Region 7 growth at 7.5% to 10%-A A +A
Tuesday, December 3, 2013
THE National Economic Development Authority (Neda) 7 on Monday said the Central Visayas economy is likely to grow between 7.5 to 10 percent this year amid the recent calamities.
“We are targeting 7.5 percent to 10 percent growth of gross regional domestic product for 2013,” Neda 7 assistant director Efren Carreon told reporters in a briefing.
Carreon said growth is “attainable” given the region’s strong economic momentum in the last three years.
Central Visayas grew by 9.3 percent in 2012, 6.8 percent in 2011 and 12.9 percent in 2010.
GRDP or gross regional domestic product is the aggregate of gross value added of all resident producer units in the region.
Carreon shrugged off concerns on the impact of the recent calamities to the region’s final domestic output this year saying that the 7.2 magnitude earthquake and super typhoon Yolanda came in towards the latter part of the year.
“Many of the industries, manufacturing for instance, have already produced goods to sell for the entire year,” he said. He warned, though, that effects of the earthquake and typhoon on the economy will slowly be felt towards the first quarter of 2014.
Carreon identified agriculture and tourism as among the industries that will experience the lingering effects of the calamities. The construction industry, meanwhile, will remain upbeat as efforts of public and private sectors gear towards rehabilitation and reconstruction particularly in typhoon and earthquake stricken areas.
“We expect private and public spending to increase which will result to an increase in demand of construction materials. Employment will likewise go, up over and above, the present construction boom that is happening in Cebu,” said Carreon.
He said the optimism and confidence of the business sector amid the calamities is also a big boost to the regional economy. “(Their) confidence is an indication of a speedy recovery,” he said.
Neda 7 reported that the region’s economy “expanded at a brisk space” during the first semester of the year.
Tourism, which is one of the region’s major growth drivers, remained vibrant logging a 15 percent growth compared to the same period in 2012.
Of the 3.03 million tourist arrival target for the year, Carreon said some 1.7 million have already visited the region, which is 56.5 percent of the target.
He is optimistic the region can still hit its projection. But, unlike in manufacturing, Carreon said they will closely monitor tourism arrivals, as postponements of travels by some tourists due to the calamities might have already affected the growth in arrivals.
The information-technology-business process management (IT-BPM) industry, on the other hand, continued to post stellar growth.
For the first three quarters, Neda 7 said, the IT-BPM industry has logged $435.4 million in export revenues or around 84 percent of the $516.8 million in 2012.
Carreon expects revenues to still go up and exceed last year’s figure with the entry of three new BPM players. Qualfon also expanded operations in Dumaguete last May.
Likewise, the construction industry remained upbeat in the first half.
Carreon said around 4,891 new construction projects were approved in the first half valued at P7.83 billion. Eighty-five percent of the approved construction projects were residential buildings.
Eleven of 13 projects registered with the Bureau of Investments (BOI), on the other hand, were for mass housing with estimated project cost of P3.22 billion. Carreon said demand for condominiums will continue to rise even after the earthquake.
“The good thing was that no high-rise building collapsed during the strong earthquake, that alone sustained market confidence,” he said.
Meanwhile, the export sector, which used to be one of the region’s main economic drivers in the past “did not perform well” in the first semester.
From last year’s revenue of $2.35 billion, export revenues went down by 16 percent to $1.97 billion this year.
“Demand from the international market has not fully recovered,” said Carreon.
Total trade declined by 13.9 percent, with imports declining by 10.9 percent.
Losses were also recorded in the region’s agriculture sector, whose total output dropped by 36 percent.
But Carreon said, the sector will only have a minimal impact to the GRDP as it only accounts eight percent of the economy.
“The region, particularly Cebu, remains to be a net importer of agri-products from neighboring regions,” he said.
Employment scenario in Central Visayas is “better than other regions”, the report said.
Underemployment rate is declining from 19.4 percent in Jan. this year to 12.2 percent in July which means that quality of jobs are a lot better now, said Carreon.
Unemployment rate, on the other hand, has also gone down from 7.4 percent in Jan. this year to 6.5 percent in July.
Meanwhile, the average inflation rate of Central Visayas rose slightly to 4.8 percent from 4.7 percent in 2012, but is well within the three to five percent range by the Central Bank.
Cebu posted the highest inflation rate at 5.9 percent followed by Bohol (4.8 percent), Siquijor (3.4 percent) and Negros Oriental (2.4 percent).
Carreon expects the region’s inflation rate to increase following the recent calamities.
Published in the Sun.Star Cebu newspaper on December 04, 2013.