Central Luzon as federal state

INSTEAD of wasting our time debating on the pros and cons of federalization, which obviously is a non-starter because of its numerous conceptual and practical flaws, it would be more productive for us to identify certain regions of the Philippines which can already be encouraged to act like federal states under the Local Government Code. There are many provisions of this Code that already permit enlightened, honest, and competent Local Government heads to constitute their respective geographical territories as de facto federal states, even without amending the Constitution. They can levy their own taxes, issue municipal bonds, partner with the private sector in building all types of infrastructures such as public school buildings, railroads, airports, toll ways, sea ports, etc., without having to go to NEDA or other national government agencies for authorization. As another enabler for greater financial autonomy, the National Government can execute the recent mandate of the Supreme Court to automatically release the Internal Revenue Allotment (IRA) due the LGU units. What President Duterte legitimately desires – to “decapitate” Imperial Manila – can be more quickly achieved through this more aggressive implementation of the Local Government Code.

If there is a region that is ready to constitute itself as a de facto federal state, it is Central Luzon with the Pampanga Triangle (San Fernando, Angeles City, and Clark) as the strategic center. It is a happy coincidence that former President Gloria Macapagal Arroyo is now the new speaker of the House and has at least the next 11 months to champion the long-term development of Central Luzon as a de facto federal state. She can use her moral authority to motivate and lead the LGU heads in Central Luzon to implement a long-term (at least the next ten years) plan to endow the region with the best infrastructures, high-quality educational institutions, and good governance practices that are indispensable for sustainable and inclusive development. I see her role there (together with Governor Lilia Pineda of Pampanga) similar to what Senator Frank Drilon played in making Iloilo City one of the most promising business centers in the Visayas today. In fact, some are hoping that before Speaker GMA retires from politics, she could have a stint as governor of Pampanga.

In 2017, while the whole national economy was growing at 6.7%, Central Luzon’s GRDP grew at 9.3%, next only to the Cordillera Administrative Region (CAR) that grew at 12.1% and Davao at 10.9%. The region is highly industrialized with industry contributing the largest share to the regional economy at 48.3% in 2017. Within the industrial sector, construction led with a whopping 22.3% growth in 2017, followed by manufacturing at 13.2%, and electricity, gas, and water at 8.5%. With these strong growth rates of the component sectors of industry, it was industry that contributed most to the region’s overall growth with 6.4 percentage points, followed by services with 2.3 percentage points and agriculture, hunting, forestry, and fishing at 0.6 percentage point. Central Luzon has the third largest population in the Philippines at 11.2 million, next only to Calabarzon (14.4 million) and the National Capital Region (12.9 million). With a population density of only 510 per square kilometer (compared to NCR of 21,000 per square kilometer), Central Luzon has much more room for further expansion and, with the appropriate infrastructures, can still count on producing most of its food requirements, especially the higher-value crops like fruits, vegetables, and livestock. Central Luzon could be an agro-industrial power in the country.

The Build, Build, Build program of the Duterte administration is highly visible in Central Luzon. For example, Angeles City has rolled out 14 road and bridge projects to alleviate traffic problems prior to the completion of the R211-billion Malolos-Clark Railway (to be built with Japanese funding) and the R13-billion expanded Clark International Airport at the Clark Freeport Zone scheduled for completion in 2020. These 14 projects include the construction of the North Luzon Expressway (NLEx)-Subic Clark Tarlac Expressway (SCTEx) Connecting Road or Abacan Expressway; the East Circumferential Road; the Furniture Village Bypass Road; Angeles Livelihood Road in the Export Processing Zone Authority; the Angeles SCTEx Toll Exit Interchange in Barangay Margot; a flyover at the Angeles-Magalang Road; and the Angeles-Porac (Pampanga)-Dinalupihan (Bataan) Road. With all these infrastructure projects, no wonder the country’s leading real estate developers like Ayala Land, Megaworld, Robinson, SMDC, Filinvest, Century Properties, and many others are investing heavily in townships, resorts, and industrial estates in the region.

The National Government is doing much to help Central Luzon become the next Metro Manila area. DPWH has started the construction of the access roads amounting to R476 billion leading to the new Clark City (NCC). Also programmed for Clark is the widening of the Clark-Angeles perimeter road, the Manila North Road, the Pulung Maragul Bridge, Pulung Cacutud Bridge, Cutud Bridge, and Telebastagan-Friendship Road. A dike is programmed to rise at the Malabanias section of the Abacan River. The projects also include the improvement of the city’s watershed in Barangay Sapang Bato. The new Clark terminal, which is expected to serve eight million passengers annually, is expected to significantly benefit Angeles City which is fast becoming a tourism, entertainment, and culinary destination in Central Luzon, attracting – in addition to foreign tourists – some of the more than 60 million domestic tourists who are discovering the many attractive sites in their own country. Mayor Edgardo Pamintuan of Angeles City declared that the 1,167 flights registered in and out of Clark from January to May in 2017 served 146,000 passengers and contributed 12,908 registered business establishments – of which 1,589 were new business ventures.

The Duterte administration has to be complimented for finally declaring the inevitable – that Clark will be the major international airport of the country to replace NAIA which is handicapped by very limited runway capacity while Clark has almost unlimited capacity because of the huge land area for further expansion. The Clark Freeport Zone is being recognized as the next aerotropolis in Asia, considering its potential to develop into an aircraft repair hub and to host other aviation-related businesses. The first Aeromart Summit held at the CFZ last April 6, 2017, was an indication that the Philippines is already being recognized as a major player in the aviation industry. The Aeromart Summit aimed at promoting the country’s capabilities in aerospace parts manufacture, aircraft MRO, and aviation training programs. It is also expected to maximize the investment and outsourcing opportunities in the Philippines, especially in Clark for aerospace and aviation by serving as the platform to expand the reach of the local aerospace industry players through business-to-business meetings. (To be continued).