Government should invest more in rural development

THE Duterte government should spend more on rural development and adopt policies supporting entrepreneurs in the countryside to improve its chances of convincing people to remain in or relocate to the provinces. Without resources and policy support, the Balik Probinsya, Bagong Pag-asa Program or return to the provinces program faces headwinds that might keep it on the ground.

Balik Probinsya, which is championed by Sen. Christopher Lawrence “Bong” Go, became official by virtue of an executive order. The program has appeal, given the drawbacks of residing in cities. Metro Manila, in particular, can be stressful, polluted and in a health crisis, perilous. Densely populated areas offer prime conditions for diseases to spread quickly.

In contrast, countryside living can seem nostalgic. Imagine no traffic congestion, which costs the Philippines about P4 billion daily before the pandemic. Overall quality of life would be better with clean air and less stress.

The likely peg for the program is Davao City, which is home to Mr. Go and President Rodrigo Duterte. Davao is a rapidly growing metropolis that has many of Metro Manila’s amenities but few of its disadvantages. Of course, Davao is not perfect, but the Philippines might arguably be better off if more provincial cities can match its level of development.

Can that be done? Not without hefty government support and leadership. Such a program has to be government-led because it goes against fundamental economic principles. For instance, cities offer economies of scale, and the clustering of suppliers and customers yield added efficiencies.

The most urgent government tasks would be to improve energy security and internet services in rural areas. Of course, there are other infrastructure needs, but without reliable and affordable electricity supply and connectivity, productivity will remain low. And with low productivity comes low wages or earnings, a problem many people hope to reverse through urban migration.

To be fair, the Philippines has improved electricity access to about 90 percent as of 2016, according to an Asian Development Bank working paper. Rural electrification, though, lags at 85 percent.

Lingering problems include high cost because electricity in rural and off-grid areas relies on diesel fuel, an imported good. On top of that, supply is often unreliable. Rotating outages and unexpected power surges are typical in provincial areas, including Davao City.

Naturally, the internet will not work without electricity. But even if the power is on, connectivity is slow and expensive. Granted, this is true nationwide, but the situation is worse in rural areas.

To address that, the Philippines needs some 50,000 additional telecommunication towers. The government has reduced the bureaucratic requirements to build cell towers, but construction is still progressing sluggishly.

Also, the country needs a satellite overlay to complement the terrestrial information communication technology infrastructure. But with pandemic relief burning cash, a space program may not seem like a priority to lawmakers.

Policy changes

In terms of policies, the government should help small businesses gain access to capital. Banks are mandated by law to provide loans to micro, small and medium enterprises (MSMEs), but those facilities are not maximized. That needs fixing.

The government should look at backing MSMEs loans, especially for those in the provinces. That might encourage more banks to relax their requirements on collateral and paperwork.

Moreover, the government should include those returning to their home provinces in the priority list of people who can be vaccinated. For now, the only way returnees can get that protection is by belonging to Group A along with seniors, frontline personnel and people with comorbidities. Inoculations for those in Group B have not even started.

Including those returning to the provinces in Group A would also help prevent Covid-19 from spreading further to the provinces, where health care facilities are likely inadequate and underdeveloped. That would also signal how serious the government is in decongesting Metro Manila (National Capital Region or NCR).

That has been a goal of many past governments, to decongest the NCR through rural development. And if this government is to succeed where others have failed, it needs to provide what was neglected or was slow to deliver in the past.