Gross regional domestic product or GRDP measures gross value added of all resident producer units in the region. It includes regional estimates on the three major sectors including their subsectors, namely: Agriculture, Hunting, Forestry and Fishing (AHFF); Industry sector (mining and quarrying, manufacturing, construction, electricity and water); and Services sector (transport, communication and storage, trade, finance, real estate, private and government services).
The regional economy of Bicol continued to grow in the last three years: 4.3 percent in 2014, 8.9 percent in 2015 and 5.7 percent in 2016. In 2016, the GRDP amounted to P164.37 billion. The decline in growth between 2015 and 2016 does not translate to a decreased GRDP, rather, the economy expanded albeit at a slower pace.
The Services and Industry sectors continue to be the region’s economy booster, sharing 56.7 percent and 23.3 percent, respectively, of the GRDP. On one hand, AHFF contributes 20 percent. The Services sector was the biggest contributor to the economic performance in 2016, contributing 3.9 percentage points of the 5.7 percent growth, followed by Industry (1.9 percentage points) and AHFF (-0.1 percentage points).
Services, despite being the biggest contributor, decelerated. This can be attributed to slowdown in most of the sub-industries within the sector. Accelerated growth was demonstrated by Financial Intermediation and Public Administration and Defense/Compulsory Social Security. Faster growth in these subsectors can be attributed to an increase in the number of banks, the implementation of the second tranche of the salary standardization in government, the cash transfers under the Pantawid Pamilyang Pilipino Program (4Ps) and expanded health insurance coverage. However, it is worthy to note that despite the sustained increase in the number of banks, the distribution is highly skewed towards highly populous and urbanized areas. Financial sector plays a vital role in improving the well-being of the poor, particularly the small farmers and fisherfolks, and the growth of micro, small, and medium enterprises (MSMEs).
Transportation, Storage and Communications slowed down to 6.3 percent from 10.1 percent growth in 2015. The PHLPost, a government-owned and controlled corporation responsible for providing postal services in the Philippines, continually improves its services. Among its recent reforms include implementation of Domestic Mails Tracking System for real time and complete events tracking. However, despite of these reforms at the national level, it remained unfelt in the region. This may be attributed to unaggressive promotional activities of the reforms. On the transportation subsector, the moratorium on the issuance of franchises to public utility vehicles is a major factor in the slow growth of this subsector.
Growth in Trade and Repair of Motor Vehicles, Motorcycles, Personal and Household Goods also slowed to 6.4 percent from 7.7 percent last year. This can be attributed to a decrease in the cost of repair of motor vehicles and motorcycles as most of the running units were newly purchased. On the other hand, decline in the purchase of personal and household goods was affected by an increase in the cost of food items. Purchase of food was more important to households than personal effects.
Proliferation of home-based business and online shopping can be a factor in the decline of growth of Real Estate, Renting and Business Activities from 3.2 percent in 2015 to 1.9 percent in 2016. Further, there were no new subdivisions developed for the period, however, with the expansion of Camella Homes in Sorsogon and establishment of Eco Homes in Albay, this sector is expected to grow in the future.
Tourism which falls under Other Services, continues to expand. The aggressive approach of the region in boosting its tourism sector has been effective in increasing tourist arrival, marking a growth of 19.52 percent in 2016. The province of Camarines Sur emerged with the most number of tourists while Masbate had the least number of visitors. The region has been the favorite venue for events, such as the Bicol Regional Tourism Summit held in Naga City; Miss Earth International 2016 in Bulusan, Sorsogon; and XTerra Off-road Triathlon and Palarong Pambansa in Albay. Le Tour de Filipinas, a cycling tournament, was also held in the provinces of Albay, Camarines Sur, Camarines Norte, and Sorsogon.
The government has been in support of the sector through tourism infrastructure, which opened access to tourism destinations. New road opening and road improvement allowed tourists to reach even the remotest destinations. Among the tourism infrastructure programs are the expansion of Department of Tourism-Department of Public Works and Highways (DOT-DPWH) Convergence, Pres. Cory Aquino Boulevard in Daet, Camarines Norte, Legazpi-Sto. Domingo-Tabaco-Tiwi-Camarines Sur Boundary Road in Tiwi, Albay, and Access Road leading to Caramoan-Paniman Road leading to Caramoan Island. The increase in the daily flights in Legazpi City likewise contributed to the increased tourist arrivals. It increased from six flights to eight flights daily, utilizing night time slot. The night lights in Legazpi Airport were installed by the Civil Aviation Authority of the Philippines (CAAP), making the evening flight operational.
The expansion in the tourism sector, however, was not enough to fuel the growth for Other Services which slowed down to 9.7 percent from 14.2 percent in 2015. This implies that other services such as education, health and social work, hotels and restaurant, and printing have become stable in terms of capital infusion.
Industry sector still grew to P38.21 billion in 2016 but at a slower rate of 8.4 percent compared to 25.0 percent expansion in 2015. Manufacturing, more specifically in the food sector, boosted the Industry’s growth, surging by 12.0 percent from 3.7 percent in 2015. The growth can be attributed to a confluence of factors initiated by both private and government sectors, such as product development, capability building of MSMEs, conduct of trade and business missions and implementation of Shared Service Facilities (SSF) and Go Negosyo of Department of Trade and Industry (DTI). The SSF provided MSMEs with machinery, equipment, tools, systems, skills and knowledge under a shared system to improve their competitiveness. Additional Negosyo Centers were established in the various municipalities in the region to facilitate registration of business application. The centers are responsible for promoting ease of doing business and facilitating access to services for MSME. There were 5,492 MSMEs assisted by the DTI in 2016. Further, business name registration in the region improved during the first semester of 2016. A total of 8,301 business names were registered, with Camarines Sur having the highest at 2,469; followed by Albay (2,252); Sorsogon (1,254); Camarines Norte (971); Masbate (806); and Catanduanes (550). Naga City was also awarded as the most competitive component city nationwide by the National Competitiveness Council. Legazpi City also ranked third.
Growth in Mining and quarrying improved to 9.0 percent in 2016. It contributed to the region’s economy in terms of higher production of gold and silver minerals at 7.24 percent and 3.25 percent, respectively. Gold panning in Aroroy, Masbate, as well as in Camarines Norte, is notable. Cement production increased during the first semester of 2016 to 8.9 million bags, but was not sustained in the succeeding semester with only 8.1 million bags. The decline in cement production during the second semester can be attributed to the low production of shale clay which is one of the raw materials in cement manufacture.
Construction slowed down to 7.1 percent from 42.5 percent in 2015. The slower growth may be attributed to a high base in 2015. As of 2016, only 64 projects under the DPWH were completed, while 1,217 projects are ongoing. Widening of roads and bridges along the Maharlika Highway, dubbed as Asian Highway 26 (AH26), is ongoing, along with the Catanduanes Circumferential Road, Albay- Camarines Sur diversion road, Pio Duran–Donsol, GUICADALE Platform road networks. The construction of the Bicol International Airport remained to be lagging at 62 percent project completion. The Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) implemented by DSWD and funded by Asian Development Bank and World Bank continues to implement Cycles 1 and 2. As of December 2016, of the identified 1,569 sub projects, it recorded a 47.12 physical accomplishment. Under the Bottom-up Budgeting program, only 99 projects were completed in 2016 compared to the almost 300 projects in 2015.
Electricity, Gas and Water Supply (EGWS) also slowed down to 9.0 percent from 14.1 percent last year. The slower growth may be attributed to typhoon Nina that caused power interruptions in the provinces of Camarines Sur, Albay, Sorsogon and Catanduanes.
The AHFF sector shares 20 percent of the GRDP. The sector experienced improvement but still at negative 0.2 percent growth in 2016. The growth can be attributed to 1.4 percent increase in Agriculture and Forestry. Production of major crops like palay and corn accelerated by 0.87 percent and 6.34 percent, respectively. The increase in corn production can be attributed to the adoption of technologies using improved corn varieties and state-of-the-art post harvest facilities.
Growth was evident in livestock production, particularly in carabao (0.4 percent), cattle (3.12 percent) and goat (4.41 percent). Poultry production also improved, especially chicken and duck eggs at 5.49 percent and 9.14 percent, respectively.
Fishing experienced a slight improvement but remains to stumble at a negative growth of 4.8 percent. The decline in fish catch may be attributed to the frequent gale warnings due to adverse weather conditions that affected the region during the period. The growth in this subsector is not accurately captured because of the fish catch not accounted for in the region and instead recorded in the neighboring regions.
In general, 2016 has been a turning point, not only for the region but for the entire country as the nation is in an adjustment period under the new administration. It somehow affected the performance of the region.
What remains as a challenge for the region is to create an environment that is conducive for investments. The Bicol Regional Development Plan 2017-2022 is supportive of the proposed policy reforms in the Philippine Development Plan, particularly on the amendment of the omnibus investment code. Investments in agriculture, manufacturing, tourism, and social services shall continuously push through. These are all laid in the Regional Development Plan 2017-2022 which is anchored on the Ambisyon Natin 2040 to attain a “Matatag, Maginhawa at Panatag na buhay para sa lahat.”
The challenge calls for a convergence of efforts by both the private and government sectors to sustain the gains that Bicol has achieved in the last three years. The new administration is pushing for the implementation of economic reforms particularly on fighting corruption to provide higher funds for quality infrastructure and more investments in people through economic and social services.
Tourism remains to be an important economic activity with its development initiatives continuously and aggressively being pursued in the region. The local tourism flagship festivals in 2017 will showcase the diverse and rich cultural traditions of Filipinos. The activities will increase influx of tourists and eventually, will have spillover effect in trading. In support, the local government units will continuously prepare project proposals for priority tourism access roads and facilities under the DOT-DPWH convergence and Tourism Infrastructure and Enterprise Zone Authority. While the national target of ten million foreign tourists was not attained, the region reached its target of one million foreign tourist arrival in 2016. This is a milestone for the Bicol region as this is the first time that one million foreign tourists were recorded to have visited the region.
Thus, the challenge in the Bicol region is how to sustain the economic gains and how to translate these gains to an improved standard of living of Bicolanos.