ABSTRACT The North–South Commuter Rail (NSCR) will dramatically alter the transport network for the most economically vibrant regions in the Philippines. This paper develops a spatial computable general equilibrium model to consider how this infrastructure will change the economic opportunities in the rail catchment area of about 10,000 km 2 . Calibrated on the state of the economy in 2020, the results suggest that by itself, the NSCR has limited economic impact compared to the baseline by 2040. The NSCR’s substantial potential to spur growth can only be realized when accompanied by land market reforms that accommodate urban development even as environmentally‐sensitive areas remain protected. This increases the area’s gross value‐added by 3.7% relative to the baseline. Coupling land market reforms with policies to reduce business costs in strategic locations ensures that the rail has the greatest impact, however the marginal benefit of each industrial cluster is influenced by the strength of agglomeration economies. JEL Classification: O2, R1, R3
Bird et al. (Fri,) studied this question.