Philippine Daily Inquirer
January 13, 2009
The World Bank said the Philippines reproduction program was hampered by the failure to spread the benefits of economic growth from rich cities to poorer parts of the country
In its 2009 World Development Report, the bank urged Philippine officials to correct the situation through the appropriate policies and more equitable public investments.
The bank said that in the Philippines and other middle income countries, economic development was highly concentrated in a few urban areas.
Indermit Gill, director of the World Development Report and World Bank's chief economist for Europe and Central Asia, said growth in the Philippines was highly concentrated in Metro Manila, Central Luzon, Southern Tagalog, and a few cities like Cebu, Davao and Cagayan de Oro. Many provinces in the Visayas and Mindanao significantly lagged behind, he said.
Gill said the disparity in the quality of social services and infrastructure between advanced and middle-income countries like the Philippines was blatant.
If only the rural areas enjoyed the same quality of services and infrastructure that richer ones had, then investments could be spread out, the report said.
"Economic activities will remain concentrated in a few dues, but policymakers could ensure the convergence of living standards across the country through carefully designed policy and public investments in social services like health, education, housing and social protection in both urban and rural areas," said Gill.
The World Bank economist, however; said the government should not discourage the entry of investments in urban areas and should in fact facilitate them. But he stressed that poorer provinces should be made equally attractive for investors via increased spending in education, social services and sanitation.
Bert Hofman, World Bank country director for the Philippines, said in a press conference yesterday one way to achieve "economic integration" was for the national government to revise the way internal revenue allotments for local government units (LGUs) was determined.
Currently, 40 percent of the national government's internal revenue collections are allocated to LGUs. Of the amount, 23 percent goes to provinces, 34 percent to municipalities, 23 percent to cities, and 20 percent to barangays. Details of the sharing among local governments belonging to the same category, say municipalities, are based on population size and land area. The bigger the population and land area, the bigger the IRA from the national government.
Observers said one problem with this system of computing the IRA was that the population was highly concentrated in rich cities, and so these got a bigger share of the national government revenues.
The World Bank said the Local Government Code should be amended to have the IRA computed based on actual need, not on population size.
"Poorer ones should be given more, and richer cities should have less IRA, if not none at all," Hofman said.
In its 2009 World Development Report, the bank urged Philippine officials to correct the situation through the appropriate policies and more equitable public investments.
The bank said that in the Philippines and other middle income countries, economic development was highly concentrated in a few urban areas.
Indermit Gill, director of the World Development Report and World Bank's chief economist for Europe and Central Asia, said growth in the Philippines was highly concentrated in Metro Manila, Central Luzon, Southern Tagalog, and a few cities like Cebu, Davao and Cagayan de Oro. Many provinces in the Visayas and Mindanao significantly lagged behind, he said.
Gill said the disparity in the quality of social services and infrastructure between advanced and middle-income countries like the Philippines was blatant.
If only the rural areas enjoyed the same quality of services and infrastructure that richer ones had, then investments could be spread out, the report said.
"Economic activities will remain concentrated in a few dues, but policymakers could ensure the convergence of living standards across the country through carefully designed policy and public investments in social services like health, education, housing and social protection in both urban and rural areas," said Gill.
The World Bank economist, however; said the government should not discourage the entry of investments in urban areas and should in fact facilitate them. But he stressed that poorer provinces should be made equally attractive for investors via increased spending in education, social services and sanitation.
Bert Hofman, World Bank country director for the Philippines, said in a press conference yesterday one way to achieve "economic integration" was for the national government to revise the way internal revenue allotments for local government units (LGUs) was determined.
Currently, 40 percent of the national government's internal revenue collections are allocated to LGUs. Of the amount, 23 percent goes to provinces, 34 percent to municipalities, 23 percent to cities, and 20 percent to barangays. Details of the sharing among local governments belonging to the same category, say municipalities, are based on population size and land area. The bigger the population and land area, the bigger the IRA from the national government.
Observers said one problem with this system of computing the IRA was that the population was highly concentrated in rich cities, and so these got a bigger share of the national government revenues.
The World Bank said the Local Government Code should be amended to have the IRA computed based on actual need, not on population size.
"Poorer ones should be given more, and richer cities should have less IRA, if not none at all," Hofman said.
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