Observations on the road: Northern Luzon

CROSSROADS (Toward Philippine Economic and Social Progress)

Through wide road travel, I observe mainly how economic activity takes its course. Thus, I make judgments on the main outlines of progress or decline or transformations that are happening. Here are a few of them:

“The country’s food basket.” Passing through Nueva Ecija through to Cagayan Valley leaves me impressed by the vastness of the nation’s granary. The farms are in different stages of planting, but the main crop for the most part is being harvested during summer time. Harvesting, drying, milling, transporting and warehousing the grain could be observed in snitches, although deeper observations would lead to the rice mills, traders and warehouses.

Harvest time is one of high rural employment. A lot of farmers who would otherwise be idled during the rest of the year have much to do, even with mechanization happening in some phases of the industry.

One common sight is grain spread on the shoulders of our highways. Many small and poor farmers use the shoulders as bed for sundrying the grain. To them, the road is a free resource. Palay grain laid on the roadside in the early morning is dry by mid-afternoon, and is back in grain sacks by late afternoon. The scene of sacks of palay waiting to be picked up on the road side is common occurrence.

Though it is free, hidden costs are ignored, for there are economic losses due to spillage, wind, weather and other road conditions. Improved organization of farmer institutions like cooperatives that includes more investment in grain drying and other processes would help to bring down these losses.

“How new towns grow.” When national roads intersect, that is often the beginning of a new town – the coming and going of regionally “imported” goods in exchange for the products of the region. The extent of the region’s economic specialization often produces greater efficiency in production and brings about gains in exchange.

This regional specialization is comparative advantage at work. Potential commerce materializes out of the exchange of opposing traffic of the goods. This situation often sets the stage for some savings and profitability realized from the emergence of larger commercial traffic.

Common activities that get traded are agricultural supplies and services associated with capital and machinery for use in the farm and farming establishments. These goods are produced by various communities within and outside of the province. Often, the initial prosperity comes from increases in the production of a good that is innate to the place.

Within the rice-growing regions, it is due to increasing demand for the staple and the resulting rise in productivity in farming. The rice and other grain is exported to the other regions, assuring a steady rise of sales revenues for the region of origin.

In time, this growth in commerce became strong enough to create bottlenecks in transport and other facilities, thus compelling local and national authorities to put up solutions that led to more roadways. Yet, this only further enlarges new commercial growth. As commerce thrives, so do other service industries that meet the needs of the community. The end result is the spread of small scale industrial activities that serve the region.

I imagined many such developments in the towns that I passed by which are now more prosperous. The process took place over time. Many municipalities have grown in size over the years in the prosperous towns where agricultural booms took place.

Such towns grew in numbers in Nueva Ecija, in Nueva Vizcaya, and most spectacularly in Isabela and Cagayan provinces. Agricultural prosperity in these places induced new commercial growth.

(Incidentally, this is exactly what happens when there are few or no barriers to trade. On the scale of nations, freer international trade creates more commerce. The beneficial impact is felt more widely at the national level, thus raising incomes and living standards for many.)

“Signs of rising living standards.” One of the noticeable features of Northern Luzon provinces is that shelter standards have moved up. Along the highways, one sees an evolving landscape which is hopeful. Of course there are pockets of poverty and decay even along the highway paths, but essentially one sees improved housing conditions.

Some of the houses are even quite attractive, obviously belonging to families of good means . But essentially, one sees a trend in the use of concrete blocks and plasticized shingle roofing. Although the GI sheet is still dominant, there are more shingle-roofed houses now.

My driver, Leo, whose family comes from the Bicol region, and I have engaged in conversation over this observation. The houses of the poor in the Northern Luzon areas tend to have walls made of hollow blocks, a pattern not as often observed in his region. The roofing material is also better in the northern areas. In fact, chances are, more often, the houses would have a coat of new paint compared to the bare and spare housing observed in the Bicol region, one of the poorer regions of Luzon.

These observations are corroborated by statistics that we find from the surveys of expenditure and households.

“Religion and ‘public’ finance.” Religion is a topic better left uncommented upon. Yet, there are economic aspects of the finance of infrastructure investments among religious groups that could not escape my observations.

The Iglesia ni Cristo (INC) churches are distinctive – in architectural style, structure and appearance. They stand out compared to many churches that one sees on the road. Some of the churches of other religious sectors have seen better days and are in some state of disrepair. But there is hardly any INC church – whether small, medium or grand in size – which is different from the other in terms of care, maintenance and visibility.

Churches represent the infrastructures that particular religions erect to satisfy the need of their flock. It seems that the INC has found an adequate and steady formula for mobilizing finance. They collect sufficient resources from their memberships through tithes and other contributions. (Note that these are like the taxes and revenues that governments earn from their citizenry.) They exercise sufficient discipline to finance the building of their churches as well as meet other requirements.

As a nation, there is a lot that we can learn from successful finance of highly desired investments. There must also be something to be learned from the discipline that is exercised to achieve what is required as high priority investment.

My email is: gpsicat@gmail.com. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/