Executive Summary

The development context of the Cordillera Region

The Cordillera Administrative Region (CAR) is home to 13 major watersheds, playing a key role in maintaining ecological balance in Northern Philippines. With growing international awareness on global warming and climate change issues, it is time for the Cordilleras to harness this most natural advantage for socio-economic development.

Ironically, CAR’s regional economy is anchored on industry basically high-value PEZA-manufactured electronics while the agriculture and forestry sector now only contribute just a tenth to regional gross output. The services sector has steadily increased its share but only in response to the growth of industry over the years. CAR, in fact, is one of the lowest contributing regions to national gross output as with the rest of the North Luzon regions the Ilocos and Cagayan Valley, despite its very high contribution to national manufacturing and mineral production output.

This structure of CAR’s economy has resulted to a highly inequitable distribution of income even as the poverty situation continues to improve. Compared to our neighboring North Luzon regions, CAR remains the poorest with a population poverty incidence in 2006 of 34.5%, compared to 32.7% for Ilocos and 25.5% for Cagayan Valley. Even in the proportion of the population who cannot meet their food requirement, CAR remains the poorest with a subsistence incidence of 16.9%, compared to 11.8% for Ilocos and 8.9% for Cagayan Valley.

CAR needs to diversify its sources of growth if it is to keep pace, if not surpass its neighboring North Luzon regions. But with its topography of dominantly steep slopes and high elevation areas that poses limits to intensified land development, CAR needs a strategy that will develop industries that not only will protect its fragile environment but also promote the rich and diverse indigenous culture and heritage of the region.


To indicate the development direction of the region between 2010 and 2020, CAR has adopted the theme “Pursuing a progressive autonomous region serving as balanced ecosystem model in North Philippines towards improved quality of life for Cordillerans.” To pursue this development theme, CAR’s twin priority regional strategies are: (1) advancing CAR as the Watershed Cradle of North Philippines and (2) continuing pursuit of Cordillera regional autonomy.

Pursuing a sustainable development strategy: Advancing CAR as the Watershed Cradle of North Philippines

To diversify its sources of growth, the Cordillera Region has identified “wealth-creating” economic activities or Key Focus Areas (KFAs) of development anchored on the region’s areas of comparative advantage and specialization. On CAR’s areas of comparative advantage, the region promotes itself as a watershed cradle, a major hydropower producer, an eco-tourist destination area, and greens and ornamental grocer. On CAR’s areas of specialization, CAR promotes itself as a prime educational center and as major producer of agri-industrial products and major site of knowledge-based industries.