You are on page 1of 12


PII: S0264-2751(98)00016-X

Cities, Vol. 15, No. 4, pp. 245256, 1998 1998 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0264-2751/98 $19.00 0.00

Todaro migration and primacy models:

Relevance to the urbanization of the Philippines
Javier Calero Cuervo
School of Building and Real Estate, National University of Singapore, 10 Kent Ridge Crescent, Singapore, 119260

David H O Kim Hin

Research Department and the Information Services Department, Pidemco Land, 1 Temasek Avenue, 3001 Millenia Tower, Singapore, 039192

This paper looks into the set of factors that develop the urbanization of the Philippines, a fastgrowing developing economy in South East Asia. The paper demonstrates that the migration primacy urbanization model is an appropriate one that is able to explain the urbanization case in the Philippines. The model draws supporting evidence from rank size distribution analysis of major cities in the Philippines, a detailed examination of historical, geopolitical and economic forces which have evolved in the development of the Philippines as a sovereign state, and the applicability of the Todaro model on rural urban migration to the Philippines. To address the problem of regional growth disparity, in particular the persistent growth divergence between the primate city of Metro Manila relative to other cities, a helpful policy prescription would be the adoption of a regional decentralization policy by the central planning authority. This should decentralize economic and population activities away from the primate city into other regional cities. 1998 Elsevier Science Ltd. All rights reserved
Keywords: Todaro model, primate city, urbanization, Philippines

According to a United Nations report, Metro Manila attracts the largest number of migrants from different parts of the country adding about 1 million persons to its population every ve years (UN, 1986; Dutt et al., 1994). While the total urban population of the Philippines increased yearly on average by 5.14% from 1980 to 1990, the rural population only increased by 0.58% for the same period (National Statistics Ofce, 1994). This paper seeks to demonstrate the unique urbanization of the Philippines and to relate this empirical case study to the theoretical discussion of migration and primate cities. The Todaro migration model is also examined to gain an insight of the associated driving forces and outcomes of urbanization in the Philippines.

Much has been written on the urbanization of the Philippines and Asia. Laquian (1977) states that although it may still be domestic employment that ultimately determines migration, one must also consider whether or not those opportunities were provided by foreign or domestic capital. A case in point is the effects of overseas remittances on migration, such that migration to cities from agricultural areas could be reduced as overseas remittances to the provinces could lower the differential between rural and urban income levels, thus lowering the incentive to migrate. However, this extra income could also be just the amount needed to push the rest of the family above the threshold level and make them capable of surmounting the costs of migration (Laquian, 1977). The observations of Laquian are strengthened by the ndings of Doeppers (1984): the rates of

Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin

mobility tended to be highly dependent upon foreign demand for Philippine export commodities for this in turn strongly inuenced the level of consumer expenditures, government revenues, and the demand for workers in particular elds, as well as affecting the patterns of capital investment. Moreover, Manilas economy was (and is) strongly inuenced by the character and magnitude of export demand, but it was also complex and differentiated enough to render simplistic the notion of reexive dependency A challenge to the conventional view of the urban transition was put forward by the position of Ginsburg and McGee in McGee (1991):
in the Asian context the conventional view of the urban transition, which assumes that the widely accepted distinction between rural and urban will persist as the urbanization process advances, needs to be re-evaluated. Distinctive areas of agricultural and nonagricultural activity are emerging adjacent to and between urban cores, which are a direct response to pre-existing conditions, time space collapse, economic change, technological developments, and labor force change occurring in a different manner and mix from the operation of these factors in the Western industrialized countries in the nineteenth and early twentieth centuries.

Western economies was also used to explain the migration patterns in the Third World (Lewis, 1994). The Lewis model, however, was criticized for its failure to adequately explain the urbanization pattern of a Third World country (Todaro, 1994). The criticism of the Lewis model, based on available evidence, comprises the following: (1) not all prots are reinvested in the urban sector, or in labor absorbing industries (ie the experience of capital ight in Third World countries); (2) there is a substantial unemployment and underemployment situation in the urban areas. This is also seen in the fairly large informal sector in many Third World countries; and (3) the competitive modern sector labor market does not guarantee a full transfer of surplus rural labor to the urban modern sector. In fact, institutional factors (eg union bargaining power, civil service wage scales, and MNCs hiring practices) tend to negate whatever competitive forces that might exist in Third World modern sector labor markets. The evidence of increasing migration of the rural population into urban areas in Third World countries despite high unemployment and underemployment situation in the urban areas questions the full applicability of the Lewis model to explain the process of development in Third World countries. To address this issue, Michael Todaro developed the Todaro migration model of rural urban migration to explain the apparently paradoxical relationship of accelerated rural urban migration in the context of rising urban un(under)-employment (Todaro, 1994). Four basic characteristics are implicit in the Todaro migration model: (1) migration is stimulated primarily by rational economic considerations of relative benets and costs, mostly nancial but also psychological; (2) the decision to migrate depends on expected rather than actual urban rural real wage differentials, where the expected differential is determined by the interaction of two variables, the actual urban rural wage differential and the probability of successfully obtaining employment in the urban sector; (3) the probability of obtaining an urban job is directly related to the urban employment rate and thus inversely related to the urban unemployment rate; and (4) migration rates in excess of urban job opportunity growth rates are not only possible but also rational and even likely in the face of wide urban rural expected income differentials. High rates of urban unemployment are therefore inevitable outcomes of the serious imbalances of economic opportunities between urban and rural areas in most underdeveloped countries. The pattern of urban development for the Philip-

In an analysis of the ASEAN region from 1960, McGee and Greenberg (1992) reveal two trends. First, urbanization levels in ASEAN countries are rapidly increasing. By the year 2000, almost 40% of the population will be urban residents. Second, these accelerating processes are creating giant urban regions, called Extended Metropolitan Regions (EMRs). The situation of Metro Manilas spilling over into a wider region beyond its ofcial borders over time is a case in point of the EMRs (Ocampo, 1995). This paper proceeds to explain the migration, primacy and rank size distribution concepts. Then it looks into the urbanization history of the Philippines. This is followed by the economic policies that have inuenced the urbanization process in the country. Finally, the implications of the Todaro model for the Philippine case are presented.

Migration concept
History has shown that a movement of labor from the rural area/agricultural sector to the urban area/industrial sector evidenced the economic development of 1819th century Western economies. This rural urban migration pattern was mainly brought about by the increase in productivity of the agricultural sector and the increasing demand for labor needed by an expanding industrial sector. The comparatively better nancial and sociopolitical environment offered by the urban area compared to the rural area also added to the decision to migrate. This historical pattern of labor movement in the

Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin

pines prior to its independence in 1898 dates back to the 16th century under European colonial administration. Urban development originated from port based, export oriented activities which existed largely to meet the manufacturing and mercantile needs of the colonizer. Most cities in the Philippines started out as one large city, invariably along a riverine or coastal location for ease of communications and transportation to perform the main urban functions: the export and import of raw materials to and from the particular colonizer and housing both the military and the colonial administrators. A large number of these cities have grown to become primate cities, the pivotal role of which can be gauged by the large urban population. Such primate cities are evident in countries like the Philippines (Manila), Thailand (Bangkok) and South Korea (Seoul) (Parai and Dutt, 1994, p 374). For example, the primacy of Bangkok in Thailand is impressive: it is 45 times the size of Chiang Mai, the next populous city (McGee and Greenberg, 1992). Cheema (1991) notes that urban primacy in the Asian countries has been increasing during the past two decades. This increase is indicated by the percentage of the urban population in cities of more than half a million people, and the four-city index of rst-city primacy. The observation of McGee and Robinson (1995) reinforces the presence of primate cities in Southeast Asian countries: There is general scholarly agreement that the history of Southeast Asian urbanization is different from that of North America and European countries. The distinctive history of colonial incorporation and dependent development within the world system has created an urban settlement pattern dominated by primate cities such as Bangkok, Manila and Jakarta.

The overall growth rate was 3.05% from 1960 to 1970 and this rate dropped to 2.79% from 1970 to 1980 and then to 2.33% from 1980 to 1990. The urbanization level rose from 32.8% in 1970 to 37.3% in 1980 and then up to 48.8% in 1990. The urbanization of the Philippines continued with Metro Manila accounting for a large percentage of the countrys urbanization. Viloria (1971) observes that the whole Manila metropolitan area serves as a powerful magnet for migrants, as evidenced by the rapid growth of Rizal province, especially those portions that are adjacent to Manila. What we are witnessing in Greater Manila therefore is a process of metropolitanization. The already congested city has burst its seams, and its continued growth has sprawled over to its surrounding areas. True enough, a quarter of a century after the observation of Viloria (1971), Ocampo (1995) shows that
Metro Manila, comprising four cities and thirteen towns in what is otherwise known as the National Capital Region (NCR) of the Philippines, has been growing rapidly during the past few decades. But population and urban growth has been faster in some towns just outside Metro Manila, especially in the provinces immediately to the south and east. For instance, Rizal to the east, and Laguna and Cavite to the south, have been growing faster than Metro Manila since 196070, when their average annual growth rate (5.2%) overtook that of the NCR (4.9%). This rate peaked at 6.3% during 197580 and then declined to an average of 4.3 per cent a year in 198090.

Primacy concept
While the overall growth rate of the Philippine population has been slowing, the urbanization level of the country has been steadily increasing (see Table 1).
Table 1 Urban rural distribution of Philippine population Census year Total population (millions) Overall growth rate Urbanization Tempo level

Thus, while Metro Manila accounted for only 9% of total population in 1960, this actually increased substantially with Metro Manila accounting for 13% of total population by 1990. The growth rate of the population in Metro Manila was consistently greater than the population growth rate of the Philippines (see Table 2). These trends in the urbanization of the Philippines suggest that urban concentration increased consider-

Urban population level (millions) 1.0 1.3 3.4 5.2 8.1 12.0 14.0 18.0 29.6

Urban population growth rate

Rural population level (millions) 6.6 9.0 12.6 14.0 19.0 24.6 28.0 30.2 31.1

Rural population growth rate

1903 1918 1939 1948 1960 1970 1975 1980 1990

7.6 10.3 16.0 19.2 21.1 36.6 42.0 48.2 60.7

na 2.05% 2.12% 2.05% 2.91% 3.05% 2.79% 2.79% 2.33%

13.1% 12.6% 21.2% 27.0% 29.8% 32.8% 33.3% 37.3% 48.8%

na 0.33% 3.06% 3.65% 1.18% 1.39% 0.51% 3.63% 4.81%

na 1.76% 4.67% 4.83% 3.76% 4.01% 3.13% 5.15% 5.10%

na 2.09% 1.62% 1.18% 2.58% 2.62% 2.62% 1.52% 0.29%

Source: National Statistics Ofce (1994). Note: Growth rate based on compounded method.


Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin
Table 2 Population levels, national and Metro Manila: 1960, 1970, 1980, 1990 Philippine population In thousands Growth rate 27,088 36,684 48,098 60,703 na 3.08% 2.75% 2.35% Metro Manila population In thousands Growth rate 2462 3967 5926 7928 na 4.89% 4.10% 2.95%

Census year 1960 1970 1980 1990

Percentage of total 9.09% 10.81% 12.32% 13.06%

Source: National Statistics Ofce (1994). Note: Growth rate based on compounded method.

ably. This is reected in two measurements, ie the primacy index and the four-city index. The primacy index is dened as the ratio of the population of Metro Manila relative to the population of the second largest city,1 while the four-city index shows the ratio of the population of Metro Manila relative to the combined populations of the next three largest cities.2 In 1960, Metro Manilas population stood at 2.462 million, while the second largest city, Cebu City, had a population of 251 000. The primacy index of the Philippines then was 9.81 (see Table 3 and appendix B). By 1990, the primacy index of the Philippines dipped slightly to 9.33 with Metro Manilas population at 7.928 million over that of Davao City, the second largest city then. Cebu City had a population of only 610 000 in 1990. Davao Citys average annual growth was 4.51% over the 30-year period (19601990), whereas Cebu Citys average annual growth was 3.0% for the same period. The drop in the primacy index from 9.81 in 1990 implies that the primacy of Metro Manila had not risen by as much during the 1970s and 1980s, compared to the secondary cities that had expanded in population at a higher rate than the primate city.

Figure 1 Rank size distribution diagram of Philippine cities

Rank size distribution

The rank size diagram for several key Philippine cities is also presented in Fig. 1 to show the relationship between city population size and the ranking for 57 cities in the Philippines. The rank size diagram
Table 3 Primary and four-city index, Philippines: 1960, 1970, 1980, and 1990 Census year 1960 1970 1980 1990 Primary index 9.81 10.12 9.71 9.33 Four-city index 3.24 3.45 3.47 3.50

Source: National Statistics Ofce (1994)

1 The second largest city based on the 1990 census year is Davao City. 2 The next three largest cities after Metro Manila in 1990 are: Davao City, Cebu City and Zamboanga City.

has the advantage of quantifying the intrinsic nature in the structure of city groups of a country. If data are available for a number of years, the mechanism of the structural change can be clearly seen from timeseries analysis. In other words, a parallel upward shift of the straight line means that there was a population increase proportionate to the population size of each city from upper ranked to lower ranked cities during the period (Karan, 1994, p 56). The graphs in Fig. 1 practically show that there is a parallel shift in the line graph representing Metro Manila and the second largest city for the period 19601990. This means that the relative primacy of Metro Manila over the second largest city (ie Cebu or Davao, for 1960 and 1990, respectively) remained during the 30-year period. This is conrmed by the primacy index that stood at the index point range of about 9 for the years 1960 and 1990 (see Table 3). One must realize that Metro Manila is not only the nations capital, but also the center of industrialization for the country and the seat of central government. The major central business districts in the country are all located in Metro Manila Binondo, Makati and Ortigas Complex where you nd the head ofces of the major commercial, industrial and nancial corporations. Manila is also the countrys major provider of quality education and medical services. Until recently, one had to go to Metro Manila to register a new company with the Securities and Exchange Com-


Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin

mission in Metro Manila in order to start a business anywhere in the country. Not all is good though in the primate cities. Some of the problems found in primate cities include (Cheema, 1991): chaotic land use, proliferation of slums and squatter settlements, the lack of infrastructure and services, and the poor maintenance of existing facilities. In coping with the problems associated with primate cities like Metro Manila, there has been an evolution of urban governance. Laquian (1995) presents the historical development of urban governance in the Philippines:
In the Philippines, for example, strong commitment to local autonomy was inculcated during the American colonial period (190135). With the rapid expansion of the Manila metropolitan area, however, it was accepted after the Second World War that a broader, area-wide approach was needed to manage and coordinate problems of transportation, water, pollution, and so on. The Marcos dictatorship imposed centralist forms of governance throughout the whole metropolitan area from 1973 to 1986. With the Aquino government and the current Ramos municipal governance once again, despite the realization by many that areawide approaches are needed in Metro Manila because such problems as air and water pollution, epidemics, crime, trafc, and garbage collection and disposal do not respect local municipal boundaries. The passage of the Local Autonomy Law in 1992 has supported the swing towards more local government powers in the Metro Manila area. A bill in the Philippine Congress seeking the abolition of the Metro Manila Authority is currently being supported by municipal mayors and other local politicians.

At this juncture, it would be appropriate to ask What were the factors historical and economic that led to the primacy of Metro Manila in the Philippines?

Urbanization history in the Philippines

From the pre-Spanish era to the Spanish colonial era and up to the early 1900s, the Philippines was merely t for the overseas Chinese, Indians and an entrepo Arabian merchants. During the Spanish era (1521 1898), the rst cities to be developed were those equipped with strategic ports like Manila and Cebu. Settlements tend to revolve around a Catholic cathedral which fronts a town park and plaza. Manila became the predominant center of the urban hierarchy imposed on the Philippines by Spain more than 400 years ago and has maintained its primate position ever since (Doeppers, 1984). In 1903, the national level of urbanization in the Philippines was estimated at 13.1% of total population. The relatively high degree of urbanization in the Philippines early in the century may have been induced by historical circumstances. First, the Spanish

tradition of urbanism through reduction meant that in the hope of spreading the Christian faith the natives were resettled from scattered barangays (ie a group of households within a barrio; see glossary in appendix A) into compact settlements. Second, towards the end of Spanish rule, guerrilla activities became rampant in the hinterlands, compelling the town dwellers to ee to the poblaciones (see appendix A). A third reason may be attributable to the deployment of American military forces to locations that had grown into urban centers for local employment (Pernia, 1976, p 6). A slight decline in the level of urbanization occurred between 1903 and 1918, from 13.1% to 12.6% (see Table 1). This unusual phenomenon had three causes. First, the departure of the Spanish administrators had put an end to their resettlement programs; and the subsequent return of the affected Filipinos to their rural hamlets took place. Second, hostilities in the countryside came to an end as the Filipinos then accepted American administration. Third, further encouragement of Filipinos to return to the farms resulted from a land reform which had distributed land owned by the Spanish friars and landed families to tenant farmers, for the cultivation of staple food and other primary products. Furthermore, there was the lifting of export duties by 1913 on farm products, namely, sugar, tobacco, hemp, and copra. By 1939 the level of urbanization rose to 21.6%. The pace of urbanization was at an all-time high as the urban population growth accelerated sharply while rural growth decelerated with population growth only increasing marginally (see Table 1). During this time, the American administration provided the educational infrastructure and introduced a democratic political system. The pronounced upswing in urbanization from 1918 to 1939 was no doubt tied to socio-economic developments during the period (Agoncillo, 1971). First, a general improvement in educational standards must have spurred rural-to-urban migration. Second, the American policy of Filipinisation must have opened up opportunities not only for direct employment but also for indirect participation in the political and economic affairs of provincial capitals and the poblaciones. Third, the Commonwealth government embarked on a strategy of industrialization and product diversication to start weaning the Philippine economy from its economic dependency with the US. Thus, while there were only about ve manufacturing establishments per 10 000 persons in 1918, by 1939, there were 87 (Pernia, 1976, p 7). Between 1939 and 1948, a period dominated by the Second World War and the Declaration of Independence in 1946, the speed of urbanization tapered, although the level climbed to 27% and the urban population increased from 3.4 million to 5.2 million. It was during the era of the American administration (18991946) that there were concerted efforts at land reform to introduce the Torrents Title for land identi249

Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin

cation and ownership. This widened the base of land ownership. The decade of the 1950s saw further deceleration in the pace of urbanization as total population growth accelerated. Urbanization during the 1960s appears to have picked up somewhat as a consequence of a small drop in the rates of rural and total population increase. The post-war period (19461964) saw the inux of urban development centered on Manila. Manila demonstrated various features of urban bias by providing the reputable universities, health care and medical facilities, a large protected industrial base, the nancial/trade services, foreign exchange and political power. By 1970, 12 million Filipinos were part of the urban population, accounting for a third of the national population. The rst phase of the Marcos era (19651972) saw an increase in the importance of Metro Manila. Prices of land in Metro Manila, for example, doubled from 1965 to 1972 as it became the only urban growth center for all socioeconomic activities. It was also during this time that most of the housing subdivisions in Metro Manila were developed by the private sector. There was no zoning and land use planning then. This resulted in an upsurge of informal dwellings along riverbanks, creeks, and railroad tracks and on idle land. Relocation strategies were ineffective as the proposed sites were located far away from the areas of income and employment opportunities (Center for Research and Communication, 1992, p 4). After the declaration of martial law in 1972, President Ferdinand Marcos introduced many organizational changes in government under the Integrated Reorganizational Plan. The Plan included, among other things, the setting up of the National Economic and Development Authority, the central planning agency charged with the preparation of national, regional and sectoral plans. By 1975, the total urban population reached 14 million and accounted for 33% of total population (Table 1). It is noteworthy that during the martial law years the pace of urbanization slowed down marginally from an average growth rate of 4.01% (19601970) to an annual average growth rate of 3.13% (19701975). The pace of growth in the rural areas continued at an average rate of 2.62%. While the Marcos administration treated social housing as a priority, rural development never blossomed due to concentration of power and resources in Metro Manila. The housing problem was aggravated due to an increase in rural-to-urban migration. This can be seen from the step jump in the pace of urbanization from 1975 to 1980. The urban population during this period increased at an average annual rate of 5.15%, while the rural population merely increased by 1.52%. The overall population growth registered an average annual growth of 2.79%. It should be noted that during the period 19761980, the real growth rate of GDP was 6.28% for the Philippines while regional growth ranged from 3.4% to 11.64%. Metro Manila grew by 6.33% in real GDP

during that period (Center for Research and Communication, 1992, p 6). The 1980s saw a round of exogenous shocks that hit the Philippine economy hard: a 17-fold increase in oil prices since the rst oil shock in 1974, a prolonged world recession, the corresponding price decline of Philippine export products (notably, coconut and sugar), and the persistent volatility in world currency markets (Villegas, 1982, p 3). The result was a decline in the annual average real GDP of 0.49% from 1981 to 1985. The assassination of Senator Ninoy Aquino at the Manila International Airport on 21 August 1983 led to the deterioration of the socioeconomic environment in the Philippines. The loss of condence in the thenPresident Marcos led him to call a snap election. The elections culminated in the EDSA revolution on 20 February 1986 with the overthrow of the Marcos regime and the installation of an elected government led by Mrs. Corazon C. Aquino. During the Aquino administration (February 1986 to 1 June 1992), the economy was restructured by adopting market and nancial reforms. This led to an improvement in the economy as evident in a steady real GDP growth, which registered 4.48% from 1986 to 1991. Metro Manila grew at 5.63% during the same period. By 1990, the total population had increased to 60.7 million, up from 48.2 million in 1980. The pace of urbanization during the 10-year period (19801990) continued as urban population grew at 5.10% per year on average, compared to only 0.29% growth in the rural areas (see Table 1).

Economic policies in the Philippines

The era of the Spanish administration kept the Philippines as a traditional agricultural agrarian economy oriented towards the production of export crops (eg sugar and tobacco). This was the starting point of the long-standing trade relationship between the Philippines and the US (Paderanga and Pernia, 1982). This is reected in the contribution of agriculture to total output that stood at 55% in census year 1902. The pre-war Philippine economy was characterized by a preferential relationship between the Philippines and the US. The Philippines exported agricultural products such as sugar, coconut, tobacco and abacca to the US. From 1899 to 1937, 7693% of total export earnings accounted for these products alone. Unfortunately, this trade relationship did not improve the productivity of the agricultural sector. Consequently, and as a result of the agrarian economy (with only a few wealthy families owning large tracts of agricultural land), the farm incomes of the rural poor did not improve. After independence in 1946, the Philippine economy faced a high ination environment and a chronic balance of payments decit situation. The economy continued to depend on agricultural exports to earn foreign exchange needed by consumers of imported

Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin

products, mainly from the US. As international reserves dwindled to low levels, import and exchange rate controls were imposed during the 1950s. It was during this decade that the government started to encourage both local and foreign entrepreneurs to invest in import substituting industries, such as food manufacturing, textile products, beverages, paper and rubber products, and chemical products. Through an overvalued peso, tax exemptions, tariff protection and subsidized credit to preferred industries, the government gave a major boost to an industrialization process that concentrated on import substitution (Villegas, 1982). It is interesting to note that most of the manufacturing industries in the Philippines then were located in Metro Manila, which had beneted from the myriad import substitution policies. A rising real wage gap also prevailed during this period as minimum wage rates had been legislated for the industrial sector/urban areas in Metro Manila. Real wages in Metro Manila outstripped the wages in the agricultural sector/rural areas (see Fig. 2). The desired outcome was to discourage labor intensive industries and further bias investments toward the capital intensive, import substitution activities (Paderanga and Pernia, 1982). Metro Manila also beneted from direct public investments for infrastructure development. For example, the Metro Manila area accounted for 68% of all telephone lines laid by 1992, although its population accounted for only 13% at that time. The late 1970s1990s saw the promotion of export industries and the introduction of regional dispersion policies (ie more infrastructure developments outside Metro Manila; a 50 km radial corridor in Manila for new manufacturing plants; and greater local autonomy for the regions outside Metro Manila to name a few). Hence, the role of Metro Manila as the primate city had already been fully entrenched in the Philippines. At this point it is interesting to note that the World Bank has estimated that in Asia and Latin America, about 80% of future economic growth will come from urban economies (Laquian, 1995). From the foregoing analysis, one will note that the

primacy of Metro Manila has been brought about by historical forces, natural endowments, and socioeconomic policies making it the dominant political, administrative, commercial, and industrial center for the Philippines (Paderanga and Pernia, 1982)

Todaro implications for the Philippines

Fig. 2 shows that the relative wage gap has been increasing over the years for the Philippines as urban (ie non-agricultural) wages in Metro Manila surpassed agricultural wages by 2850% over the period 1951 1989 (see Table 4). This is reinforced by Doeppers (1984), who observed that cigar workers and many thousands of urban laborers and workmen commonly earned one-third or one-forth as much as a typical clerk in business or government. The implication of this wage gap is that economic agents in the rural areas will migrate to the urban area in the hope of higher nancial and psychological benets. This is the main reason why the urban population of the Philippines increased by an average of 5.10% from 1980 to 1990 relative to a 0.29% average increase in the rural population for the same period. The decision to migrate, however, should also be inuenced by the probability of obtaining an urban job. This can be expressed as a ratio of the employed urban labor force to the total urban labor force (see Todaro, 1994). This is estimated to be 0.885 (or the percentage of the employed labor force in the urban area out of the total labor force in 1992; see Table 5). It is also the ratio Lm/Lu in the equivalent Todaro expression: Wa Lm m) (W Lu (1)

Figure 2 Legislated daily wage rates in the private sector, nominal terms

where Wa agricultural wage, Lm employment in manufacturing, Lu total urban labor force, and m the urban expected wage. W equation (1) shows the probability of urban job success necessary to equate agricultural income with urban expected income, and thus cause a potential migrant to be indifferent between job locations. As the Todaro model has pointed out, it is possible to have persistent migration despite the existence of high rates of urban unemployment. In the Philippine case, most of the migrants tended to be single and non-white-collar types of worker (Viloria, 1971). Moreover, the highest level of migration in the Philippines tended to be in the 15 24 age group for males and 2024 age group for females. The national average was in the 2024 age group. Females were also more migratory than males, no matter the distance, and this is evidenced even in international migration, as in the case of domestic helpers and nurses. The evidence also suggests that not only do the educated ones migrate but also they move to areas with already high levels of education. This is especially true of the rural urban ow, such as

Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin
Table 4 Summary of legislated daily wage rates in the private sector, 1951 1988, in nominal terms Non-agricultural Metro Manila 4.00 4.00 6.00 6.00 8.00 9.98 10.65 12.81 15.19 15.74 20.48 27.39 31.37 31.82 34.22 57.08 57.08 57.08 69.33 69.33 69.33 Agricultural Plantation 2.00 3.50 3.50 3.50 4.75 6.73 7.13 9.56 11.94 12.48 16.63 22.68 25.85 26.18 27.97 46.67 46.67 46.67 58.50 58.50 58.50

Year 1951 1963 1965 1966 1970 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

Outside Manila 4.00 4.00 6.00 6.00 8.00 9.98 10.65 11.73 14.11 14.65 19.40 26.30 30.29 30.74 33.14 56.00 56.00 56.00 69.33 69.33 69.33

Non-plantation 2.00 3.50 3.50 3.50 4.75 6.73 7.13 8.48 10.86 11.40 14.16 17.03 19.43 19.65 20.95 35.67 35.67 35.67 47.12 47.12 47.12

Note: Data for 1974 1981 are for those established with capacity of P1 million or more. With the passage of Wage Order No 1 in March 1981, uniform legislated wage rates for establishments regardless of capacity was promulgated to take effect on January 1982. Data reect the highest legislated wage rate for the year. Source: National Wage Council. Table 5 Household population 10 years old and over by employment status and by region, 1982 1992 (gures in thousands) Total labor force Urban % 5824 6085 7817 8020 8355 8633 8821 9060 9939 12,334 12,887 31.5 30.2 37.7 37.6 37.8 37.7 37.6 37.9 34.0 48.8 47.8 Employed labor force Urban % 5000 5340 6578 6699 6860 7463 7732 7998 8258 10,864 11,411 85.9 87.8 84.1 83.5 82.1 86.4 87.7 88.3 88.4 88.1 88.5

Year 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

Rural 12,643 14,045 12,938 13,309 13,717 14,247 14,631 14,799 15,185 12,913 14,052

% 68.5 69.8 62.3 62.4 62.2 62.3 62.4 62.1 66.0 51.2 52.2

Rural 11,734 13,203 11,971 12,268 12,771 13,333 13,766 13,851 14,273 12,116 13,207

% 92.8 94.0 92.5 92.2 93.1 93.6 94.1 93.6 94.0 93.8 94.0

Source: National Statistics Ofce (1994).

to Bangkok or Manila, where the nest institutions of higher learning are located (Laquian, 1977). One has to take note, however, that a large percentage of the employed in the urban sector of the Philippines belongs to the informal sector. This is brought about by the chronic labor surplus in the city a result of the low rate of modern job creation and the heavy migration from provinces to metropolis which meant that many workers had to be absorbed outside the modern sector into less productive pursuits (Doeppers, 1984). Those who form part of the informal sector include the street vendors, small scale manufacturing subcontractors, junk collectors, to name a few. Estimates of the informal sector of the dual economy in the Philippines ranges from 30% to

50% of the GNP depending on the performance of the formal economy (Villegas, 1990). Most workers entering the informal urban sector are recent migrants from rural areas who are unable to nd employment in the formal sector (Todaro, 1994). At this point the research work of Nakanishi (1996) on Comparative study of informal labor markets in the urbanization process: the Philippines and Thailand is most relevant. Following the development economic theories of Lewis (1994), Fei and Ranis (1964), Jorgenson (1967) and the modied Harris and Todaro (1970), the study looked into the dynamic process of the urban informal market which aries in the course of urbanization. The main ndings of the study include the following:

Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin
Table 6 Rank size of cities in the Philippines: census years: 1960, 1970, 1980 and 1990 (population in thousands) Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 City Metro Manila Cebu Davao Iloilo Zamboanga San Carlos (Neg.) Bacolod Cadiz Batangas Butuan Calbayog Angeles Iriga San Pablo Cabanatuan Cagayande Oro Upa San Carlos Toledo Dagupan Ormoc Legaspi Silay Bago Iligan La Carlota Naga Cavite Tadoban General Santos Gingoog Bagulo Laoag Lapu-Lapu Lucena Roxas Olongapo Ozamis Pagadian Cotabato San Jose Surigao Dumaguete Danao Dipolog Mandaue Oroquleta Dapitan Bais Marawi Canlaon Puerto Princesa Tangub Tagbilaran Tagaytay Trece Martires Palayan 1960 2462 251 226 151 131 125 119 89 83 80 78 76 75 71 70 68 64 64 64 63 63 61 60 59 58 57 56 55 54 53 53 50 50 49 49 49 45 44 41 38 38 37 35 33 32 29 29 28 27 27 23 22 21 20 7 4 3 City Metro Manila Davao Cebu Iloilo Zamboanga Bacolod Angeles Butuan Cagayan de Oro Cadiz Batangas Olongapo San Pablo Iligan Cabanatuan Upa Calbayog San Carlos (Neg.) General Santos Bagulo Ormoc Legaspi San Carlos Dagupan Naga Iriga Tadoban Lucena Cavite Bago San Jose Silay Lapu-Lapu Toledo Roxas Gingoog Ozamis Laoag Cotabato Mandatie Pagadian Marawi Dumaguete Surigao Danao Dipolog Bais Oroquleta La Carlota Puerto Princesa Dapitan Tagbilaran Tangub Canlaon Tagaytay Palayan Trece Martires 1970 3967 392 347 210 200 187 135 131 128 124 109 108 106 104 100 94 94 90 86 85 85 84 84 84 80 77 77 77 76 72 70 69 69 68 68 66 65 62 61 59 58 56 52 51 48 46 40 39 38 38 38 33 31 24 11 8 7 City Metro Manila Davao Cebu Zamboanga Bacolod Iloilo Cagavan de Oro Angeles Butuan Iligan Olongapo General Santos Batangas Cabanatuan San Pablo Cadiz Lipa Baguio Silay Mandaue Lucena Calbayog Ormoc Tadoban San Carlos Legaspi Bago Lapu-Lapu Dagupan San Carlos (Neg.) Toledo Naga Cavite Cotabato Pagadian Roxas Gingoog Surigao Ozamis Laoag Iriga San Jose Dumaguete Dipolog Puerto Princesa Danao Dapitan Marawi Bais Oroquieta La Carlota Tagbilaran Tangub Canlaon Tagaytay Palayan Trece Martires 1980 5926 610 490 344 262 245 227 189 172 167 156 149 144 138 132 130 121 119 111 111 108 107 105 103 101 100 100 99 98 92 92 91 88 84 81 81 80 80 78 70 66 64 63 62 60 57 55 54 49 47 46 43 40 29 16 15 9 City Metro Manila Davao Cebu Zamboanga Bacolod Cagayan de Oro Iloilo 1990 7928 850 610 442 364 340 310

General Santos 250 Angeles 237 Butuan Iligan Olongapo Batangas Baguio Mandaue Cabanatuan San Pablo Lipa Lucena Lapu-Lapu Tacloban Ormoc Cotabato San Carlos Bago Dagupan Legaspi Toledo Cadiz Naga Calbsyog San Carlos (Neg.) Pagadian Roxas Surigao Marawi Ozamis Silay Puerto Princesa Cavite San Jose Laoag Gingoog Dumaguete Dipolog Iriga Danao Bais Dapitan Tagbllaran La Carlota Oroquleta Tangub Canlaon Tagaytay Palayan Trece Martires 228 227 193 185 183 180 173 161 160 151 146 138 129 127 124 124 122 121 120 120 115 115 106 106 103 100 92 92 92 92 92 88 84 83 80 80 74 73 60 59 56 56 53 43 37 24 20 16

Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin

In the Philippines, most of the long term residents among the migrants who move to the Manila metropolitan area in both the macro aggregate data and in the study area are from the Eastern Visayas and Bicol regions, and most of these migrants are landless agricultural laborers. On the other hand, most of the migrants who come for short terms to work in Manila are from Central Luzon and Southern Tagalog close to Metro Manila, and many of these migrants are tenant farmers as well as landless agricultural laborers. The urban slums in the Philippines are composed of migrants from the poorest regions of the country, the labor market in the urban informal sector possesses an extremely segmented and closed character, and the mechanism of this market by and large depends on kababayan (town mate) based patron client relationships grounded in rural traditional norms and between migrants from the same home region. The urban labor market in the Philippines is interconnected with the segmentation of the urban formal sector, and exhibits remarkable inexibility. In contrast to the situation in the Philippines, most of the long term residents living in the low income districts of the Bangkok metropolitan area are from the Central region and the North where income levels are comparatively high, and most of these residents had been owner farmers or tenant farmers who had to relinquish the rights to their land. On the other hand, most of the migrants who come for short terms to work in Bangkok are from the Northeast, the countrys poorest region, and these people are owner farmers with small plots of land or are tenant farmers. This diverging background between Central/North and Northeast migrants has brought into existence a dual structure within the low income residential areas. The migrants from the Central region and from the North nd jobs in the urban formal sector or in the urban informal sector where productivity is comparatively high and there is access to the formal sector; meanwhile, migrants from the Northeast nd jobs in the informal sector where productivity is low and where access to the urban formal sector is largely impossible. The above comparisons between the two countries point out the need for reservations about applying the experience of Thailands economic development and urbanization to the Philippine economy. It suggests that the difference between the two countries is due greatly to the initial difference in the customary economy and in rural conditions.

macy of Metro Manila as the countrys dominant political, administrative, commercial and industrial center emerges. It is the rural urban migration factor and the city primacy concept, reinforced by the rank size distribution analysis involving 57 cities in the Philippines, that impart certain uniqueness to the countrys urbanization. Metro Manilas primacy is also inferred from an in-depth discussion of the historical, geopolitical and economic forces, which have evolved since the days of the Spanish, and American administrations that have governed the Philippines. In other words, the unique urbanization model for the Philippines can be appropriately termed as a migration primacy urbanization model. It is explicit from this model that national resources allocation would be inadvertently diverted to the primate city for the development of large scale, urban physical infrastructure, such as for education, health, housing, banking and nance, and for land transport. The outcome would be regional growth disparity among cities in the Philippines and a persistent growth divergence between primate Metro Manila relative to other cities. There should therefore be growing concern to adopt dispersion policies by the central planning authority, so as to decentralize economic and population activities away from Metro Manila into other cities. Although increasing amounts of foreign remittances to the various provinces from Filipinos working overseas mitigate migration to Metro Manila to some extent, there is still the need for a comprehensive but balanced regional development program for the country. Those involved in the governance of primate cities like Metro Manila should strive to achieve the four specic goals for a better quality of life as proposed by Laquian (1995): (1) efciency in the delivery of urban services; (2) equity in the interrelationships of groups and classes in the urban society; (3) economic development in the mega-urban region; and (4) environmental sustainability in the process of development. Moreover, a concerted regional decentralization policy can be timely to relieve the dual economy forces which continue to exist in most cities in the Philippines. The siting of high growth industries (such as the CALABARZON3 project), in addition to continued nurturing of the agricultural sector, can be considered helpful through an appropriate bundle of industrial, scal and training incentives in a rethink of national economic policies of freeing up the Philippine economy to realize its comparative and competitive advantages.

This paper demonstrates the urbanization pattern that has taken place in the Philippines. Consistent with the conventional literature on urbanization, the rural urban migration pattern is also a key explanation factor in the urbanization of the Philippines. However, this factor alone cannot fully explain the hierarchical structure of cities in the Philippines, in which the pri254
3 CALABARZON is the acronym for the ve provinces of Cavite, Laguna, Batangas, Rizal, and Quezon. It is also the region designated under the CALABARZON Master Plan prepared by the Japan International Cooperation Agency under the auspices of the Aquino administration. The plan proposes a high industrialization strategy involving rapid growth rates of spillover from Metro Manila into adjacent areas, as against an agro based approach with slower growth, less spillover from Metro Manila, and a more decentralized spatial pattern (Ocampo, 1995).

Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin

Agoncillo, T (1971) History of the Filipino People. R P Garcia, Quezon City. Center for Research and Communication (1992) Philippine Informal Housing Sector: A Look at Metro Manila. Pasig, Metro Manila. Cheema, G S (1991) The extended metropolis in Asia: implications for urban management. In The Extended Metropolis Settlement Transition in Asia, eds N. Ginsburg et al., pp 7186. University of Hawaii Press, Honolulu. Doeppers, D (1984) Manila, 19001941 Social Change in a late Colonial Metropolis. Southeast Asia Studies, Yale University, New Haven, Conn. Dutt, A, Xie, Y, Das, R and Parai, A (1994) A comparative study of rank size distributions in China and India. In The Asian City: Processes of Development, Characteristics and Planning, eds A. K. Dutt et al. Kluwer Academic, the Netherlands. Fei, J C and Ranis, G (1964) Development of Labor Surplus Economy: Theory and Policy. Irwin, Homeword, IL. Harris, J R and Todaro, M P (1970) Migration, unemployment and development: a two-sector analysis. American Economic Review 60, 126142. Housing and Urban Development Coordinating Council and Planning and Development Collaborative International (HUDCC/PDCI) (1992) Urban Development Sector Review. HUDCC/PDCI, Manila. Jefferson, M (1939) The law of the primate city. Geographical Review 29, 226232. Jorgenson, D M (1967) Surplus agricultural labour and the development of a dual economy. Oxford Economic Papers 19, 281 306. Karan, P (1994) The distribution of city sizes in Asian countries. In The Asian City: Processes of Development, Characteristics and Planning, eds A K Dutt et al. Kluwer Academic, the Netherlands. Laquian, A (1977) Social Change and Internal Migration: A review of research ndings for Africa, Asia, and Latin America. International Development Research Centre, Ottawa. Laquian, A (1995) The governance of mega-urban regions. In The Mega-Urban Regions of Southeast Asia, eds T G McGee and I M Robinson. UBC Press, Vancouver. Lewis, A (1994) Economic development with unlimited supplies of labor. Manchester School 22. In Economic Development, ed. M Todaro. Longman, New York and London. McGee, T G (1991) The emergence of desakota regions in Asia: expanding a hypothesis. In The Extended Metropolis Settlement Transition in Asia, eds N. Ginsburg et al., pp 325. University of Hawaii Press, Honolulu. McGee, T G and Greenberg, C (1992) The Emergence of Extended Metropolitan Regions in ASEAN. ASEAN Economic Bulletin, ISEAS, Singapore. McGee, T G and Robinson, I M (1995) ASEAN mega-urbanization: a synthesis. In The Mega-Urban Regions of Southeast Asia, eds T G McGee and I M Robinson. UBC Press, Vancouver. Nakanishi, T (1996) Comparative study of informal labor markets in the urbanization process: the Philippines and Thailand. Developing Economies 34, 4. National Statistics Ofce (1994), 1994 Philippine Statistical Yearbook, Manila. Ocampo, R B (1995) The Metro Manila mega-region. In The MegaUrban Regions of Southeast Asia, eds T G McGee and I M Robinson. UBC Press, Vancouver. Paderanga, C Jr and Pernia, E (1982) Economic Policies and Spatial and Urban Development: The Philippine Experience. Philippine Institute for Development Studies, Manila. Parai, A and Dutt, A (1994) Perspectives on Asian urbanization: an east west comparison. In The Asian City: Processes of Development, Characteristics and Planning, eds A K Dutt et al. Kluwer Academic, the Netherlands. Pernia, E (1976) Urbanization in the Philippines: historical and

comparative perspectives. Papers of the East West Population Institute, No. 40. East West Population Institute, Hawaii. Todaro, M (1994) Economic Development. Longman, New York and London United Nations (UN) (1986) Population growth and policies in mega cities, Metro Manila, Population Policy Paper No. 5. In The Asian City: Processes of Development, Characteristics and Planning, eds A K Dutt et al. Kluwer Academic, the Netherlands, 1994. Villegas, B (1982) One Hundred Fifty Years of Philippine Economic Development, Economics and Society, Part I. Center for Research and Communication, Pasig, Metro Manila. Villegas, B (1990) Getting the underground economy to surface. Manila Bulletin, p 32, 27 June. Viloria, L A (1971) Manila. In Rural Urban Migrants and Metropolitan Development, ed. A Laquian. Intermet Metropolitan Studies, Toronto. Zipf, G (1949) Human behavior and the principle of least effort: an introduction to human ecology. In The Asian City: Processes of Development, Characteristics and Planning, eds A K Dutt et al. Kluwer Academic, the Netherlands, 1994.

Pernia (1976) provides the following working denitions: (1) Level or degree of urbanization is the proportion (percentage) of the population living in the urban places. (2) Urbanization as such (or the process of urbanization) means the increase in the proportion urban. (3) Rate of urban growth is the percentage of increase in the urban population during an interval (and similarly for rate of rural growth). (4) Tempo or pace of urbanization is the difference between urban and rural growth rates. Karan (1994, pp 5465) provides the following denitions and operational concepts: (1) Primacy exists when a stratum of small towns and cities are dominated by one or more very large cities and there are fewer intermediate cities. One feature in the progress of urbanization is the emergence of large cities. Most large Asian cities have achieved rapid growth during the last 30 years. In 1939 Mark Jefferson introduced the concept of the primate city (Jefferson, 1939, pp 226232). Primacy is present, according to Jefferson, when the largest citys population is several times larger than the population of the city that is second in rank. (2) The primacy index (P-index), which indicates the ratio between the city population of the top ranked city and that of the second ranked city, and the four-city index (F-index), which indicates the ratio between the population of the top ranked city and the sum of the second to fourth ranked cities populations, are used to measure the primacy of the primate city in Asian countries. The countries with a large P-index generally tend to have a large F-index too. The correlation coefcient between these indices for the data on Asian countries is very high at 98%. (3) Rank size distribution diagrams, in which the population of urban centers in each country have been ranked in decreasing order of size (the largest urban center is given a rank of one) and plotted on a graph which has logarithm of population in the ordinate and logarithm of rank on the abscissa. The concept of rank size distribution of cities and the rank size rule was initially advanced by Zipf (1949). Zipf tried to answer questions as to why there are a large number of small cities and fewer large cities, and the relationships between population of cities and their ranks (Dutt et al., 1994, p 81). In the Philippines urban areas fall under the following denitions (Housing and Urban Development Coordination Council, 1992, p 15): (1) All cities and municipalities having a population density of at least 1000 persons per square kilometer.


Todaro migration and primacy models: J Calero Cuervo and D H O Kim Hin
(2) Poblaciones or central districts of municipalities and cities which have a population density of at least 500 persons per square kilometer. (3) Poblaciones or central districts not included in the rst two, regardless of the population size which have the following: (1) street pattern or network of streets in either parallel or right angle orientation; (2) at least six establishments (commercial, manufacturing, recreational and/or personal services); (3) at least three of the following: (1) a town hall, church or chapel with religious service at least once a month a public plaza, park or cemetery; (2) a market place, or building where trading activities are carried on at least once a week; (3) a public building, like a school, hospital, puericulture and health center, or library. (4) Barangays having at least 1000 inhabitants who meet the conditions set forth in the above and where the occupation of the inhabitants is predominantly non-farming or shing.