NEDA Region 5 Statement on the Bicol Economy in 2015

The regional economy of Bicol for the year 2015 recorded the highest growth rate it has ever attained in terms of gross regional domestic product (GRDP). As reported by the Philippine Statistics Authority, the 8.4 percent growth of the GRDP puts the region on top of all regions. This is almost double the growth in 2014 of 4.3 percent and exceeded the Regional Development Plan target of 6.7 percent.

 The growth of the region’s economy was driven by the Industry sector, which accelerated from 5.3 percent in 2014 to 23.7 percent in 2015. The Services sector also grew faster from 5.4 percent in 2014 to 7.5 percent in 2015, while the Agriculture, Hunting, Forestry and Fishing sector contracted by 2.3 percent in 2015 from a 1.1 percent growth in 2014.

 Services contributed the biggest share to the region’s economy with 56.1 percent, but its share declined from 2014 by 0.5 percentage point.  Industry’s share of 22.5 percent in 2015 improved by 2.8 percentage points from 19.7 percent in 2014.  Agriculture, Hunting, Forestry and Fishing contributed 21.3 percent, but its share to the total economy declined by 2.4 percentage points.

 The accelerated growth of the Industry sector was fueled by Construction which grew from 1.9 percent in 2014 to 39.7 percent in 2015.  Government spending for infrastructure and other economic and social services improved. Public investments in the widening of 52 kilometers of roads and 846 linear meters of bridges along the Maharlika Highway, dubbed as Asian Highway 26 under the cooperative project among countries in Asia, reached P1.69 billion in 2015. Other infrastructure projects implemented in 2015 are the Catanduanes Circumferential Road; Albay- Camarines Sur diversion road, Pio Duran – Donsol, GUICADALE Platform road networks. The Bicol International Airport project received P1.55 billion in 2015 for airside construction.

 Under the Bottom up Budgeting program there were 239 projects completed in 2015 amounting to P333 million. Other major projects include the Bicol Medical Center in Naga City, the Philippine Rural Development Program projects in Camarines Norte and the 27 road projects costing P1.48 billion under the DOT-DPWH convergence program. Other capital outlays that boosted the sector was the construction of 1,370 classrooms for kindergarten, elementary and secondary schools and 1,532 classrooms for senior high school regionwide; construction of 221 community centers or multi-purpose buildings, 217 flood/river control structures, and 215 school buildings under the KALAHI-CIDSS or Kapit Bisig Laban sa Kahirapan Comprehensive Integrated Delivery of Social Services regionwide; completion of 12,893 housing units by shelter agencies and 7,843 core shelter units under the Core Shelter Assistance Program of the DSWD.

 Under the Legazpi City Urban Drainage Improvement Project which is a major flood mitigating project of DPWH Region 5, three projects implemented in 2015 include the construction of seawall with joggers and vehicle lane (Legazpi Port to Rawis), construction of dike along Ruran, Sagumayon and Macabalo tributaries including Cabangan bridge, and completion of Victory Pumping station including construction of dike. The Tibu pumping station Phase I was completed in February.

Mining and quarrying rebounded to 8.5 percent from a contraction of 19.1 percent in 2014. As of December 2015, there were 28 approved mineral production sharing agreements producing mineral commodities ranging from limestone, perlite, clay, gypsum, copper, zinc, iron, chromite, silver, and gold.  In the second semester 2015 report from the Masbate Gold Project in Aroroy, Masbate, total sales value of P8.2 billion for 4,899 kilograms of gold and P87 million for 3,78 kilograms of silver were generated by Filminera Resources Corporation and the Philippine Gold Processing and Refining Corporation.

 Growth in manufacturing, on the other hand, decelerated from 19 percent in 2014 to 3.7 percent in 2015.  The Mines and Geosciences Bureau reported that cement production of Goodfound Cement Corporation in Camalig, Albay, a large producer of cement in the region, declined in 2015 due to lack of shale clay which is a raw material for cement production. The 5.5 million bags of cement produced from January to October in 2015 amounted to 51.5 percent less than the production in the second semester of 2014.

 The growth in the Services sector was led by the expansion of Other Services and Transportation, Storage and Communication.  The expansion of Other services from 3.7 percent to 12.1 percent was fueled by the increase in tourist arrival by 21.5 percent from 3.72 million in 2014 to 4.52 million in 2015. This includes about 868,000 foreign tourists and 3.65 million domestic tourists.

 Albay topped the list in terms of growth in tourist arrival, an increase of 47.8 percent from almost 959,000 tourist arrival in 2014 to 1.41 million in 2015. The province of Camarines Sur remains as the most visited tourist destination in the region with 45.5 percent contribution to the regional total or 2.06 million tourist arrival. The increase in tourist arrival in the region may be attributed to the hosting of several tourism-related events, such as the Pacific Asia Travel Association New Tourism Forum 2015, Phil. Institute of Certified Public Accountants Luzon Area Conference, National ICT Summit, PASUC Culture and Arts Festival, 7th National Tripartite Conference for Cooperative Development, and Annual National Assembly of the Catholic Media Network.

 The contributing factors to the robust tourism growth are the convergence of agencies in the Bicol Regional Tourism Committee under the Regional Development Council, the alliance of provinces under the Albay-Masbate-Sorsogon (ALMASOR) and Camarines Norte-Camarines Sur-Catanduanes (Triple C) tourism links, the strategic directions provided by the ALMASOR and TRIPLE C area development plans, the intensive promotional activities and marketing of the region as MICE destination, and the massive information and education campaign.

 Other Services include investments in people. In 2015, a total of about 369,000 poor households received conditional cash transfers under the Pantawid Pamilyang Pilipino Program (4Ps) with a maximum amount of P15,000 per household with three qualified children. The conduct of the 2015 Listahanan assessment under the 4Ps and the 2015 population census generated jobs in the Other Services sector.  Primary care benefit package called Tamang Serbisyo sa Kalusugan ng Pamilya or Tsekap was provided to indigents and sponsored members of Philhealth in all barangay health stations regionwide.  A total of 1.3 million poor households were registered under the National Health Insurance Program and benefited from the no billing policy in the availment of health care services in the hospitals and other health facilities in the region.

 The growth in Transportation, Storage and Communications subsector accelerated by 10.1 percent from 3.9 in 2014.  The opening of car sales centers in the region may have contributed to the increase in the number of registered vehicles by 11.4 percent from 8.7 percent in 2014.  The growth in the transportation subsector may also be due to the increased arrival of visitors in the region, especially in view of the national and local elections.

 Public and private investments in sectors that contributed to the growth of the region’s economy were translated into increased employment of about 78,000 more people from 2014 to 2015.  The record-low inflation, which averaged one percent in 2015 may have also contributed to the growth in household consumption.

 The slower growth of Agriculture and Forestry by 0.4 percent and the contraction in fishing by 9.4 percent brought the Agriculture, Hunting, Forestry and Fishing sector down to negative 2.3 percent. The year 2015 saw the onset of El Niño which affected some areas in the region until the end of 2015.  The AHFF sector is vulnerable to weather shocks which were observed to have increased in frequency, intensity and duration. The effect of El Niño reduced the yield of rice from 3.82 to 3.69 metric tons per hectare and corn from 2.51 to 2.37 metric tons per hectare. Production of other agricultural commodities also went down: for coconut by 18,668 metric tons, high value crops by 8,862 metric tons, and abaca by 2,751 metric tons. Livestock and poultry were not affected by the El Niño except for chicken which showed a decline in production by 80,000 heads.

 The impact of Typhoons Amang, Glenda and Ruby in 2014 was still felt by the AHFF sector in 2015. In Camarines Sur, the decrease in palay production was brought by Typhoon Amang where 8,800 hectares of palay farms were affected, of which 4,400 hectares were totally damaged. The continued decline in production of fish and other marine products was due to inclement weather and the ban on fishing sardines during the three month closed season of sardines in Asid Gulf and Burias Pass.

 Looking ahead, it is everyone’s hope that the new administration will sustain the implementation of economic reforms that the previous administration has instituted which enabled the government to provide funds for higher requirements for infrastructure upgrading and more investments in people through economic and social services.

 Tourism will continue to be the major growth driver of the region’s economy as more tourist destinations became accessible with the DOT-DPWH convergence program.  The much needed employment opportunities are expected to increase as more sustainable jobs will be created in the industry sector, specifically in the manufacturing subsector. More investments are expected to come in with the recognition of Naga City as the most competitive city and Legazpi City as third most competitive during the recent Cities and Municipalities Competitiveness Index.

 The Bicol region, still having a high incidence of poverty and with the highest underemployment rate, is faced with a big challenge of translating the economic gains to higher-value jobs and higher per capita income to significantly uplift the quality of life of the Bicolanos.

 Economic growth is not the only determinant of poverty reduction. The gross regional domestic product only determines the value of goods and services produced during the year.  In terms of current value of P281 billion worth of goods and services produced, the region ranked 10th among 17 regions in the country, with the NCR having the highest at P5 trillion. In terms of GRDP per capita, the region posted the second lowest at P46,000 only besting the Autonomous Region for Muslim Mindanao with P26,000.  With a 5.9 percent share in the national population, the 2.1 percent share in the national gross domestic product is considerably insufficient to have a significant dent in poverty reduction.

 To address poverty reduction, the following preconditions are necessary: (1) more people are engaged in productive activities where goods and services are sustainably produced and high paying jobs and livelihood opportunities are available for the labor force; (2) adequate and quality social services are availed by more people, which means that more people are healthier, equipped with productive skills, live in decent houses, and are provided with social protection; (3) reliable infrastructure facilities and services are used by the people, which means that transport systems are integrated, efficient and able to handle increased volume of passengers and cargo; communication facilities and services are efficient; the power supply is sustainable, stable and affordable; and the supply of irrigation water is sufficient and delivered on time; and (4) good governance and sustainable development are practiced in the region, which means that a conducive environment is provided for private investments, the communities are prepared for disasters and the natural environment is able to sustain the needs of the future generations.  If all these preconditions are present, then there would be better lives for us Bicolanos.