With the Bangsamoro Basic Law (BBL) currently undergoing congressional review and scrutiny, it is apt to ask about the socioeconomic implications of the creation of the Bangsamoro on the other Mindanao regions.  Essentially, the expected benefits for Mindanao will primarily be on improved security, thus motivating more economic activities and harnessing the full economic potentials of Mindanao regions towards overall Philippine growth and inclusive development.

The Bangsamoro Development Plan 2015-2022 targets the Bangsamoro economy to grow by 9.7% in 2015 and 12.8 percent in 2016. The Plan is expected to push the regional economy to achieve double-digit growth rates in the first five years of the creation of the Bangsamoro, with gross regional domestic product (GRDP) per capita rising  to PhP38,000 – 40,000 from the current PhP29,608. This will further narrow the regional disparities between the Bangsamoro and the rest of Mindanao regions.


Agro-based products

Economic growth drivers will remain focused on the  current strengths of the region, with clear possibilities for infusing new investments in major economic sectors. Existing industries are generally engaged in resource-based activities such as in agriculture, aquaculture, fishery and forestry, which make up the largest industries, currently two-thirds of the Autonomous Region in Muslim Mindanao’s (ARMM) GRDP.

The ARMM is the largest producer of cassava and seaweeds in the country, fourth in corn, and sixth in coconut. Domestic and foreign market demand for seaweeds, especially its derivative, carageenan, has been strong, as these are used for a wide variety of commercial and industrial products such as dairy products, cosmetics, and food technology.




Palm oil production is likewise being eyed by both domestic and foreign investors in the vast areas of the future Bangsamoro, since Mindanao has the most suitable tracts of land in the country for palm oil

production and processing.


Retail, services, tourism

Retail and services through micro-businesses and small and medium enterprises also account for a considerable portion of economic activity but may operate in both formal and informal sectors. Retail and services sector is expected to further expand its economic base as investments are infused and more businesses enter formal markets.

As a result, the sector is also expected to significantly contribute to achieving the goal of increasing the labor force participation rate in the region to 70 percent from 55.5 percent in 2011. The tourism industry in the area is also recognized as a high-potential, job-rich sector. Tourism earnings and business capital are likely to hit unprecedented levels in the coming years.


Potential investments

Private sector investments in recent years have also registered marked improvements following the advances in the peace negotiations. As of the third quarter of 2014, the region’s investment portfolio reached PhP3.3 billion, double from the previous year.  This raises 2014 investment forecasts to reach and even surpass PhP4 billion. The most prominent investment in the ARMM in 2013, for example, was in nickel-mining in Tawi-tawi. Almost PhP1 billion has also been registered for biomass renewable energy investments in Maguindanao, according to the ARMM Regional Board of Investments.


Regional eco-zones are also planned in the region, which can attract foreign direct investments, generate employment, legitimize informal barter trade, increase forward linkages, and facilitate knowledge and technology transfers and spillovers. However, significant improvements in infrastructure development and institutional framework are necessary to support productivity of locators and encourage industrial agglomeration. Large-scale investments in areas such as construction of roads, harvest and processing facilities, can have multiplier effects, as these facilitate market linkages among regions in Mindanao.


Halal industry and Islamic banking The Bangsamoro aims to be the epicenter of the Mindanao and Philippine halal industry and certification. Since halal is both a spiritual and cultural orientation, the region has the strongest motivation to expand this industry as it is culturally linked to halal-based economies of Malaysia, Indonesia, Brunei and other Islamic countries. Given these potential trade linkages among regions and other countries, trade routes through sea and air would need to be opened, while current ports require improvements and increased capacities. Islamic banking and finance is anticipated to be piloted in the Bangsamoro, where its development is seen to fuel financial growth in the region, as well as in Mindanao.

The ARMM is currently the region with the least number of banks in the country. However, the development and institutionalization of the Islam-based financial system will be a magnet for financial investors from the Arab Region and other Muslim countries. The Bangsamoro could easily become the Islamic world’s investment center in Philippines. In addition, the improving peace and order conditions will likely increase liquidity in the area as more domestic banks will be established, offering more people greater access to financial instruments and credit, thereby expanding financial inclusion.

In summary, the establishment of the Bangsamoro could lead to three major scenarios:

  • It will likely increase economic output, employment, and investments, thereby increasing the region’s and Mindanao’s overall contribution to the national output and development;
  • As the security condition normalizes and economic activity resumes with vigor in the region, the intra- and interregional trade between and among the Mindanao regions, and with other regions in the country will be enhanced, in addition to foreign investors foreseen to inject fresh capital in the region; and
  • The sustained policies for peace and the continuing and committed investments in social, physical, economic, and cultural infrastructure will likely correct socioeconomic disparities in the region and the rest of Mindanao, raise human development, and reduce multidimensional poverty.

Furthermore, the growth rate potentials of Mindanao regions for 2016 are expected to increase as a result of the positive economic and social effects of an increasingly normalizing Bangsamoro area brought on by the eventual passage of the BBL. The statistics on the growth of the Bangsamoro and Mindanao regions, may be more concretely evaluated after 2016, but are nonetheless forecasted as positive.