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Asset mapping pre-federalism

 

This article originally appeared as a 2-part series on the author's column in The Manila Times.

 

How rich is the Philippines? How about the 81 provinces? How do we monetize our natural wealth as assets that determine the future of shifting to federal? Why should we continue to rely on income, land area and equal sharing as the defined formula in determining Internal Revenue Allotment? Do we still carry these factors in the determination or shaping of federated areas? What factors are considered in a 60-40 allocation of taxes and natural wealth in favor of federated areas? Why pursue 80-20 in favor of federated areas?

 

What is our natural capital? Do we have an environmental accounting framework in place? Why are we not incorporating environmental values into economic and political decision-making? Part of the wealth of our nation are the resources we have and yet they do not constitute a booked entry in our national accounting ledger, whether at the central level or at the provincial level. They are not monetized in our “national economic accounts,” particularly the income and product accounts (e.g., gross domestic product (GDP) and gross national product (GNP)). Recognizing that “standard of living” involves many factors—among them per capita income, protection of our environment, rate of resource depletion, and enhancement of human resources—maximizing GDP, under current definitions, is clearly a limited surrogate for maximizing “standard of living,” ‘’quality of life,” or “human welfare.” And so we think poor when we are actually rich as a nation.

 

Any environmental accounting framework should include three potential stumbling blocks: establishing definitional boundaries, estimating net physical depletion and monetization. If we are able to establish such a framework, then we can aid and ensure that any shift to federal has all the elements of success. Elected leaders, local career officers and the public would know how rich or poor a province is and hence chart a direction that takes into account the benefits of constituents. Asset mapping could also aid federated areas to define a long term development plan and not a seasonal one dependent on political winds. Constituents are also aware of the possibilities of growth in their areas and why they remain poor while others prosper.

 

In the previous column, we discussed the need to carefully study transitions so the system can withstand the shock attendant to change. We have lessons learned in CAR and ARMM and the Local Government Code. These lessons matter because transitions have not been carefully studied to ensure success of autonomy and decentralization.

 

One critical component in any shift to federal is the ability to come up with an asset list based on a mapping of existing resources, industries, products produced, exports, tourism, among others. By coming up with an asset map, a province can begin thinking of the future. Do I extract the minerals now or leverage them for the future with potential obsolescence? Should I focus on my comparative advantage? Should tourism be a driver for economic development of the province, just like Aklan? What is the wealth of Cavite when compared to Cebu and Sulu? Or of Pangasinan as compared to Bukidnon or Albay?

 

Again, the red flag is being waived here. Federalism is not just about models of asymmetry or not, not just about bicameral or unicameral legislative, it is not just about systems and structures. Rather, it is about economic viability. If we shift to federal without an asset map, how do you tell Samar that you are rich and is capable of so much possibilities but is hampered by the kind of leader you vote into office? And yet that leader does not even have a sense of Samar’s wealth.

 

There are 33 high-value crops that are produced in the country. Not all provinces produce every crop. There are crops that are only produced in a handful of provinces. Cotton is produced in two provinces—Capiz and Ilocos Norte; asparagus is produced in 6 provinces—South Cotabato, Negros Oriental, Agusan del Norte, Tarlac, Negros Occidental and Iloilo; white potato is produced in 12 provinces—Benguet, Mountain Province, Davao del Sur, Bukidnon, Nueva Ecija, South Cotabato, Cotabato, Ifugao, Sultan Kudarat, Sarangani, Negros Occidental and Isabela.

 

So, in determining the comparative advantage of each province, we include such factors as agricultural production, minerals, tourism, livestock, fisheries and export products as starting points. How do you monetize such advantages?

 

Cavite is the country’s biggest province in terms of population. Cavite is the third largest producer of rubber (cuplump); fourth largest producer of pineapple; fifth largest producer of lettuce; ninth largest producer of ampalaya and gourd; tenth largest producer of cashew, onions and chrysanthemum. Cavite has one dam (Molina Dam) and one water basin (Pasig-Laguna de Bay basin). It’s largest recorded mineral production is sand and gravel. In terms of tourism, Cavite is the 10th most visited province as of 2015 with 703,333 visitors; 66 percent, or 465,259, were domestic tourists and 238,074 were foreign travelers. Cavite is the fifth most visited province by foreign travelers. Cavite is host to natural, historical and manmade destinations.

 

Cebu on the other hand is the second largest producer of chrysanthemum, gladiola, roses and Chinese pechay; the third largest producer of mango, mango carabao and cabbage; fourth largest producer of carrots and habichuela; sixth largest producer of papaya and caulifllower; seventh largest producer of ginger, lettuce and ube; ninth largest producer of eggplant and radish; and tenth largest producer of sugarcane and sweet potato. Cebu is the fifth largest producer of Indian mackerel or alamahan in the country. It is the fourth largest producer of round scab or galunggong. In terms of livestock, Cebu is the fourth largest producer of cattle, tenth largest producer of chicken, third largest producer of chicken egg, second largest producer of goat and fourth largest producer of swine. In terms of hydro sources, Cebu has four proclaimed watersheds: Mananga River Watershed Forest Reserve, Kotkot and Lusaran River Watershed First Reserve, Buhisan Watershed Forest Reserve and Aragon River Watershed Forest Reserve. As to minerals, Cebu is the No. 1 producer of copper in the country. It is also among the top five producers of limestone. It is the sole producer of dolomite and graywacke. Cebu is also a major producer of gold. As of 2015, Cebu drew in 339,467 travelers; 64 percent, or 218,239, were domestic travelers while 120,708 were foreign visitors. Cebu is the eighth most visited province by foreign travelers. It has several natural, historical and manmade destinations.

 

Sulu is part of ARMM. It is the largest producer in the country of coffee excelsa and liberica as well as mangosteen. It is the second largest producer of durian, third largest producer of lanzones, fourth largest producer of arabica, sixth largest producer of abaca, coffee robusta and cassava. Sulu is the second largest fisheries producer in the country. It is the fifth largest producer of Indian sardine or tamban, the largest producer of round scab or galunggong, second largest producer of skip jack or gulyasan, third largest producer of yellowfin tuna or tambakol or bariles, largest producer of frigate tuna or tulong an, 4th largest producer of big-eye scad or matangbaka, second largest producer of Indian mackerel or alumahan, the largest producer of eastern little tuna or bonito. Within its municipal waters, Sulu is the fourth largest producer of big-eye scad, third largest producer of round scab and the largest producer of milkfish. In terms of aquaculture, Sulu is the largest producer of seaweed in the country. Unfortunately, the Department of Tourism did not have a record on tourist visitors for Sulu in 2015 but the province has several natural, historical and manmade destinations.

 

Three provinces and it tells you the story of the country under a unitary system. Three provinces and one can do a forecast of its possibilities under a federal Philippines. And we have not factored infrastructure in this initial effort at asset listing. Much work is to be done. Partisan politics should not define our economics for it will just be too extractive. The need to improve the lot of 26 percent of Filipinos is crucial. The same is true of retiring 50 percent of the Top 10 poorest provinces, 8 of which are in Mindanao.

 

It has been said that “Rome was not built in a day” but we fail to remember that “Rome was eventually built, and it must have been so magnificent that when people admired it, they were told that it didn’t happen in just a day. The question, then, is: if Rome was not built in a day, how was it built? Answer: It was built every day.”

 

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