THE Xavier University (XU)-Department of Economics is recommending the investment in information and communications technology (ICT) and internet infrastructure as the long-term solution to mitigate effects brought about by the Covid-19 pandemic in Northern Mindanao's economy.
According to the data provided by XU-Department of Economics incoming chairperson Jhon Louie Sabal, the pandemic shows the reality that firms with technology-assisted consumer support have the edge to survive an economic hibernation.
They also suggested short-term and immediate-term solutions: higher government spending to compensate for the loss of economic activities among the private sector, and more support on agriculture to solve the depleting supplies of consumer goods, respectively.
More than 180,000 workers in various sectors in Northern Mindanao were affected for around nine weeks of economic hibernation due to the pandemic, the XU-Department of Economics reported.
A total of 10,433 companies in the region were also affected in the same period.
In XU-Department of Economics' report based on the data from the Department of Labor and Employment-Covid-19 Adjustment Measures Program (Camp), there are a total of 182,412 affected workers in the service, industry, and agriculture sectors.
The service sector recorded a total of 147,344 affected workers, mostly from accommodation, leisure, education (82,261) and wholesale and retail (27,739).
There are 30,889 affected workers in the industry sector, most of them from construction (19,445) and manufacturing (11,159); and 4,179 workers in the agriculture sector.
Most of the affected workers are from Cagayan de Oro City (97,890), Lanao del Norte (22,590), and Misamis Oriental (18,704).
According to the DOLE-Camp's data, the daily income loss for all 182,412 affected workers, using the daily minimum wage amounting P365, reached P66,580,380.
With this, affected workers must receive at around P7,719.75 covering the nine-week lockdown, the XU-Department of Economics said.
The government, it added, needs around P1.4 billion to pay the affected workers just enough to compensate for their food expenditure. Food expenditure in Mindanao is at 47 percent.
In Northern Mindanao, industry is the fastest growing sector from 2009 to 2018 at 8.1 percent. Services is a close second at 7.3 percent and agriculture at 2.6 percent.
The service sector also constitutes the 42.3 percent of the regional economy of Northern Mindanao, with industry contributing 33.8 percent and agriculture at 23.9 percent.
According to XU's study, Northern Mindanao's economic growth will be positive but at a slower pace than 10.6 percent expected growth projection by the National Economic and Development Authority (Neda) in 2020.
However if lockdown continues until end of May, the region's 2020 growth will be slower by 3.3 percent.
If lockdown continues until the second quarter of this year, 2020 growth will be slower by 4.6 percent, and 8.4 percent slower if lockdown continues until the third quarter.
Meanwhile, if lockdown continues at the end of 2020, growth will be slower by 12.3 percent.
"This is on a do nothing scenario. Meaning the assumption is with no government intervention. The numbers could be higher or lower depending on the effectiveness of government initiatives to stimulate the economy," Sabal said.