AGGLOMERATION AND SUB‐REGIONAL DISPARITIES UNDER DECENTRALIZATION: EVIDENCE OF SPATIAL CLUSTERING OF LAND VALUES IN THE PHILIPPINES

Like other developing countries, the Philippines aims for balanced spatial development. This paper investigates the pattern of sub‐regional disparities by applying the global Moran I and local Moran I_i test statistics on land values data for 1986–2000. Overall, both provincial and city land values diverge spatially. Local clustering of land values is found only within and around Metro Manila. While the results suggest persistent agglomeration economies during the decentralization period, partly because of bias in the fiscal transfer system, they also indicate that other government policies were effective in promoting land values immediately outside Metro Manila.