Luzon is undeniably the economic powerhouse of the Philippines, being home to Metro Manila, the nation’s capital, and the hub for the country’s largest foreign investors, Filipino billionaires, and top talent. Its significance to the Philippines is unmatched. However, there is another island with the potential to not only rival Luzon but perhaps surpass it: Mindanao.
Mindanao is the second-largest island in the Philippines and is home to over 27 million people, making it the 7th most populous island in the world. This population surpasses that of countries like Australia, Taiwan, and the island of Borneo.
Despite its size and population, Mindanao has struggled to achieve its full economic potential due to long-standing conflicts and insurgencies. These issues trace back centuries but became more prominent following Philippine independence in 1946. The Muslim population in Mindanao resisted their inclusion in the newly independent republic, leading to political, economic, and social tensions. Over time, these tensions gave rise to various groups like the Moro National Liberation Front (MNLF) and the Moro Islamic Liberation Front (MILF), as well as the more radical Abu Sayyaf Group (ASG).
The Philippine government has made numerous efforts to resolve these conflicts, leading to significant peace agreements, such as the creation of the Autonomous Region in Muslim Mindanao (ARMM) and the later establishment of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) under the Bangsamoro Organic Law. These developments marked significant strides toward peace and stability in the region.
With much of the conflict now in the past, the focus can shift to Mindanao’s economic potential. Today, Mindanao is the second-largest economy in the Philippines, with an economic output valued at $53.6 billion USD, contributing 17.2% to the national GDP. If it were an independent country, Mindanao’s economy would surpass those of Iceland and Cyprus and be on par with Slovenia.
Mindanao’s economy is heavily reliant on agriculture, producing 40% of the country’s agricultural output. Key products include rubber, abaca, bananas, and pineapples. The region also has significant resources in forestry, mining, and heavy manufacturing. However, unlike Luzon, which boasts a more diversified economy, Mindanao’s economy has been less developed, with limited local reinvestment of profits.
One of the key reasons for optimism about Mindanao’s future is the government’s significant investments in infrastructure. As of August 2023, 76 out of 194 high-impact infrastructure flagship projects (IFPs) in the Philippines are located in Mindanao, with a total cost of approximately 2.4 trillion Philippine pesos. These projects include the Davao Public Transport Modernization Project, the Mindanao Railway Project, the Samal Island-Davao City Connector Bridge, and several others aimed at improving connectivity and boosting economic growth.
In addition to infrastructure, Mindanao’s proximity to Indonesia and Malaysia offers a strategic advantage for trade and economic partnerships, making it a potential gateway for international trade in Southeast Asia. The island is also rich in natural resources, providing opportunities for growth in sectors like mining and renewable energy.
In conclusion, with continued investment, peace, and development, Mindanao is poised to become a critical driver of the Philippine economy, potentially even surpassing Luzon. The region’s agricultural strength, strategic location, and natural resources make it a promising area for future growth and development.