MANILA, April 6 (Xinhua) -- The development of Mindanao in southern Philippines is key to the economic progress in the country, according to a World Bank study released on Friday.

"Unless there is development in Mindanao, it is hard to see how the Philippines can achieve sustained and inclusive growth," said the "Mindanao Jobs Report: A Strategy of Mindanao Regional Development."

The report said the main challenge for Mindanao, like the rest of the Philippines, is how to speed up growth that creates more and better jobs and reduces poverty.

The study said that Mindanao hosts about a quarter of the country's population, but about a third of the people there are poor. Significantly reducing national poverty hinges on reducing poverty in Mindanao, the study said.

"Because Mindanao is the Philippines' main source of agricultural products, enhancing production there could reduce food and input prices, improve welfare, and make Philippine products more competitive," the study said.

The study pointed out that accelerating inclusive growth that will create more and better jobs and reduces poverty is difficult in Mindanao than in the Philippine main Luzon island or the Visayas in the central Philippines because of the long standing armed conflict in the southern Philippines.

"Progress has been made in making growth more inclusive, but Mindanao still trails the rest of the Philippines in shared prosperity," the study said.

Mindanao's per capita gross domestic product (GDP), about 1,800 U.S. dollars, is only about half the national level, it said.

According to the World Bank, the Autonomous Region in Muslim Mindanao (ARMM) has the lowest per capita GDP, about 700 U.S. dollars, or just 8 percent of per capita GDP in the National Capital Region.

Mara Warwick, World Bank's Country Director for the Philippines, Thailand, Malaysia, and Brunei, said that conflicts in some areas constrain Mindanao's aspirations to accelerate inclusive growth.

Hence, she said addressing the issues that fuel conflicts -- such as land ownership disputes, historical injustices, and weak governance -- is important, as are accelerated efforts to improve land titling and registration and promoting equitable access to land, especially among small farmers.

"While the government addresses these issues through the peace process and other initiatives, improving delivery of social services and reforming policies to support job creation and economic opportunity for all can help ensure the success of peace-building efforts," Warwick said.

The southern island group of Mindanao, one of the three major subdivisions of the Philippines, consists of main-island Mindanao, several small islands off the northern and southern coast, and the Sulu Archipelago in the west, which stretches to Borneo.

Mindanao covers two-fifths of the country's total land area, a third of territorial waters. In 2010, its population was 22 million, of whom 4.4 million or 20 percent were Muslims and 2.9 million or 13 percent are indigenous people.