Empowering LGUs: The key to unlocking regional growth in the Philippines

THE Philippines has made steady economic progress since 2010, doubling its GDP, reducing unemployment, and creating millions of jobs. Much of this growth was driven by spatial convergence, with poorer regions growing faster than richer ones. From 2009 to 2022, labor productivity in low-income regions grew by 3.2% annually, outpacing Metro Manila’s 1.5% growth.

- By Ildrim Valley and Kevin Cruz

This helped narrow regional gaps, but disparities remain large. Not all Filipinos enjoy the same standard of living. Poverty incidence is the lowest in Metro Manila (NCR), as it continues to dominate the national economy, contributing over 30% of the country's income. The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) has experienced significant progress over the past decade but continues to lag far behind. Its average worker earns just one-sixth of what a worker in Metro Manila does, with the overall income levels comparable to some of the world's poorest countries.

Bridging this gap is not only a matter of fairness; sustaining spatial convergence is essential for sustaining fast growth. At the heart of this challenge lies a powerful but underutilized force: the country's Local Government Units (LGUs).

WHY LGUS MATTER FOR GROWTH

LGUs are not just administrative units. They are the boots on the ground, the first responders to community needs, and the architects of local progress. Under the 1991 Local Government Code, LGUs were granted significant autonomy. This means they directly influence trade, investment, and access to core services like health. Their proximity to communities positions them uniquely to tailor development strategies to local needs, making them essential players in driving inclusive growth.