Mindanao peace deal an economic boom – Stanchart

A peace accord between the government and a rebel group in Mindanao could translate to faster economic growth in the whole country, a British investment bank said.

“The entire Mindanao island group receives a positive economic spillover from the peace deal,” Standard Chartered said in a recent research note.

This, in the process, could add 0.1 percentage point this year and 0.3 percentage point by 2018 to Philippine economic growth once the peace deal’s “economic benefits” are realized. Faster growth would then translate to more jobs, it added.

In particular, the Autonomous Region of Muslim Mindanao (ARMM) Ð which groups the provinces of Basilan, Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi Ð could reach doubledigit growth rates after years of lagging behind its neighboring regions.

The Aquino administration and the Moro Islamic Liberation Front (MILF) sealed a framework agreement late last year that would essentially guide both groups in reaching a final peace pact this year.

“We believe that a complete peace deal will accelerate economic growth in the ARMM over five years, and that this will spill over to the larger Mindanao island group,” StanChart said.

“A peace deal could narrow regional disparities and place the Mindanao island group on a faster growth trajectory,” it added.

Agriculture and fishery sectors are likely to feel the immediate impact of the agreement, the bank explained, pointing to more government spending and private sector investment from both local and foreign firms in these areas.

That could directly benefit ARMM which is the island’s “chief agricultural producer,” the bank said, allowing it to match other Mindanao regions in terms of growth. More benefits will be triggered once the island “catches up” with Metro Manila’s growth rates.

Based on StanChart estimates, ARMM and the whole Mindanao could hike their per capita income to P50,000 and up to P130,000 by 2017, an increase of more than 50 percent from where they stand now.

Per capita income Ð a gauge of how much the average population earns as a result of economic growth Ð will benefit from lower unemployment rates and better productivity of the people, the bank pointed out.