Bicol’s economy grew by 4.2 percent in 2014

   The economy of the Bicol region, as measured by the gross regional domestic product (GRDP), expanded by 4.2 percent in 2014. The services sector accounted for the biggest share to the region’s economy at 56.6 percent. The share of the agriculture, hunting, forestry and fishing (AHFF) sector was at 23.7 percent and the industry sector at 19.8 percent. In terms of contribution to the 4.2 percent growth, the services sector contributed 2.9 percentage points. The industry and AHFF sectors contributed 1.1 percentage points and 0.2 percentage point, respectively.

   The 4.2 percent growth in GRDP was slower than the 8.1 percent growth in 2013 due to decelerated growths in the three sectors. The AHFF sector managed a 0.9 percent growth from a 4.4 percent growth in 2013. The industry sector slowed down to 5.6 percent from 10.8 percent. Likewise, growth in the services sector decelerated to 5.2 percent from 9.0 percent.

   Among the AHFF sub-sectors, agriculture grew by 1.8 percent. This is attributed to the increase in palay and corn production by 1.2 percent and 5.1 percent, respectively. The implementation of 144 national and communal irrigation system projects regionwide contributed to the increase in farm output. Abaca production increased substantially by 20 percent. With government interventions on abaca rehabilitation, the region contributed 42.3 percent to the national production and remains to be the top abaca-producing region in the country since 2009. Among the provinces, Catanduanes led in abaca production with 77 percent share in the regional output. The additional 159 hectares planted to abaca contributed to increased production. This involved about 150 farmers. The increase in farm gate price from P36.91 in 2013 to P42.53 in 2014 also contributed to increase in gross value added for abaca. For the coconut industry, the onslaught of tropical storm Glenda caused the decrease in production.

   The modest growth in the agriculture sub-sector was negated by fishing, which plunged to negative 1.3 percent from a 2.0 percent growth in 2013. The decline in production of fish and other marine products was due to inclement weather condition and frequent gale warnings that prevented fishing operations, particularly in Camarines Norte, Catanduanes, Masbate and Sorsogon.

   Among the industry sub-sectors, growth in manufacturing accelerated to 19.0 percent from 9.6 percent. Likewise, the electricity, gas and water supply (EGWS) sub-sector grew by 13.7 percent from 12.1 percent in 2013. The growth in manufacturing was attributed to the higher production of processed food and beverages by micro, small and medium enterprises that are provided with shared service facilities and technical assistance by the Department of Trade and Industry and the Department of Science and Technology. The Ibalong Resources and Development Corporation/Goodfound Cement Corporation in Albay produced 16 million cement bags in 2014, generating P3.2 billion in total sales. The cement production was used largely for the rehabilitation of Eastern Visayas.

   The faster growths in manufacturing and EGWS sub-sectors were offset by the negative growth in mining and quarrying and a slower growth in construction. Mining and quarrying dropped further from negative 5.1 percent in 2013 to negative 25 percent in 2014. This was due to the closure of the Rapu-Rapu Polymetallic Project in Albay in November 2013, and the decrease in gold dore production by Filminera Resources Corporation/Masbate Gold Project in Aroroy due to repair of self autogenous grinding mill shell/casing of its processing plant.

   The slowdown in construction from 15.1 percent to 4.5 percent was due primarily to underspending of the government and delay in the release of public funds for the construction of public works and other major programs of the government. Based on the report from the Department of Budget and Management, out of the approved P2.2 trillion national budget in 2014, only P1.9 trillion was spent by the government, leaving P300 billion unspent. In spite of this, major projects were implemented in 2014, such as the road widening project and improvements in major sea ports.

   Among the services sub-sectors, only public administration and defense, compulsory social security recorded an accelerated growth rate of 6.3 percent from 4.4 percent in 2013. The impact of Typhoon Glenda in July 2014 considerably affected the real estate, renting and business administration sub-sector, which registered the slowest growth, due to the damage of about 42,000 houses that comprised around 90 percent of the real estate sub-sector. The growth in other services was attributed to 3.72 million tourist arrivals in 2014, with 753,329 foreign tourists and 2.97 million domestic tourists. The region’s tourism industry was supported by the airlines industry when eight cycle inaugural flights of chartered planes from Guangzhou, China to Legazpi and vice versa, and from Xiamen, China to Legazpi and vice versa, opened the door for Chinese tourists to access Bicol region through the Legazpi Airport. A negotiation during the Taiwan Tourism Sales Mission was made among Philippine Air Lines, Oriental Hotel and Department of Tourism Region 5 for possible opening of flight from Taipei to Legazpi City. Under the Tourism Road Infrastructure Project Prioritization program, a total of 25 road projects costing P1.5 billion were implemented in 2014, 13 of which were completed and 12 are still on-going.

   In spite of a slower economic growth, employment rate increased from 93.8 percent in October 2013 to 95.1 percent in October 2014. For the same period, underemployment rate in the region, or the proportion of employed persons wanting more hours of work to total employed persons, decreased from 37.7 percent to 30.4 percent. Nonetheless, Bicol still faces the challenge of lack of quality employment to attain regional development.  Investments that could have provided quality jobs are hindered by the high cost of doing business in the region, high cost of electricity, poor infrastructure, and frequent typhoons and monsoon rains. The Securities and Exchange Commission registered a significant decline in investments from P1.6 billion in 2013 to P266 million in 2014. The conduct of the Asia-Pacific Economic Cooperation conference and other big events in the region that were cancelled due to typhoons and inclement weather could have been opportunities to promote tourism and investment in the region.

   The region takes on the challenge of regaining the faster growth attained in the past two years. More importantly, economic growth should be translated to more jobs and higher per capita income. The Bicol regional development plan provides the direction towards this end with better infrastructure, stable power supply, favorable investment climate, competitive government sector, productive business sector, peaceful and orderly communities, and the practice of good governance in the region. It is recognized, however, that government cannot do this alone. Greater private sector and people participation in these undertakings are critical in accelerating the economic growth of the Bicol region.