By Lourdes O. Pilar, April 26 2019; Business World
https://www.bworldonline.com/bicol-tops-regions-in-economic-growth/
Image Credit to Business World
THE ECONOMY of Bicol Region grew the fastest among the 17 Philippine regions in 2018, exceeding the growth rate posted by the capital as well as the national average.
Preliminary results from the Philippine Statistics Authority (PSA) showed growth in Region V — also known as Bicol Region — grew 8.9% in 2018 from five percent in 2017, outpacing the National Capital Region’s (NCR) 4.8% and Philippine gross domestic product (GDP) growth of 6.2%.
The economic expansion of Bicol — composed of the provinces of Albay, Camarines Norte, Camarines Sur, Catanduanes, Masbate, and Sorsogon — was buoyed by the industry sector that grew 14.2% in 2018 from 3.5% in 2017. The sector accounted for 23.9% of its gross regional domestic product (GRDP).
Among the industry’s subsectors, construction grew the fastest in 2018 at 21.7% compared to the 4.9% logged in 2017. Mining and quarrying accelerated to 18.8% from the year-earlier 5.5%.
“[F]or the Bicol region, the mining subsector may have contributed via tax payments while construction linked to the public infrastructure buildup also gave the industrial sector a boost,” ING Bank NV-Manila senior economist Nicholas Antonio T. Mapa said in an e-mail.
“The services sector also helped boost growth with tourism gaining and education after the government’s subsidized program for education. Meanwhile, agriculture was able to recover as well, reflecting the better year for agriculture in 2018.”
In a separate e-mail, Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort cited “lower base/denominator effects” in explaining Bicol’s accelerated growth, noting the region recorded the fourth-slowest GRDP growth in 2017.
“Faster growth in Bicol in 2018 may be attributed to the increased flow of goods and services that passed through the region as the main route of the RoRo (Roll-on, Roll-off boat system) to Eastern Visayas and Mindanao, as well as an important gateway to Masbate and Catanduanes,” Mr. Ricafort added.
For Union Bank of the Philippines, Inc. (UnionBank) chief economist Ruben Carlo O. Asuncion, Bicol’s growth has been of a surprise, noting that the region “has been one of the poverty-stricken parts of the country.”
Aside from Bicol, 11 other regions recorded growth above the national average, namely: Davao Region (8.6%), MIMAROPA Region (consisting of Occidental Mindoro and Oriental Mindoro, Marinduque, Romblon and Palawan with 8.6%), Central Visayas (7.6%), Cordillera Administrative Region (CAR, 7.3%), Calabarzon (7.3%), Autonomous Region in Muslim Mindanao (ARMM, 7.2%), Central Luzon (7.1%); Northern Mindanao (seven percent), Soccsksargen (South Cotabato, Cotabato, Sultan Kudarat, Sarangani and General Santos City with 6.9%), Ilocos Region (6.5%) and Zamboanga Peninsula (6.3%).
On the other hand, Caraga had the slowest growth recorded in 2018 at 3.2%. Other regions that had below-average GRDP growth included Cagayan Valley (3.3%); NCR (4.8%), Eastern Visayas (5.9%) and Western Visayas (6.1%).
Davao’s 8.6% GRDP growth rate marked a slowdown from the 10.7% growth registered the previous year. In a press conference in Davao City yesterday, National Economic and Development Authority Davao Regional Director Maria Lourdes D. Lim attributed the result to the “slowdown in the realization of some government projects due to various factors, including road-right-of-way issues.”
ARMM — which has now transitioned into the Bangsamoro ARMM (BARMM) — saw its GRDP growth slightly dip to 7.2% in 2018 from 7.5% in 2017. In a mobile phone message, BARMM Chief Minister Murad Ebrahim said the region’s stable performance “proves that the Bangsamoro can be at par with other regions.”
Mr. Ebrahim also noted that since the establishment of the BARMM, investors have signified interest in venturing into the region.
“With the establishment of the new Bangsamoro government, numerous entities have trusted and [have shown] support in generating jobs for the Bangsamoro people,” he said.
The BARMM was established following the ratification of the Bangsamoro Organic Law, which arises from the peace deal between the government and the Moro Islamic Liberation Front.
Meanwhile, Metro Manila remained the biggest contributor to economic growth in 2018 despite growth easing during that period.
NCR’s share in the national economy dipped to 36% last year from 36.5% in 2017.
Other regions with significant shares in the country’s output were Calabarzon (17%) national output and Central Luzon’s 9.8%.
NCR’s growth in the industry sector was flat in 2018 with 0.5% versus the 2% logged in 2017. Dragging NCR’s output was manufacturing, which posted a decline of 3.4%, a reversal from the 6.3% growth in 2017. On the other hand, its growth in the construction sector was 16.9% — a turnaround from the previous year’s 16.2% contraction.
Economists attributed easing growth in NCR to elevated inflation last year.
“The rapid acceleration in prices owing to the shortage of supply for basic foodstuffs and, to a lesser extent, the rising transport costs after all prices surged in mid-2018, sapped the overall growth momentum,” ING Bank’s Mr. Mapa said.
UnionBank’s Mr. Asuncion was of the same opinion: “Price level expectations may have affected expansion plans and other economic activities.”
“Construction growth, as mirrored by national GDP, was driven largely by the government’s investment in infrastructure development. Government spending grew and it has directly impacted both public and private construction,” Mr. Asuncion added.
In terms of per capita GRDP, NCR led all regions with P253,893, nearly three times the national average of P86,370 and up 3.8% from 2017.
Besides NCR, two other regions — Calabarzon and CAR — saw their respective per capita GRDPs exceeding the national average at P104,708 and P87,722, respectively.
On the other hand, the Autonomous Region in Muslim Mindanao had the lowest per capita GRDP of P14,657.
Looking forward, economists expect the country’s economic growth to pick up.
Fro ING Bank’s Mr. Mapa, growth will “remain resilient” this year with household consumption helping boost the services sector as inflation eases and government spending and capital formation “taking a backseat.”
For UnionBank’s Mr. Asuncion: “With the continuing decline of price levels (inflation) this 2019, it is expected that regional growth can and will continue to expand.”
“Barring all probable challenges to spending in infrastructure development and social sector needs, economic growth in the various regions are expected to grow this 2019.” — Lourdes O. Pilar in Metro Manila with Carmelito Q. Francisco in Davao City and Tajallih S. Basman in the Bangsamoro ARMM