Industry slows down CV economy in 2017

CENTRAL Visayas failed to keep the momentum of 2016, growing 5.1 percent last year from 8.6 percent the year prior.

Data from the Philippine Statistics Authority (PSA) 7 showed that Industry expanded at a slower pace at three percent last year from 14.1 percent growth in 2016.

Mining and quarrying, construction, and electricity/gas/water supply, which are under the industry sector, pulled the region’s growth, which was forecast to grow between 6.4 percent and 6.9 percent last year.

Only manufacturing, a subsector in Industry, posted a positive growth of 5.5 percent last year but it was still a bit lower that the six percent growth it recorded in 2016.

Construction plunged from 38.3 percent in 2016 to -0.9 percent last year, with both public and private construction activities experiencing a slowdown.

“Authorities from the region’s real estate sector cited the complex process in securing permits and licenses as among the many reasons why starting construction projects fizzled in 2017. Some analysts also believe Cebu’s market for residential condominium is nearing the ceiling, as evidenced by slower rate of sales and increasing share of property buyers coming from areas outside Cebu,” said National Economic Development Authority (Neda) 7 Director Efren Carreon yesterday during the news conference on the 2017 Performance of the Regional Economy at Mezzo Hotel.

Carreon also told reporters that the decline in construction could be a natural cycle, similar to what happened in 2015 where construction activities went down but eventually picked up the following year.

“These are long gestating projects. Developers finish construction first and dispose them before they build another project again,” the Neda official said.

PSA 7 Director Ariel Florendo said Central Visayas’ latest gross regional domestic product (GRDP) was valued at P551 billion, higher than the P524.6 billion in 2016.

“While this (growth) may be disappointing to some, we should keep in mind that a 5.1-percent increase in economic output isn’t necessarily bad. Central Visayas still remains the country’s fourth largest regional economy,” said Carreon.

National Capital Region contributed P3.1 trillion to the economy, followed by Calabarzon with GRDP valued at P1.4 trillion and Central Luzon at P844 billion.

“The region still contributes 6.4 percent to the country’s total economy,” he added.

Losses in the industry sector were offset by the growth in services, which contributed the largest to the region’s economic growth, and agriculture/hunting/ forestry and fishing (AHFF) sector, which posted the highest growth last year.

Services grew by 6.3 percent from six percent in 2016. Carreon said this sector is where the main growth drivers of the economy are—tourism, information technology, and trade.

The AHFF sector, on the other hand, rebounded from -0.2 percent in 2016 to seven percent in 2017. Agriculture and forestry posted the highest growth at 9.6 percent last year, a turnaround from -1.0 percent in 2016.

Meanwhile, fishing contracted from 4.7 percent in 2016 to -8.5 percent last year.

Carreon said the region was blessed with favorable weather last year, which allowed the sector to increase productivity, on top of the massive technical and funding support extended by the government to this sector.

Looking ahead, Carreon remains upbeat with the region’s growth.