The article that has been published on Business World entitled: Manufacturing: Which Regions Show Promise? says that it is important to identify which regions are well-placed to contribute to the sector’s revival amid the government’s push for both manufacturing and regional development. The local quotient (LQ) is calculated by comparing the industry’s gross value added in a region with the latter’s share of the national income. The LQ of a region can be used to identify the industry makeup of the regional economy, as well as sectors in which the region is said to be specializing.

Specialization measures how big the industry in that region is compared to the national average. An LQ equivalent to 1 would mean goods and services in a region are enough to meet only local demand. An LQ greater than 1 would mean the regions concerned are more than sufficient in their industries and, hence, sell goods and services to other regions. They are considered “specialized” in those industries. An LQ of less than 1 suggests that the region concerned tends to “import” goods or services.

In this article the LQ values of each region from 2013-2017 are shown. Six regions have an LQ value greater than 1. The region with the highest LQ for this period is Region IV-A (CALABARZON) with an average LQ of 2.30. It is followed by CAR, Region III (Central Luzon), Region IX (Zamboanga Peninsula), Region VII (Central Visayas), and Region XII (SOCCSKSARGEN). On the other hand, the region with the lowest LQ is ARMM with an average LQ of 0.05. The regions with the next lowest LQ values are Region II (Cagayan Valley), Region XIII (CARAGA), Region V (Bicol), Region I (Ilocos) and Region IV-B (MIMAROPA).