MEYLENE C. ROSALES
NEDA VIII OIC-Regional Director
PSA VIII Press Conference on the
2018 Gross Regional Domestic Product (GRDP)
C Pavillion, Brgy. Paraiso, San Jose District, Tacloban City
25 April 2019, 10:00 AM
Colleagues from the Philippine Statistics Authority (PSA), co-workers in government, partners from the private sector, dear friends from the media, ladies and gentlemen, good morning.
As the PSA has reported, Eastern Visayas’ economy grew by a solid 5.9 percent in 2018, hitting the upper limit of the Eastern Visayas Regional Development Plan (RDP) 2017-2022 growth forecast of 5.8-5.9 percent for the year. After Yolanda, this is the second consecutive year that the GRDP has expanded – an indication that the regional economy has now begun a growth trajectory. Our economic growth for 2018 went up three notches higher than last year. Although the region’s share to the Philippine GDP inched down, this was just by a miniscule 0.007 percentage point.
The composition of our growth shows signs of a services-driven economy in 2018, a shift from the industry-led economy in 2017. More than 44 percent of the region’s total economic output came from the Service sector. Its gross value added growth rate accelerated by 10.5 percent from last year’s 6.2 percent, surpassing the high-end target of 7.1 percent in the RDP. This upbeat performance stemmed largely from increases in all of its subsectors, particularly, the Other Services and the Transportation, Storage & Communications subsectors.
Other Services expanded by 13.0 percent, mainly on the back of flourishing tourism activities in the region. Tourist receipts went up by 5.2 percent from 2017 to 2018 – from PhP13.24 billion to PhP13.93 billion. The proliferation of hotels, restaurants, and other service establishments in the region’s major cities is a factor to this growth.
Another key contributor is the Transportation, Storage & Communications subsector, which raked in 10.8 percent to the GRDP. It accelerated by 9.6 percent in 2018 from the previous year’s 2.3 percent. This hike can be credited to more flights and passengers – flights increased by more than 28 percent and passengers by around 25 percent. Weight of annual domestic cargo and cargo throughput also went up – cargo by almost 22 percent and throughput by around 7. This is a sign of an active trade in the region.
The Industry sector, on the other hand, rebounded by 3.5 percent compared to its previous record of negative 1.8 percent. However, with this figure, we missed the 5.6 percent target in the RDP. A closer look at its subsectors tells us that the manufacturing subsector suffered a huge reduction of 19 percentage points. This could be explained by the emergency shutdown of the acid and smelting plants in PASAR during the latter part of the year. Other factors such as the sluggish export demand due to global economic slowdown and the rising prices of oil in the world market may have also dragged the growth of this subsector. Nonetheless, manufacturing remains to have the lion’s share in the 2018 GRDP at 18.3 percent.
Another subsector that contributed significantly to the GRDP is construction, which bounced back by 17.4 percent in 2018 from a dismal contraction of negative 21.2 percent in 2017. This growth was propelled by the massive public and private construction activities in the region. Valued at PhP9.4 billion, the private sector construction in Eastern Visayas registered gains of 11.1 percent from last year.
Similarly, the energy, gas and water subsector gained 10 percentage points. From the negative 3.2 percent in 2017, it picked up by 6.3 percent in 2018. This was due to resumed operation of the Leyte Geothermal Business Unit, though partial. It will be remembered that it was heavily damaged by the magnitude 6.5 earthquake in July 2017.
The financial system of the region remained robust in 2018. This is evidenced by the 9.19 percent growth in deposit liabilities and 14.77 percent growth in loans portfolio. The implementation of the third tranche of the Salary Standardization and Tax Reform for Acceleration and Inclusion (TRAIN) Law also contributed to this positive performance as it resulted in bigger net take-home pay of low to middle-income workers. Increase in the basic salary of military and uniformed personnel in the government, conditional cash transfers together with rice subsidies given to 280,992 poor households under the Pantawid Pamilyang Pilipino Program (4Ps) also pushed the growth of financial intermediation, and public administration and defense/compulsory social security subsectors.
Meanwhile, the performance of the agriculture, forestry and fishing (AFF) sector was a letdown. It reverted to negative 0.5 percent growth from a meager 0.1 percent in the previous year. This was a result of the 1.1 percent slowdown in the agriculture and forestry subsector and the 7.4 percent continued contraction of the fishery subsector. This could be traced further to weather disturbances, including excessive rainfall. This resulted in delayed planting by farmers. In addition, pest infestations, and the rising fuel prices that led to reduced number of fishing trips, among others, also adversely affected the AFF performance.
Looking forward, this consistent lacklustre growth of the AFF sector is a clear manifestation of a need for more thorough and cohesive structural reforms. The newly signed Rice Tariffication Law is a bold step in reforming the agriculture sector. It provides for the establishment of the Rice Competitiveness Enhancement Fund (RCEF), which will funnel PHP10 billion annually to the rice sector for the next six years. This is expected to improve the competitiveness and productivity of the sector, thereby increase farmers’ income.
We also need to attract more investments to generate more jobs and revenues. The signing into law of RA 11032, otherwise known as the Ease of Doing Business Act, last year will simplify the requirements and streamline procedures in starting and opening a business. This is anticipated to enhance business competitiveness, lessen bureaucracy, and reduce opportunities for corruption, thereby attract local and foreign businesses to invest in all parts of the country. However, we need to ensure efficient transport, communications, and the overall logistics network to support this endeavor.
We must also continue to be on the lookout for shocks, such as political uncertainties, global economic slowdowns, natural calamities, inflationary pressures, among others. Continued and timely implementation of social protection programs and other mitigating measures to address those must be in place to protect our lower-income households.
Election season this year is expected to increase spending and intensify economic activities in the region. Expenditures incurred during the campaign period are anticipated to drive economic growth. But beyond the projected growth, this important milestone in our citizenry is a crucial step in sustaining these recent developments. We must be able to choose leaders who have the genuine desire to uplift the socioeconomic condition of our people.
The significant economic gains in 2018, along with the substantial reduction in poverty incidence during the first semester of the same year, serve as a good platform in the updating of the Eastern Visayas Regional Development Plan 2017-2022, which will be done this year. We expect this to provide a strong foundation in the succeeding years. These remarkable achievements would not have been possible without the continued cooperation and strong support between and among citizens, the government, civil society and the private sector. However, we clearly recognize that there is still so much work to do. The government will remain steadfast in its work to sustain this momentum and eventually steer the region’s development towards achieving a matatag, maginhawa at panatag na buhay para sa lahat.