If the secession in Mindanao becomes a reality, investments in the region may be put at risk, an economist stated.

Any political noise and uncertainty in policies will be taken into consideration by the investors as it would affect the profitability of their businesses, said Michael Ricafort, chief economist at the Rizal Commercial Banking Corp.

For context, former president Rodrigo Duterte earlier called for the separation of his home region Mindanao from the Philippines.

This was immediately thumbed down by the government, including the Armed Forces of the Philippines and other factions in the legislative department, citing its “unconstitutionality” and the economic impact it would make on the region.

“Investors would like predictability on their investments, business operations, and other exposures and to continue operating profitably in the country,” Ricafort said in a Viber message.

The Marcos administration has been pushing for the “land of the promise” to turn into an economic powerhouse by boosting infrastructure and transportation on the island.

For infrastructures, there are currently 30 out of the 194 high-impact Infrastructure Flagship Projects (IFPs) approved by the National Economic and Development Authority (NEDA) Board that are intended to support investments in Mindanao directly.

These include the Mindanao Railway Project, Samal Island-Davao City Connector Project, Cagayan de Oro Coastal Road, Davao City Expressway, and preparation for New Zamboanga Airport, Bukidnon Airport, and New Siargao Sayak Airport.

Mindanao economy by region

With a larger base on the agriculture sector, Mindanao’s economy continued to improve, posting a 7.2 percent growth in 2022, based on the data from the Philippine Statistics Authority. It is also higher than the 6.3 percent performance in 2021.

Despite this, the regions with the lowest economic growth are located in the Mindanao region specifically Caraga with a 5.9 percent growth.

Only the Davao region surpassed the 7.57 percent national level gross domestic product (GDP) with a performance of 8.15 percent. Most Mindanaoan regions either struggled or did not make the cut.

Some regions' per capita GDP even posted poor performances that can be equaled with those of the poorest nations. Only the Davao region and Zamboanga peninsula exceeded the national level at 6.6 percent and 6.81 percent, respectively. 

Given these low figures surrounding Mindanao’s growth, would it even affect the country’s economy at a national level? Ricafort said the issue lies not with the “volumes” but with “the continuity and certainty of policy as a signaling.”

“How would generate and sustain revenues in view of expenditures. Would it be united or would there still be factions that would complicate governance,” he stated.

What now

As of now, most Mindanao leaders rejected the idea of secession, noting that peace talks with revolutionary forces have been easing with the current administration.

It will also complicate the costs of doing activities in the area, National Economic and Development Authority Undersecretary Rosemarie Edillon, citing for instance the need for visa or passport.

She said that the Bangsamoro Autonomous Region, one of the poorest regions in Mindanao, acknowledged that the island's economy intertwined with the rest of the country.

Governors of Tawi-Tawi, Basilan, Lanao del Sur, and Maguindanao earlier affirmed to achieving "full-scale development" of the provinces under their jurisdiction.