Pilot Program: Central Luzon
A concrete case study on what Common Dividend would look like in Region III — the rice bowl of the Philippines.
Why Central Luzon?
Central Luzon (Region III) is an ideal pilot region for Common Dividend because it combines:
- Agricultural land (Nueva Ecija, Pampanga, Bulacan, Tarlac) — the largest contiguous rice-growing area in the Philippines.
- Rapid urbanization — Clark Freeport Zone, the Subic-Clark corridor, and Bulacan’s new Manila Bay Airport are driving massive land value appreciation.
- Diverse population — from landless farmworkers in Nueva Ecija to middle-class families in Angeles City to informal settlers in the urban-agricultural fringe.
- Existing infrastructure — Clark’s special economic zone already has a separate fiscal and administrative framework, making it a natural testbed.
Region III by the Numbers (2024 estimates)
| Indicator | Value |
|---|---|
| Population | ~13 million |
| Land area | 22,014 km² |
| GDP (regional) | ~₱900 Billion |
| Agricultural land | ~1.2 million hectares |
| Urban land (cities + Clark) | ~150,000 hectares |
| Average household income | ~₱480,000/year |
| Poverty incidence | ~18% |
Modeled Common Use Fees (Regional)
Land Value Tax
| Land Category | Area (has) | Est. Site Value | 3% Annual Tax |
|---|---|---|---|
| Clark/Subic corridor (commercial) | 10,000 | ₱5,000/sqm | ₱15 Billion |
| Angeles/San Fernando (urban) | 40,000 | ₱2,000/sqm | ₱24 Billion |
| Pampanga/Bulacan (peri-urban) | 100,000 | ₱500/sqm | ₱15 Billion |
| Agricultural (Nueva Ecija, Tarlac) | 1,050,000 | ₱200/sqm | ₱63 Billion |
| Total LVT | ₱117 Billion |
Carbon Levy (Regional)
- Region III industrial emissions (primarily cement, power, and agricultural inputs): ~12 million tonnes CO₂e/year.
- At ₱2,800/tonne: ₱33.6 Billion/year.
Total Regional Common Use Fees
| Source | Annual Revenue |
|---|---|
| Land Value Tax | ₱117 Billion |
| Carbon Levy | ₱33.6 Billion |
| Mining/Quarrying | ₱5 Billion |
| Spectrum share | ₱3 Billion |
| Total | ~₱159 Billion |
The Pilot Dividend
At ₱159 Billion for ~13 million residents:
Regional dividend: ₱12,231/person/year (~₱1,019/month)
This is below the national target (₱27,272/year) because:
- Central Luzon is not the Philippines’ highest-value resource region.
- Under the national program, funds would be pooled nationally and distributed equally — benefiting Central Luzon net of its contribution.
Under the national model, Central Luzon residents would still receive ₱27,272/year — but cross-subsidized by higher-value regions (NCR, Cordillera, Palawan).
Case Studies: Three Families
Family 1: The Manalo Family, Cabanatuan City, Nueva Ecija
- Landless agricultural workers, 6-person household.
- Annual income: ₱180,000 (₱15,000/month from farm labor).
- Current income tax: ₱0 (below threshold).
- Current VAT burden: ~₱25,920/year.
- Land held: 0 sqm.
Under Common Dividend:
- Dividend received: ₱163,636/year (6 × ₱27,272)
- VAT relief: ₱19,440/year (75% of ₱25,920)
- LVT paid: ₱0
- Net annual benefit: +₱183,076 (~₱15,256/month additional income)
This effectively doubles the household’s income.
Family 2: The Santos Family, Angeles City, Pampanga
- Dual-income family (OFW remittances + local employment), 4 persons.
- Annual household income: ₱720,000 (₱60,000/month).
- Current income tax: ~₱87,500/year.
- Current VAT burden: ~₱34,560/year.
- Land held: 150 sqm residential lot.
Under Common Dividend:
- Dividend received: ₱109,090/year (4 × ₱27,272)
- Income tax relief: ₱87,500/year
- VAT relief: ₱25,920/year
- LVT on 150 sqm @ ₱2,000/sqm site value: ₱9,000/year
- Net annual benefit: +₱213,510 (~₱17,793/month improvement)
Family 3: The Reyes Family, Clark Freeport Zone (Commercial Landlord)
- Family owns 2,000 sqm commercial lot in Clark Freeport Zone.
- Annual rental income: ₱9,600,000 (₱800,000/month).
- Current income tax on rental: ~₱3,080,000/year.
- Land held: 2,000 sqm at estimated ₱5,000/sqm site value.
Under Common Dividend:
- Dividend received: ₱136,360/year (5 × ₱27,272)
- Income tax relief: ₱3,080,000/year (tax eliminated on labor/rental income)
- VAT relief: ₱43,200/year
- LVT on 2,000 sqm @ ₱5,000/sqm: ₱300,000/year
- Net annual benefit: +₱2,959,560
Even large commercial landholders benefit from income tax elimination — though they pay LVT proportional to their land’s community-created value. The distribution shifts from tax-on-production to fee-on-commons.
Implementation Roadmap for the Pilot
| Phase | Timeline | Actions |
|---|---|---|
| 1. Assessment | Year 1 | Commission independent land valuation; establish Regional Common Fund Commission |
| 2. Legal framework | Year 1–2 | Pass Regional Enabling Act; define eligible recipients (PhilSys-registered residents) |
| 3. Carbon baseline | Year 1 | Establish emissions inventory for Region III industries |
| 4. First distribution | Year 2 | Begin quarterly dividends at reduced rate (₱5,000/person/year) as fee collection ramps up |
| 5. Full implementation | Year 3–5 | Scale to national-target levels; integrate with national Common Fund |
What Success Looks Like
By Year 5, a successful Central Luzon pilot would demonstrate:
- Land speculation reduction: Vacancy rates in Clark and Pampanga urban areas fall as landholders bring idle land to market.
- Poverty reduction: Poverty incidence in Nueva Ecija falls from ~18% to below 10%.
- Agricultural productivity: Freed from land speculation, more agricultural land is cultivated productively.
- Administrative feasibility: Digital distribution via PhilSys-linked accounts demonstrates that ₱3 Trillion nationwide is administratively tractable.
- Political viability: Demonstrated net benefits for 80%+ of households creates political momentum for national legislation.