Autonomy Vote Aims to End Conflict in Southern Philippines

(Bloomberg) -- Citizens in the southern Philippines will vote Monday on a proposal to give the region greater autonomy, a move the central government says will help end decades of violent conflict.

More than 2.8 million residents of the Autonomous Region of Muslim Mindanao are expected to vote on a law creating an expanded region called Bangsamoro, which provides more funding, a bigger revenue share and full control of its resources. Another round of voting will be held on Feb. 6. Some local politicians are opposing the move, refusing to cede control of their areas to a new political entity that will control the region.

It’s the culmination of two decades of talks aimed at ending four decades of insurgency that’s killed killed tens of thousands of people and stifled the development of the Philippines’ second-biggest island that has mineral deposits worth an estimated $300 billion.

“The approval of this law will signal peace, and hopefully, the Bangsamoro can hitch on the coming Mindanao boom in investments,” the head of the region’s investment board, Ishak Mastura, said by phone. The region is targeting more than 2 billion pesos in investments to come in this year following the autonomy vote, he said.

Investment Challenges

President Rodrigo Duterte has campaigned for the new region, saying it will help him deliver on his election pledge to bring peace and wealth in the southern Mindanao island. The region is located on Duterte’s home island, and on Friday in the southern city of Cotabato, he pledged to amend economic provisions in the constitution once the vote had passed.

“Your approval of this law will not only serve as an expression of your desire to end more than half a century of armed struggle in the region,“ Duterte said. “It will also serve as a testament to your determination to bring genuine peace and development in Muslim Mindanao.”

There will still be challenges for investment even if the plebiscite favors autonomy, Mastura said, including poor infrastructure and high power costs. The region has the highest poverty rate in the Philippines, with more than half of its population considered poor, based on a government survey in 2015.

Despite its problems, the autonomous Muslim region has shown some promise. Its economy grew to a record 7.3 percent in 2017, becoming the fifth-fastest growing region and beating national economic growth of 6.7 percent. Among the multinational companies that have factories, operations or plants in Mindanao are Dole Food Co. Inc., Nestle S.A. and LaFargeHolcim Ltd.

Mineral deposits are valued at more than $300 billion or about 40 percent of the nation’s total mineral reserves, according to government estimates. Still, its economy remains highly agricultural, and contributes only 1 percent to the country’s total output.

“If I were an investor, I would watch out for this region,” former peace adviser Teresita Deles said. “It has so much economic potential, and its development will help boost our economy further.”

--With assistance from Cecilia Yap.

To contact the reporter on this story: Andreo Calonzo in Manila at acalonzo1@bloomberg.net

To contact the editors responsible for this story: Clarissa Batino at cbatino@bloomberg.net, Ruth Pollard

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