by Luis
Villafuerte became the new third district.
19
After Luis reached the maximum three term limit as governor in 2004, he nominated his son, LRay, to
succeed him. LRay was pitted against Noli’s son, Wimpy, who was trounced by 95,069 votes
(246,785 versus 151,716) (Querubin, 2012; Comelec, 2014). Soon after LRay was elected, however,
he had a falling out with his father. LRay was reelected twice and was serving his last term as
governor when the proposal to divide the province was raised. Pitting father against son, LRay
opposed the division of the province and with the fifth district’s neophyte representative, Salvio
Fortuno, campaigned vigorously against N.Cam.
It is easy to establish that the Villafuertes are the dominant players in the province. The reason for
support or opposition to the division of the province can be analyzed using our framework. Rents are
positive for the Fuentebellas if N.Cam is created (Table 1). The rents are negative for LRay but
positive for Luis. The main driver of the divergence in the results for the three is their probability of
winning as governor of the undivided CamSur. For the Fuentebellas, we use as proxy for their
probability of winning the percent of votes received by Wimpy when he ran for governor against
LRay in 2004. Wimpy got 30.5% against LRay’s 49.7%. For LRay, we use 62.5% the average
percent of votes he got in the three times he ran and won as governor. For Luis, we use 48.8% the
average he got in the five times he ran for governor. There are no changes in the rents for congress as
the probabilities are unlikely to change with the division. Since LRay nor any member of his family
ran as representative in the relative new second district, we use 50% as his probability of winning.
Table 1: Returns for Proponents and Opponents of Nueva Camarines
Proponent (Rep.
Fuentabella)
Proponent (Rep.
Luis Villafuerte)
Dominant Player (Gov.
LRay Villafuerte)
GOVERNOR
Nueva Cam
Cam Sur
Cam Sur
Provincial Rent: SPLIT
393,866,266
399,812,342
399,812,342
Provincial Rent: NO SPLIT
739,122,000
739,122,000
739,122,000
Probability of getting elected: SPLIT
1.000
1.000
1.000
Probability of getting elected: NO SPLIT
0.305
0.488
0.626
Cost of getting elected: SPLIT
25,670,608
27,522,443
30,624,595
Cost of getting elected: NO SPLIT
61,973,453
61,320,296
70,100,699
Total Gain: SPLIT
368,195,658
372,289,899
369,187,747
Total Gain: NO SPLIT
163,644,942
299,085,229
392,378,580
NET GAIN for GOVERNOR
204,550,717
73,204,670
-23,190,833
20
REPRESENTATIVE
4th Dist Cam Sur/
1st Dist of Nueva
Cam
210,000,000
3rd Dist Cam Sur
210,000,000
210,000,000
210,000,000
210,000,000
210,000,000
Probability of getting elected: SPLIT
0.589
0.636
0.500
Probability of getting elected: NO SPLIT
0.589
0.636
0.500
Cost of getting elected: SPLIT
20,318,113
21,951,006
14,195,627
Cost of getting elected: NO SPLIT
20,318,113
21,951,006
14,195,627
Total Gain: SPLIT
103,316,619
111,665,042
90,804,373
Total Gain: NO SPLIT
103,316,619
111,665,042
90,804,373
0.00
0.00
0.00
Congressional Rent: SPLIT
Congressional Rent: NO SPLIT
NET GAIN for REPRESENTATIVE
2nd Dist Cam Sur
Source: Author’s calculations.
The problem with this framework is that the percentage of votes earned in the past elections is bad
predictor of probability of winning future elections. Predicting the probability of winning of a
particular candidate is a craft even seasoned politicians and their strategists cannot master. Still, the
probability of winning a divided or undivided CamSur undoubtedly plays a big role in the actions
taken by the key player. After the filing of certificates of candidacy in October 2012, it was revealed
that Luis wants to take the capitol back after LRay’s term but LRay wants to pass his seat to his son.
Luis probably thinks that the only way he can defeat LRay is by teaming up with the Fuentebellas.
If the division fails, Luis can now count on the support of the Fuentebellas and district they
represented for decades. If the division succeeds, Luis probably surmises that he can defeat LRay by
taking away his supporters from the fourth and fifth districts. The new CamSur will be left with only
three districts. The population of the third district that he currently represents in Congress is bigger
than the combined population of the first and second districts. Support for LRay from the fourth
district may be strong due to the development of tourism in the municipality of Caramoan which
brought significant amount of jobs and income to its residents. Support from the fifth district may be
gleaned from the results of the congressional elections in 2010 with LRay’s candidate (Fortuno)
narrowly winning against the candidate supported by Luis and the Fuentebellas.
With their combined influence, Arnulfo Fuentebella and Luis Villafuerte managed to push for the
passage of the bill creating N.Cam through the lower house on August 2011 with a vote of 229 to 1.
21
The lone dissenter was Fortuno of the 5th district. The battle then shifted to the Senate. It is customary
in the Philippine Congress that laws of local significance were debated more fiercely in the lower
house with the Senate’s function deemed to be ministerial. In this case, however, several senators who
traces their roots to the Bicol region objected to the proposed division. In September 2012, a Senator
even bolted the majority coalition citing his displeasure on how the Senate President allegedly tried to
railroad the bill (Tan, 2012).
Trying to break the impasse, the Chairman of the Senate Committee on Local Government, who
belonged to the same party as the proponents, offered an alternate bill wherein N.Cam would only
include the fourth district (Reyes, 2012). Under that proposal, N.Cam would only have a population of
398,422 and a land area of 2,011 sq. km., still within the minimum requirements set by the LGC. If
this proposed earlier, LRay Villafuerte might have agreed as our framework shows that the returns for
him was still positive even with the division (Table 2). Returns for the Fuentabellas would be smaller
but are still positive.
Table 2: Returns with a smaller Nueva Camarines (4th District only)
Proponent
(Rep. Fuentabella)
Proponent (Rep.
Luis Villafuerte)
Nueva Camarines
(4th district only)
285,658,636
Camarines Sur
(Districts 1-3, & 5)
508,019,972
Camarines Sur
(Districts 1-3, & 5)
508,019,972
739,122,000
739,122,000
739,122,000
Probability of getting elected: SPLIT
1.000
1.000
1.000
Probability of getting elected: NO SPLIT
0.305
0.488
0.626
8,127,245
45,065,806
48,167,957
61,973,453
61,320,296
70,100,699
Total Gain: SPLIT
277,531,391
462,954,166
459,852,015
Total Gain: NO SPLIT
163,644,942
299,085,229
392,378,580
NET GAIN for GOVERNOR
Source: Author’s calculations.
113,886,450
163,868,937
67,473,434
GOVERNOR
Provincial Rent: SPLIT
Provincial Rent: NO SPLIT
Cost of getting elected: SPLIT
Cost of getting elected: NO SPLIT
Dominant Player
(Gov. LRay Villafuerte)
The revised proposal failed to dampen the opposition to N.Cam. The debate already turned personal
with the feuds among the Villafuertes and between the Senate President and the other Senators taking
the limelight away from the real issue (Calonzo, 2012). By the time the Senate adjourned on March
22
2013, the bill failed to pass the third and final reading (Escandor, 2013). As the main proponents are
on their last term, it is unlikely that the bill will be revived in the next Congress. The battle then
shifted to the control of the province.
Term-limited, Luis ran for governor and asked his wife to run for representative of the 3rd district.
LRay tapped, Migz, his 24 year old son to fight his 78 year old father for governor. LRay, also termlimited, ran for representative in the 2nd district. Arnulfo fielded his son Wimpy for the 4th district,
while LRay drafted a popular actor to fight Wimpy. In the 5th district, Fortuno ran for reelection
against the former representative that used to occupy his seat.
Perhaps reflecting the sentiment of the people in opposing the division of Camarines Sur, political
neophyte Migz defeated his veteran grandfather, (209,547 versus 162,812) in a 5-way race. All the
other members of the Villafuerte family lost. LRay was defeated by the incumbent son of the former
president (57,106 against 49,346). In the 3rd district, Luis’ wife was defeated in a landslide by the wife
of a well-respected cabinet secretary who died in a plane crash (123,843 versus 35,160). In the 4th
district, the battle was extremely close with Wimpy Fuentabella edging by 2,225 votes (82,534 versus
80,309). Finally in the 5th district, Fortuno was reelected with a wider margin than before (75,178
against 42,295) (Comelec, 2014).
6.1. SUCCESS: DAVAO OCCIDENTAL (2013)
Davao Occidental, the newest province in the Philippines, was carved from five of the eight
municipalities of the second district of Davao del Sur (DdS). It is located in Davao Region, which was
once the Davao Province before it was divided into Davao City and the provinces of Davao del Norte,
Davao Oriental, and Davao Occidental in 1967. In 1998, Compostela Valley was carved from DdN.
The old Davao province is now the most subdivided former province.
Davao Occ. was created by virtue of RA 10360, enacted in July 23, 2013 and approved in a
referendum held on October 2013. Although Davao Occidental’s first set of provincial officials is yet
23
to elected in the next local election in 2016, it was already allotted its IRA in 2014 to be administered
by the provincial government of DdS. The municipality of Malita, which had the biggest population
and land area in Davao Occ., will serve as the capital of the new province.
Prior to division, Davao del Sur had a population of 868,690 in 2010, lower than the national average
population of 998,762 but well above the cut-off of 250,000 set in the LGC. Its land area of 4,327 sq.
km. was slightly above the national average of 4,008 sq. km. in 2010. The five municipalities of
Davao Occidental were the southernmost municipalities of DdS including the island municipality of
Sarangani (not to be confused with the province of Sarangani). The new province would have a
population of 293,780 (slightly above the minimum) and a land area of 2,163 sq. km. Davao del Sur
was left with a land area of 2,164 sq. km. and a population of 574,910. If the entire second district of
DdS became Davao Occ., the distribution of population would have been more equitable with 405,856
for Davao Occ. and 462,83 for Dds, while the area would have been 2,895 sq. km. for the new
province and 1,433 for the mother province.
The players involved in the division of DdS included political dynasties with decades of experience.
The bill creating Davao Occ. was first filed in the 15th Congress (2010 – 2013) by the representatives
of DdS, Marc Douglas Cagas of the first district and Franklin Bautista of the second district (Senate
2014). The two representatives were both on their second term (first elected in 2007). The Cagases of
the first district and the Bautistas of the second district are bitter political rivals in DdS. Marc Cagas is
the son of the incumbent governor, Douglas Ralota Almendras Cagas, a seasoned politician having
held various offices since 1984 (i-site.ph 2014).
The elder Cagas, is a nephew of former Senator Alejandro Almendras, who played a key role in the
division of the larger Davao province into three provinces. Douglas was elected Assemblyman in the
Batasang Pambansa in 1984-1986. After serving in the Ministry of Interior of Local Government at
the closing months of the Marcos Regime, he won as governor of DdS in 1988 but lost in his
reelection bid in 1992 (i-site.ph 2014). He ran again in 1995 but lost (see Table 3). In 1998, Douglas
24
ran for representative of the first district of DdS against his cousin, Alejandro Almendras Jr., who was
running for reelection. Douglas won and was successfully reelected in 2001 and 2004. After reaching
the maximum three term limit, he ran for governor in 2007 and won against Claude Bautista with a
margin of 7,576 votes (148,931 versus 141,355). In a rematch, Douglas was reelected as governor in
2010 with a slimmer margin of 3,913 votes (163,440 versus 159,527). Douglas was succeeded by his
son, Marc, as 1st district representative of DdS in 2007 (i-site.ph 2014).
Table 3: The Families of Cagas and Bautista in Davao del Sur
Years
1988-1992
1992-1995
1995-1998
1998-2001
2001-2004
Governor, DdS
Representative,
1st District
Camasura
Almendras Sr.
Almendras Jr.
Douglas Cagas
Douglas Cagas
Representative, 2nd
District
B. Bautista, Sr.
B. Bautista, Sr.
B. Bautista, Sr.
Franklin Bautista
Claude Bautista
Douglas Cagas
Rogelio Llanos
Rogelio Llanos
Rogelio Llanos
Reynerio Llanos/
B. Bautista, Jr.
2004-2007
B. Bautista, Jr.
Douglas Cagas
Claude Bautista
2007-2010
Douglas Cagas
Marc Cagas
Franklin Bautista
2010-2013
Douglas Cagas
Marc Cagas
Franklin Bautista
2013-2016
Claude Bautista
Didi Cagas
Franklin Bautista
Source: Gutierrez, Torrente, and Narca 1992, Querubin 2012, Comelec 2014.
Mayor, Malita
Franklin Bautista
Franklin Bautista
Franklin Bautista
Claude Bautista
Franklin Bautista
Franklin Bautista
B. Bautista, Jr.
B. Bautista, Jr.
B. Bautista, Jr.
The Bautistas, on the other hand, was able to ascend to the governor’s office when Gov. Reynerio
Llanos died in October 2002. Vice-governor Benjamin Bautista Jr. became governor and was
successfully elected to a full term in 2004, after defeating the Llanos’ widow. Reynerio succeeded his
brother, Rogelio Llanos, as governor after Rogelio reached his three-term limit. It was Rogelio who
defeated Douglas in 1992. Benjamin Bautista Jr. is the son Benjamin Bautista Sr., former mayor of
Malita town from 1968 to 1978, Assemblyman from 1978 to 1984, and Representative of the second
district of DdS from 1987 to 1998. After the maximum three-terms, Benjamin Sr. was succeeded by
his son Franklin, who was mayor of Malita from 1988 to 1998. After a single term in Congress (19982001), Franklin, returned as mayor of Malita, serving from 2001 to 2007. In 2007, Franklin returned
to Congress and was reelected in 2010 (Official Website of the Municipality of Malita, 2014).
Benjamin Jr., on the other hand, did not run for reelection as governor in 2007 but instead run for
mayor of Malita. After being reelected twice, Bautista Jr. was on his last term as mayor (2013-2016).
25
It was a sibling of Franklin and Benjamin Jr., Claude, who ran for governor in 2007 and 2010 against
Douglas Cagas. Claude was mayor of Malita from 1998 to 2001 and representative of the 2nd district
from 2001 to 2007.
The rivalry between the Bautistas and the Cagases is marked by political violence. In 2007, the first
election that pitted the two clans for the gubernatorial post, a shooting incident in Malita which
involved Claude Bautista, led to the death of three people (Aguirre, et. al 2007). In June 2010, a
journalist was killed by gunmen allegedly under orders of Gov. Douglas Cagas and others (TorresTupas, 2014). DdS had been declared in 2007, 2010, and 2013 as an election hotspot, places where
election-related violence are likely to occur (Tocno, 2013). The declaration allows the Comelec to
take control of the province and impose curfew. It also paves the way for the deployment of police
and military personnel to the area to provide security for the conduct of election.
After their successful reelection bids in 2010, Representatives Cagas and Bautista filed the bill calling
for the division of DdS into two. With bitter political rivals working together, the move was
welcomed as a development that can lead to peace in the region, especially during elections. Applying
the framework above, the returns for both families can be seen as positive with the division of the
province (Table 3). Although provincial rent is lower, the probability of winning is assumed to be
higher and the cost of campaigning is also lower with the division. It seems that the Cagases and the
Bautistas were hoping that they would no longer run against each other in the May 2013 elections.
The shift to automated elections, however, forced them to change their plans.
Table 3: Returns for Proponents of Davao Occidental
Proponent
(Bautista)
Davao Occidental
Dominant Player
(Cagas)
Davao del Sur
Provincial Rent: SPLIT
217,077,671
277,424,734
Provincial Rent: NO SPLIT
498,593,240
498,593,240
1.000
1.000
GOVERNOR
Probability of getting elected: SPLIT
Probability of getting elected: NO SPLIT
Cost of getting elected: SPLIT
26
0.404
0.419
6,349,653
13,426,515
Cost of getting elected: NO SPLIT
30,751,738
28,576,766.25
Total Gain: SPLIT
210,728,018
263,998,219
Total Gain: NO SPLIT
170,435,101
180,547,952
40,292,916
83,450,267
NET GAIN for GOVERNOR
The bill was passed by the House of Representatives on November 28, 2012 and by the Senate on
December 5, 2012. It was signed as RA10360 by the President on January 14, 2013. It was hoped that
the plebiscite would be done quick enough that by the May 2013 election, there can be elections for
the new province. The shift to automated elections, however, required the filing of candidacies to be
set early so that the machine-readable ballots can be printed. Instead of the usual March or April, the
deadline for filing of candidacy was moved to October of the prior year. Even if the plebiscite is done
60 days after the enactment of the law (around April), it is unlikely that elections for the officials of
the new province can be done in May 2013. Busy preparing for the local elections, the Comelec also
announced that no plebiscites will be conducted before May 2013.
The deadline for filing candidacies for the May 2013 election was set on October 5, 2012, way before
the passage of the law creating Davao del Sur. The Bautistas fielded again Claude as their candidate
for governor. His brother, Franklin, ran for reelection as representative of the second district. Instead
of running for his third and last term as governor, Douglas Cagas opted to run for Mayor of Digos
City. The Cagases fielded Rep. Marc Cagas for governor. Douglas’ wife Didi ran for representative of
the first district. Although Marc authored the bill creating Davao Occ., he changed his position and
campaigned for governor opposing the division of DdS.
In May 2013 election, Claude Bautista won over Marc Bautista with a huge margin (126,713 versus
94,420). Claude’s brothers were reelected as representative of the 2nd district and mayor of Malita.
Outgoing governor Douglas Cagas lost his bid to be mayor but his wife won the seat vacated by their
son. Marc Cagas filed a petition in the Supreme Court to stop the plebiscite but his petition was
dismissed. The plebiscite for the creation of Davao Occidental pushed through on October 28, 2013
with the Barangay Elections. Out of the 553,092 registered voters in DdS, only 235,301 votes were
27
casted for the plebiscite, with 180,162 (76.6%) voted "yes," while 55,139 (23.4%) voted "no,"
according to the Comelec. In October 2014, Douglas Cagas was arrested for the 2010 killing of a
journalist (Torres-Tupas, 2014).
7. GENERAL FINDINGS
Empirically validating the framework is relatively difficult given the nuances of each case of province
creation. In this section, we further flesh out some general findings regarding the lobbying cost and
the probability of getting elected.
7.1 LOBBYING COST
The four cases studies show that the lobbying cost differs in each case. Even with the potentially huge
returns available to the proponents of the division of Nueva Camarines, it was still not enough to
counter the huge lobbying effort exerted by the opponents. The lobbying costs include both financing
and influence-peddling. For the monetary-quantifiable cost, there is no guarantee that the huge
amount spent upfront can be recovered as the result of the plebiscite can be unpredictable. There is
huge risk involved in spending the amount that can otherwise be used for other purposes. The amount
spent for lobbying for creation of new province is significantly bigger than what the proponents spend
for their campaigns.
In terms of influence-peddling, there are three main constraints faced by proponents of new provinces:
1) convince other local elites to cooperate with them; 2) convince the national elite to pass the law;
and 3) convince the citizens to approve the law in a plebiscite.
Lobbying Congress to pass the law is difficult even without opposition from other influential groups
of local elites. Unless the proponents have the support of leaders of the executive and legislative
departments, three years is very short. Getting the approval of Congress involves creating an intricate
web of connections and relationships. An influential congressman can request the House leadership to
insert his bill in the agenda. The combined clout of Noli Fuentabella and Luis Villafuerte was able to
28
draw in as many as 40 co-authors for the Nueva Camarines bill but it was not enough to get the bill
through Senate. For Davao Occidental, there was no clear opposition to the bill in the Senate.
It is also important to note that elections are done every three years, wherein the governor and
congressmen are elected together. Further, local government officials are subject to a three-term limit,
a total of nine years. The President, however, is elected on a single term of six years. A dynasty’s
hold on a position is most vulnerable at the end of three terms. Political realignment at the national
level after a presidential election can have serious consequences on coalition building at the local
level. To get the support of the national elite, especially the president, the proponents must be able to
prove that they can deliver votes. The credibility and reputation for vote delivery can most easily be
proven by local elites with long electoral experience, best exemplified by political dynasties. In the
case of Davao Occidental, both the Cagases and the Bautistas were considered allies of the incumbent
President but only the Bautistas were members of the President’s party. In terms of CamSur, Noli
Fuentebella belongs to another party but is key member of the dominant coalition in the House as
evidenced by his position as one of the Deputy Speakers.
Proponents must also ensure that President does not veto the bill. If vetoed, the bill will require a twothirds vote in both Houses of Congress. 13 It is highly unlikely that Congressional leaders who are
typically political allies of the President will defy the veto and pass the law. In theory, the President
cannot block a move to create a new province aside from the veto. The Executive Department,
however, has other ways to support or impede the proposal. While the law is being deliberated in
Congress, lawmakers typically ask the Department of Budget and Management (DBM) to provide a
certification that funds are available to the Comelec for the conduct of the plebiscite. Lack of funds
can sway lawmakers to shelve the bill. The availability of funds, however, is subject to the level of
13
In the case of Quezon, the President allowed the bill to lapse into law. The publication of the law in the Official Gazette
was then delayed for a year. The momentum and awareness built during the campaign to pass the bill into law may be lost
due to the time lag. This can lead to additional costs for campaigning and mobilizing support which may have contributed to
its loss in the referendum.
29
support given by the President on the move. In the case of Nueva Camarines, the Executive gave
assurances that funds will be provided for the conduct of the plebiscite (Balana, 2012).
Finally, the proponents must also lobby the SC, which is most difficult because it is inherently illegal.
Constitutional challenges can derail or totally block the measure. If the proponents get the SC’s
cooperation, it simply has to do nothing on the petitions forwarded to it. In the case of Davao
Occidental, Marc Cagas was fined and declared by the Supreme Court in “contempt of court” in
March 2014. Marc accused that the Supreme Court that decision was deceitful (Macairan, 2014).14
With the shift to automated elections, the cases of N.Cam and Davao Occ. showed that the timeline
for province creation should be at least six years or two local election cycles. Proponents of new
provinces should start working on the division immediately after reelection (Davao Occ.) and not
within their last term (N.Cam). This longer timeline implies that lobbying costs will be higher and
political ties with other national politicians should be stronger.
7.2 PROBABILITY OF GETTING ELECTED
As mentioned in section 5.3, it is difficult to empirically verify the implications of the framework on
the probability of winning. Aside from the endogeneity problem, there are three other issues that must
be considered: 1) the existence of terms limit; 2) the change in constituencies involved after the split;
and 3) the existence of more than two groups in each province. These factors also have repercussions
on the cost of getting elected and the prospective payoffs.
The 1991 LGC sets a three-term limit for local government officials, a total of nine years in office.
This term limit was cited as a reason for the push for a new province. In the case of N.Cam, the
proponents of the division are officials facing term limits. Because of the limit, the proponents of the
14
In the case of Dinagat Islands, the Supreme Court flip-flopped in determining whether it was able to satisfy the minimum
requirements set by the LGC (Te 2011). The reversal of the decision was one of the grounds for the impeachment of Chief
Justice Renato Corona (Romero 2012). Although he was convicted based on other grounds, Corona’s removal left a strong
message on how the Supreme Court should deal with political decisions.
30
new province end up running for a different position after the split. Even for those running for the
same position after the creation of a new province, a change in the constituency affects the probability
of winning. It is still unclear how the probability of winning will change upon the election of leaders
in Davao Occidental. The Cagases may also be able to claim back the province of DdS in 2016.15
The simple framework also assumes that there are only two groups of local elites competing for
control of the province. In reality, there are a significant number of groups vying for control. As in
game theory, analysis of results is very difficult once the number of players exceeds two. Coalition
building can be difficult due to the lack of strong political parties and the dominance of family or
personality-based politics.
8. CONCLUSION
Over a century, the number of provinces in the Philippines has more than doubled from 35 in 1907 to
81 in 2014. By using a simple framework showing the payoffs with and without the division of a
province, the paper shows that it is possible that provinces can be created even if the main goals of the
proponents is to allocate rents among themselves and prolong their stay in power. For the proponent,
the huge lobbying cost is evaluated against the smaller rent in the divided province, the higher chance
of winning, and the lower cost of getting elected. For the dominant player, the lower rent in the
divided province is weighed against the lower campaigning cost and the higher probability of getting
elected. With Davao Occidental successfully created while Nueva Camarines will likely never be
created, Noli Fuentabella might be asking “where did I go wrong?”
The paper shows that it might be in the composition of the proposed new provinces. If N.Cam only
included the fourth district which is his usual bailiwick and not the fourth and fifth districts, the
15
Take for instance the case of Compostela Valley. As representative of the 1 st district of DdN, Rogelio Sarmiento
represented the municipalities of Moncayo, Montevista, Compostela, Nabunturan, New Bataan, Mawab, and San Mariano
(Maragusan). After the creation of ComVal in 1998, he represented its first district which now excludes Nabunturan and
New Bataan. As representative of DdN, Sarmiento received 61% of votes in 1992, improving to 98.6% in 1995. As ComVal
representative, he only received 53.3% of votes.
31
proposal might have been more palatable for the dominant players in the province. The paper also
shows that the approval of an incumbent governor in dividing the province implies waning dominance
as seen in Davao del Sur.
Aside from the two cases studies presented, the framework can likewise show the payoffs faced by
proponents and opponents of other proposals for new provinces. The framework can also be used to
analyze other political phenomena such as the relative ease of creating legislative districts or the
conversion of municipalities into cities. It can be shown that there is almost no loss for the dominant
players in these cases while the returns remain huge.
The impact of recent political developments on province creation is still unclear. In November 2013,
the Supreme Court declared the pork barrel and any similar funding structure as unconstitutional
(Rappler, 2013). The pork barrel was traditionally regarded as one of the privileges of lawmakers. In
the past, creation of new legislative districts was a key factor in the creation of new provinces (Cruz,
2014). Its nominal abolition can lead the local elite to be more protective of their other source of rents,
the provincial budget. This indirectly discourages province creation. Further, the decision in voiding
the pork barrel shows that the current Supreme Court is less accommodating of state actions favoring
traditional politicians. The contempt of the current Supreme Court of political dynasties was also seen
in the dissenting opinion on Dinagat Islands, which sends a message that similar moves in the future
will no longer be accommodated.
32
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