ATTY. BONIFACIO G. UY
NEDA VIII Regional Director
Press Conference on the 2015 Performance of the
Eastern Visayas Regional Economy
Hotel Alejandro, Tacloban City
28 July 2016, 10:00 AM
Members of the media, friends and colleagues in the government, development partners, ladies and gentlemen, good morning.
As earlier presented by the Philippine Statistics Authority VIII, I am pleased to report that the year 2015 saw a 3.9 percent acceleration in Eastern Visayas’ economy, as measured by the Gross Regional Domestic Product (GRDP). This turnaround is significant for a region that incurred a 2.4 percent contraction in 2014, during which the severe impact of Supertyphoon Yolanda to our productive sector was felt. In a pragmatic sense, the failure to meet the target economic growth range of 4.54 to 5.54 percent this year was understandable, especially when a disaster as great as Yolanda was not anticipated at the time the medium-term growth target was set. In fact, the more than 2 percent growth this year was beyond expectations, calling us to sustain this gain in order to catalyze growth that is inclusive and not hollow in the ensuing years.
We cannot disregard the fact that in the span of two years since Yolanda struck the region, some segments of the regional economy are yet to fully recover. In fact, per capita income in 2015 was still lower than in the pre-Yolanda period. Nonetheless, we cannot also overlook the gains we reaped, in one way or another, as the abundance of post-disaster reconstruction activities converge over time, resulting in intersectoral positive spillover effects such as between the construction and financial subsectors. Partial and preliminary data showed that at least PhP28 billion has already been released to regional agencies implementing the Yolanda Comprehensive Rehabilitation and Recovery Plan as of June 15, 2016.
The year 2015 was not completely devoid of external risks that included natural threats of dry spell and typhoons, as well as global economic slowdown. However, the internal impetus coming from rehabilitation activities, as well as the revival of the business sector, induced economic growth in 2015. We are optimistic that the convergence of efforts from both the public and private sectors will trigger higher growth next year, especially in achieving or even exceeding the pre-Yolanda targets on GRDP.
On the basis of sectoral composition, high-value contribution mainly came from the service and industry sectors, comprising 41. 9 percent and 41.4 percent, respectively, to the region’s gross production. The service sector increased its share to the economic pie since 2013 while the industry sector remained stable.
With a 6.8 percent real growth, the service sector is the strongest driver of the regional economy, which also generated the most number of jobs as evidenced by more than 45 percent absorption of the region’s working population as of the second half of 2015. We also observed gradual growth in the value-added share of most components of the service sector, primarily accounted for by the resurgence of businesses. For instance, in Tacloban City, the region’s capital, we see newly-established hotels and food establishments, which is evident of a vibrant service-oriented economy.
The contribution of transportation and logistics to the regional economy accelerated by 10.9 percent, the highest among the service subcomponents. We noted an increase in cargo movement in both aviation and shipping industries, with the latter primarily fueled by the domestic demand for construction materials. On the other hand, land transport services and facilities were already operational in 2015 after being disrupted by Yolanda. New registrations of motor vehicles also posted an increase of around 35 percent which, if taken as a proxy indicator, connotes high demand for vehicles. The latter’s positive implication to trade and the resumption of wholesale and retail businesses, mostly in urban areas, signal the gradual recovery of the trade subsector with a 7.2 percent growth, a reversal from the 2.8 percent shortfall in 2014. Business name registration increased by 25 percent, reaching a total of 11,230 registrations. Another visible indication was the resumed operations of major shopping malls affected by Yolanda, most of which began re-opening in the middle towards the end of 2014.
The financial intermediation subsector increased by 1.5 percentage points from the previous year’s growth. We highlight the positive performance of the banking sector in particular. On an annual basis, an addition of 14 banks was recorded as of December 2015, bringing the total number of banks operating in the region to 200. Multiplier effects of government spending for rehabilitation as well as increased savings and volume of remittances from international human organizations propelled the growth in deposit liabilities by 20.3 percent to PhP84.9 billion for the same period. Loan portfolio also increased by 7.8 percent to PhP19.9 billion on the back of business expansion and increased consumer loans, which could be associated to the reconstruction activities in the aftermath of Yolanda.
On account of the ongoing implementation and delivery of social services and the sustained gains in the tourism sector, the component on Other Services posted growth of around 7 percent. This includes tourism. We are happy to note that tourism remained vibrant as tourism promotion activities intensified since 2014. This was manifested by an increase in tourist receipts by 31.8 percent to PhP9.3 billion as tourist arrivals registered 1.1 million, or equivalent to an addition of around 135,000 arrivals year-on-year. Hotel accommodations in major cities rose by 10 percent, with the highest increase in Tacloban City.
Meanwhile, the reversal in the industry sector’s performance from the 3.3 percent contraction in 2014 was due to the improvement in the industry’s components. The manufacturing subsector remains the biggest contributor to the industrial gross value, albeit production dipped by 3 percent year-on-year. However, this was better than the 16 percent slump in 2014, during which the Philippine Associated Smelting and Refining Corporation (PASAR), one of the heavy industries located in Leyte Industrial Development Estate (LIDE), has just resumed operation after a four-month shutdown in the aftermath of Yolanda. In 2015, external threat in the face of low demand for metallic products, as well as the maintenance shutdown and expansion activities of PASAR halfway through the year, deferred operations and lowered exports of copper cathode and sulfuric acid. The Philippine Phosphate Fertilizer Corporation (PhilPhos), also in LIDE, has yet to fully resume its normal operations after Yolanda. A slack external demand was also noted for coconut by-products towards the end of 2015.
The mining and quarrying subsector slowed down to 16.8 percent. Still reeling from the effects of frail export demand for metals, intermittent production characterized the mining industry in 2015. As a result, lower volume and value of chromite ore and iron concentrate was recorded.
The construction subsector continued to grow, albeit at a decelerating rate, amid sustained demand for sand and gravel as well as the increased domestic cargo throughput of cement and other construction materials. This must have been due to the fact that massive reconstruction activities in housing and relocation sites took place in 2014, the year after Yolanda struck the region.
The utilities sector regained its pace with a 10.5 percent increase in 2015. Although at a national scope, the Energy Development Corporation recorded an increase in electricity production by 7 percent. Likewise, the region’s electric cooperatives registered 30 percent growth in power distribution and sales before 2015 ends. Power and water supply facilities have already been operational, in contrast to the previous year when ongoing repair was conducted. We welcome the development in this component since it is crucial to the long-term growth in all the other sectors, the service and manufacturing subsectors in particular.
Unfortunately, broad-based growth was not realized given the setback in the agriculture and fisheries sector – a challenge that consistently hounds the region. Natural threats such as the effects of El Niǹo and the impact of Typhoon Nona have aggravated the already fragile agricultural production of the region after Yolanda. Nonetheless, the contraction in the agri-fishery sector’s gross value in 2015 was not as worse as the 12.7 percent shrinkage in 2014 as commodity growths were noted in corn, banana, pineapple, and root crops. Fishery production dropped by 1.9 percent, albeit marine municipal fisheries slowly inched up by around 1.7 percent. However, much needs to be done to achieve agricultural growth that could at least meet and eventually surpass the crop, livestock, and fishery production prior to Yolanda.
The overall economic trajectory should be taken as an optimism that fuels the prerequisite goal towards sustainable growth, which is ensuring an inclusive socio-economic recovery after Yolanda, within the short-term at least. With only five remaining months in the implementation of the current Regional Development Plan 2011-2016, the challenge remains in sustaining the growth strategies identified beforehand and those that emerge after Yolanda altered the region’s economic landscape. With Eastern Visayas being the second poorest in the country, we shall explore and harness our potentials as a region and deal with the challenges that could forestall the recovery momentum in the long run.
We expect domestic consumption to accelerate even more as headline inflation stabilized from the sharp increase in 2014 to 1.8 percent in 2015, the lowest in 10 years. However, we acknowledge the need to incline more on investment-driven initiatives to achieve economic growth that seeps into the bottom cluster of society.
Business optimism is apparent as the region received investment commitments valued at PhP7.5 billion in 2015, which was a triple-digit growth from the previous year’s value. In a detailed list by the Board of Investments (BOI), newly-registered projects in 2015 comprise investments on renewable energy, manufacturing, and agribusiness. While the benefits of these investments are yet to trickle down, there is a promise of growth in the years to come. This is supportive of our vision of diversifying industries, which is geared to increase industrial value and mitigate economic fluctuation when major industries slow down. Also, the localization of industry roadmaps led by the BOI to be realized through the proposed ecological industrial zone under the copper industry roadmap, among others, will open opportunities for employment and higher export revenues in the region.
We shall pursue structural transformation in a way that is balanced and can optimize the potential and productivity of major sectors in the economy. Manufacturing should be firmly linked to the agriculture sector to better scale up the latter’s economic contribution. Nonetheless, to maintain sustainable supply and increase agricultural incomes, there is a need for crop diversification as well as interventions meant to counter adverse climatic changes, among others. Modernizing the agriculture sector remains a priority.
The fisheries sector, in particular, will benefit from the recent enactment of Republic Act No. 10861, which aims to establish provincial fisheries and aquatic resources training, development, and product centers across Eastern Visayas. With such development, technical assistance on production and postharvest technology shall be closely provided to the fisher folks in the region.
Public spending is needed to catalyze growth. In 2016, the region gets the largest appropriation of funds amounting to PhP2.25 billion under the Bottom-Up Budgeting (BuB) program, which institutionalized people’s participation in the identification of priority projects and activities. Such funding will cover 1,105 projects on disaster risk reduction and management such as construction and upgrading of evacuation facilities, flood control, and social infrastructure as well as livelihood support.
When Typhoon Nona significantly affected Northern Samar in December 2015, the necessity for post-disaster recovery heightens. Lately, the Regional Development Council (RDC) VIII endorsed the 2016-2019 Typhoon Nona Rehabilitation and Recovery Plan, with an investment requirement of PhP17.98 billion, that shall serve as a blueprint for the multi-sectoral and inclusive recovery of Northern Samar.
While the Samar Island provinces have the highest poverty incidence in the region, the island itself is endowed with geographical advantage as the third largest island in the country and with vast potential on agriculture, forestry, marine resources, and tourism. In view of such stark contrast and the need to maximize Samar’s development, the RDC VIII created a task force to undertake a focused and in-depth analysis through the formulation of a Samar Island Development Agenda, which will materialize within the year.
In cognizance of the need for a unified and collective vision for the country, the NEDA facilitated the conduct of a nationwide survey to formulate the AmBisyon Natin 2040, which spells out the long-term development vision based on the aspirations of a common Filipino. Such initiative shall guide the development undertakings of the political administrations in the next two decades.
As the new administration ushers in, we expect major reforms across all sectors, be it institutional or economic in nature. We are optimistic that Eastern Visayas will benefit from the agenda put forward by the Duterte administration, which puts emphasis on regional and rural development, especially along the agriculture and manufacturing sectors.
On the part of NEDA VIII, as the secretariat of the RDC, we shall continue to exert our best efforts so that the development interventions of the different line agencies, LGUs, and other key players are in cadence and directed towards our common goal of economic growth and poverty reduction. One of our instruments towards this end is the formulation of the Regional Development Plan and the Regional Physical Framework Plan, which we shall focus on.
The synergy of efforts coupled with the competitive advantages and potentials of our region are among the determinants of the positive outlook we have in the years that follow. Let us altogether work on the realization of an economic growth that matters, not only to the few who are already privileged, but to everyone.
Salamat at mabuhay tayong lahat.