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Camarines Sur Split: Economic Issues (Last of 3 parts)

In the first part, I discussed the profile of Camarines Sur in relation to the 5 other provinces of the Bicol Region. In the second part, I tackled the 35 municipalities and 2 cities of the province in the context of the proposed division, and how Cam Sur fares vis-a-vis the requisites of creating Nueva Camarines. In this third and last part, I will present the advantages and disadvantages of the proposed Camarines Sur split.

On the benefits, first, both new and mother provinces will have a higher combined Internal Revenue Allotment. Without the split, the old Cam Sur will receive an estimated IRA of P1.17 million. With the division, the combined IRA of reduced Cam Sur and Nueva Cam will reach a total of about P1.36 million. The computed 2012 IRA of reduced Cam Sur is P751.93 million and for Nueva Cam is P607.070 million. This is based on the study of UP Center for Local and Regional Governance. The combined IRA of P1.36 million is higher than old Cam Sur’s IRA by about P190 million, which will be taken from the share of the other 81 provinces of the country. These figures also reveal that the income classification of both new and mother provinces are within the first income category. Second, with a higher IRA for both new and mother provinces, it can be safely assumed that the per capita IRA is likewise higher than that of old Cam Sur.

Third, with 2 government structures and leaderships managing the province, development programs will be more focused on the unique needs of Districts 1, 2, 3 taken as one group and Districts 4 and 5 taken as another. Government leaders may be able to cater to the needs of the Rinconada and Partido areas much better than considering said areas within the context of Pili and Ocampo, or Cabusao and Libmanan, or Bombon and Calabanga, or Pasacao and Pamplona. Since 1 local government unit will oversee 3 districts and the other only 2, more attention will be given to remote areas, as compared to only 1 LGU going from Del Gallego to as far as Magarao, or the other side of the map – Siruma, Caramoan, Balatan.

Fourth, since the provincial capitol of Nueva Cam is proposed to be established in Tigaon, the LGU will be more accessible to locales particularly those in Districts 4 and 5. Fifth, on the side of government leaders, they will be more in touch with the needs of their constituency. Sixth, delivery of social services will be more prompt and expedient.

The disadvantages will directly hit the incumbent leadership of the province. These are some of the results of the study of UP-CLRG. First, the Cam Sur LGU will have a smaller population to serve and smaller area to cover. Its jurisdiction and power will be substantially reduced. Second, with smaller area and smaller population, tax revenues – from income taxes, real property taxes and IRA, among others – will significantly decline. Third, in the short-run, this condition will lead to decrease in social services and possible abandonment of some high-priced projects. As a remedy, and to sustain its plans, the current LGU will have to raise taxes or impose new ones. Fourth, with a smaller constituency, it will be forced to lay off employees and streamline agencies and programs.

The next set of disbenefits, according to UP-CLRG, point to Nueva Cam itself. Initially, at least for the next 3 years after its probable creation, the new province will have to spend about P280 million to set up its LGU. This amount excludes acquisition of office equipment, furnishing, installation of utilities, land improvement, among others. Sixth, P465 million will be spent for administrative expenses in 2012 alone, excluding the 20% development fund, 5% calamity fund, loan amortizations and subsidy to component towns/barangays. The sum of P745 million additional expenses of Nueva Cam is obviously much higher compared to the additional IRA of the combined reduced Cam Sur and Nueva Cam of only P190 million.

Seventh, a fragmented Cam Sur will not achieve “economies of scale” – this is a condition where a bigger economic unit, represented by the LGU, will be able to provide goods and services at minimal unit cost as compared to a smaller economic unit. Eighth, current projects located in and/or covering Nueva Cam shall be transferred to a new leadership. These projects may or may not be sustained. If they are sustained, the manner of implementation may not be as effective as the execution of the original planners. If they are not continued, funds and resources will be wasted. In an economic sense, creating a new province will double the monetary and non-monetary costs on human resources and physical capital.

Decision-makers and voters should be able to think and reflect deeply, weigh the advantages and disadvantages of creating Nueva Cam, so that a sound decision may be reached – socially, politically and economically – that is beneficial to majority of Cam Sur constituents.