NEDA VIII Statement on the
2022 Economic Performance of Eastern Visayas
27 April 2023 | Summit Hotel, Tacloban City
Colleagues from the Philippine Statistics Authority (PSA), fellow workers in the national and local governments, partners from the private sector and the academe, dear friends from the media, ladies and gentlemen, malipayon nga adlaw ha aton ngatanan!
Indeed, it is a happy day for Eastern Visayas. Based on the latest indicators, our economy is poised for a full recovery. Malamrag it at kabubuwason!
As earlier announced by PSA VIII, the Eastern Visayas economy accelerated by a solid 6.8 percent in 2022, or 0.8 percentage points faster than our 6.0 percent growth last year. This is our third highest upsurge since the turn of the millennium.
Like the entire Philippines, the regional economy in 2022 further expanded amid global headwinds of the continuing Russia-Ukraine conflict and the tightening of the United States Federal Reserve’s monetary policy (which resulted in the depreciation of the Philippine peso versus the US dollar), and the local challenges we face such as weather disturbances and the African Swine Fever (ASF).
So, what brought about this growth? Our robust performance was triggered by the complete lifting of mobility restrictions (which led to re-opened and new businesses) and revenge spending after pent-up demand during the height of the pandemic as well as election spending (which increased consumer consumption).
Looking more closely at our productive sectors, we see the ripple effect of their components. As in the past ten years, services have remained the primary growth driver of our regional economy. In 2022, the sector contributed the lion’s share of 47.2 percent, while industry and AFF accounted for 40.6 and 12.2 percent, respectively.
The services sector sustained its momentum with a double-digit upturn of 10.4 percent from its gross value added in the previous year. This is the highest growth of the sector in two decades. All services subsectors likewise grew, although at varying levels.
Accommodation and service activities posted the fastest annual growth at 46.3 percent. This unprecedented boom is a welcome turnaround after nearly 30 percent of our registered business establishments in the region have stopped operating or have permanently closed during the peak of the pandemic.
Transportation and storage also flourished at a record rate of 25.0 percent.
Indeed, following the full reopening of our economy, easing of travel restrictions, and resumption of full face-to-face classes, the renewed vibrance of our local business scene is now apparent.
Other services, financial and insurance activities, and wholesale and retail trade also exhibited notable double-digit gains of 16.3, 12.6, and 11.1 percent, respectively. The promising performance of other services is attributable to the region’s burgeoning gig or freelance and creative economy. The gig economy is composed of virtual assistants, digital illustrators, online tutors, and other workers hired on a project-by-project or task-by-task basis and often facilitated through digital platforms and online marketplaces.
Additionally, growth in financial and insurance activities may be traced to increased financial transactions brought about by the resurgence of economic activities and the improved accessibility and inclusivity of traditional and digital banking services and e-wallets.
Latest data from the Department of Trade and Industry VIII showed that there were 18,080 new and renewed business names that registered in 2022 regionwide. Adding optimism to our prospects, the Department of Tourism VIII also reported that, in the same year, we have breached anew the one-million mark in terms of tourist arrivals in Region VIII. We did it already before COVID-19 hit us, but with the pandemic, tourism hugely slumped. Now, we hit again the one-million mark.
The industry sector, on the other hand, remained strong, with a 7.2 percent acceleration in 2022. This upbeat performance is a result of positive growths across all industrial subsectors.
Like the previous year, manufacturing remains the top contributor to the regional economy. In 2022, the subsector chipped in the largest share of 17.1 percent, owing to its continued expansion, though at a much slower rate of 2.9 percent compared to 9.2 percent last year. This may be explained by the lower production of copper and its articles because of the maintenance shutdown of PASAR from May to July.
Construction also grew at a faster pace of 12.7 percent, a 2.4-point acceleration from 2021, partly due to the reconstruction activities in areas devastated by Typhoon Odette, particularly in Leyte and Southern Leyte.
However, the agriculture, forestry, and fishing (AFF) sector plunged to a negative 6.2 percent growth in 2022 from a positive 0.1 percent in 2021. Five other regions, notably including all the Visayas regions, also decelerated in the AFF sector. Across the country, Eastern Visayas posted the biggest AFF contraction in 2022. This overall negative performance of agri-fisheries in the region is primarily attributable to numerous challenges hounding the sector. These include the ill effects of extreme weather events, unusual price spikes of fuel and other farm inputs (such as inorganic fertilizers and feeds), and the threat of deadly animal diseases. As a result of all these, AFF production declined.
The magnitude of damage caused by Typhoons Jolina and Odette in the latter part of 2021 adversely affected our agricultural output in the first quarter of 2022. As the sector was beginning to recover from the losses incurred, Typhoon Agaton brought persistent rainfall during the second quarter, causing severe flooding and disastrous landslides in several farming and fishing communities in the region, particularly in Abuyog and Baybay City in Leyte. Moreover, Typhoon Paeng hit the region in the fourth quarter, causing significant crop damage. All these led to the drop of the region’s rice sufficiency level and decreased output of all priority crops, save for cassava and pineapple.
The livestock and poultry subsectors also continued to contract, except for carabao production. Again, this is primarily due to the occurrence of diseases, such as ASF and bird flu, and higher prices of feeds.
As for the fisheries subsector, the total value of fishery production declined by 3.1 percent in 2022. This may have been a consequence of a slowdown in municipal fishing and aquaculture harvest at 11.5 percent and 77.7 percent, respectively. The reduced harvest can be traced to the spike in fuel prices and weather disturbances. Boats of municipal or small-scale fishers are unable to withstand strong and big waves, specifically in areas facing the Pacific and Samar Sea up to San Bernardino Strait. Moreover, typhoons damaged the seaweed industry – the primary contributor to aquaculture production – resulting in the negative performance of the fisheries subsector.
Meanwhile, in the forestry subsector, the volume and value of forest products also went down by 9.0 percent and 6.1 percent, respectively. This decrease may be attributed to the prohibition imposed by the provincial government of Southern Leyte on the transportation of logs in and out of the province in the onslaught of Typhoon Odette. Felled logs were used for the repair and reconstruction of dwellings and other structures.
What I have talked about so far are our circumstances based on the GRDP, which are all about income or earnings. Now, let us look at the expenditure side of the region’s economy based on another indicator called Gross Regional Domestic Expenditure (GRDE), also presented by PSA earlier.
Household consumption continued to expand by 5.6 percent, thus solidifying its 88.6 percent dominance over the rest of the expenditure components. This expansion is mainly driven by, again, revenge spending due to pent-up demand during the pandemic, election spending, and the resumption of face-to-face classes. This matches the GRDP growth rate, given that more household spending results in a more vibrant economy. In fact, it somehow subdued the dampening effect of the 6.6 percent inflation in 2022.
However, contrary to dynamic household spending, government spending slowed down at 1.5 percent, which is expected as pandemic measures placed immense pressure on the fiscal space.
Meanwhile, our gross capital formation, which shows how much investment flows into the region, grew at a remarkable 23.4 percent – up by 26.3 percentage points from the previous year’s negative 2.8 percent. The bulk of this upswing was investments in construction, which grew by 14.5 percent in 2022. This is attributable to the 41.9 percent growth in the total value of non-residential buildings in the first quarter alone. The increase in the construction of commercial, industrial, agricultural, and institutional buildings signals stronger business and investor confidence in the region following the full reopening of our economy.
Moreover, we have yet another reason to celebrate. Our robust economic growth also came with more jobs for Eastern Visayans. Our booming labor market brought down joblessness in the region by 1.5 points from 6.6 percent in 2021. While the employment rate was still short of the pre-pandemic figure of 95.6 percent in 2019, 121,700 more workers were employed in 2022 compared to 2019. Further, our underemployment rate, which measures the quality of jobs in the region, was 18.3 percent in 2022, a reduction of 2.1 points from 20.3 percent in 2019. Simply put, this means that more workers were able to find well-paying and stable jobs in private establishments during the year.
Moving forward, we do not expect a future without difficulties. With COVID still here, the combination of sticky inflation, a smaller fiscal space, and imminent threats of natural hazards – Eastern Visayas being a highly vulnerable region – will challenge our current growth in the coming years. But our gains today cement the foundation for our development trajectory in the coming years. If sustained, we will attain our short-term RDP growth target of 6.0 to 7.0 percent for 2023.
Fully cognizant of the challenges and opportunities before us, the Regional Development Council VIII formulated the Eastern Visayas Regional Development Plan (EV RDP) 2023-2028. Crafted through a whole-of-society and multi-stakeholder approach, this EV RDP serves as the overall development blueprint of Eastern Visayas for the next six years. It contains the government’s policies, strategies, programs, and legislative priorities in support of and consistent with the Eight-Point Socioeconomic Agenda of President Ferdinand R. Marcos, Jr. and the Philippine Development Plan 2023-2028. It is also hoped to bring us nearer to AmBisyon Natin 2040, our long-term vision of having a matatag, maginhawa, at panatag na buhay para sa lahat.
This new RDP articulates our key strategies for economic and social transformation in the region. But, of course, the EV RDP will remain only a plan if we do not put it into action. As I always say: Plan matters, implementation matters more, and results matter most. Therefore, we must ensure concerted actions to lead us to our vision of becoming a resilient and prosperous Eastern Visayas where people enjoy equitable opportunities for sustainable human development.
Nakayanan naton hi Super Typhoon Yolanda in 2013. Nakayanan ta liwat ngan padayon nga kinakaya ini nga COVID-19 pandemic. Sanglit, pagburublig kita para han padayon nga pag-uswag han Sinirangan Bisayas!
Damo nga salamat ngan maupay nga aga ha aton ngatanan.
MEYLENE C. ROSALES
Regional Director, NEDA VIII