Analyzing Spatial Disparities In Economic Development: A Core-Periphery Approach of the National Capital Region’s Urban Fringe

Purpose: This study examines the influence of Household Final Consumption Expenditure (HFCE), Provincial Inflation, Higher Educational Institutions (HEI), and Transportation and Storage to the Gross Regional Domestic Product (GRDP) of three Philippine regions: the National Capital Region (NCR), Region III (Central Luzon), and Region IV-A (CALABARZON). These regions were selected due to their distinct roles in the core-periphery model, with the National Capital Region as the economic “core” and Regions III and IV-A as the peripheral regions with economic interconnections to the core. The study uses regional-level data from the Philippine Statistics Authority and the Commission on Higher Education from 2004 to 2021. Methodology: The study employed Ordinary Least Squares (OLS) for region-specific analysis of the variables and Random Effects Generalized Least Squares (GLS) for the panel dataset, which combines the data across the three regions over time. Findings: The findings reveal that HFCE positively and significantly impacts GRDP in NCR, Region III and Region IV-A. The number of graduates from HEIs shows a positive and significant relationship with GRDP only in Region III (Central Luzon). The other variables, provincial inflation and transportation and storage does not show a significant relationship to GRDP in the regional level and in all of the regions combined. In the panel dataset, the results highlight that only HFCE has a positive and significant impact on GRDP, suggesting that the economic influence of the core (NCR) extends to the periphery through this variable. Unique Contribution to Theory, Policy and Practice: The findings suggest policies aimed at stimulating household consumption in both the core and peripheral regions to foster balanced economic growth.