Optimistic growth for Davao Region

Photo by Mark Perandos/SunStar file
Photo by Mark Perandos/SunStar file

THE regional economy of Davao is expected to grow in 2022 after slowly recovering from the effects brought about by the Covid-19 pandemic.

“We expect a positive outlook for Davao region’s economy in 2022, which we believe the region’s economic growth shall be at par or even surpass the economic performance of the country,” National Economic and Development Authority-Davao (Neda-Davao) Regional Director Ma. Lourdes Lim said during Philippine Information Agency-Davao’s (PIA-Davao) One Davao virtual presser on February 7.

Lim said prior to the Covid-19 pandemic Davao Region’s growth surpassed the country’s gross domestic product (GDP) from 2016 to 2019.

The gross regional domestic product (GRDP) of the region in 2016 accelerated to 9.2 percent from eight percent in 2015. It surpassed the 7.1 percent growth of the Philippines.

In 2017, the region’s GRDP dipped to 8.8 percent but remains higher than the 6.9 percent GDP of the Philippines. In 2018 and 2019, the GRDP of Davao was at 7.2 percent and 7.1 percent, respectively, which is still higher than the country’s 6.3 percent and 6.1 percent GDP in the same period.

During this time, Davao Region had one of the top-performing regional economies in the country -- placing second in 2016, fourth in 2017, and third in both years of 2018 and 2019.

However, in 2020, Davao Region’s economic growth took a dive due to the effects of the Covid-19 pandemic. From 7.1 percent in 2019, the region’s GDP contracted by -7.6 percent. However, it was still higher than the GDP of the Philippines that year, which was at -9.6 percent.

While the region took a dip in 2020, the reopening of businesses in 2021 and mass vaccination against Covid-19 has allowed the region to slowly recover.

Inflation

Davao Region saw an annual inflation rate of 4.6 percent driven mostly by higher prices in transport, food and non-alcoholic beverages, and alcoholic beverages and tobacco.

According to Neda-Davao, transport prices accelerated to 7.6 percent, followed by alcoholic beverages and tobacco prices at 7.2 percent, and food and non-alcoholic beverages at 5.6 percent.

At the same time, all major 11 commodities saw an acceleration of prices. Among these were housing, water, electricity, gas, and other fuel commodity groups quickened to four percent.

Other commodity groups such as health; restaurant and miscellaneous goods and services; clothing and footwear; and furnishing, household equipment and routine maintenance of the house accelerated as well.

“(This was due) to higher demand and improved confidence in consumer spending, as more people got vaccinated and more business activities operated in the new normal conditions,” Lim said.

Employment

The region was able to sustain high employment from the first to third quarters of 2021.

The employment rate was between 94.6 to 95 percent in 2021, which is almost at par with the pre-pandemic rate during the first quarter of 2020 at 95.4 percent.

“(This is) due to the reopening and sustained business operations as the spread of Covid-19 was contained,” Lim said.

The regional director said that more quality jobs were generated in 2021 thanks to the relaxed restriction in people's mobility.

Due to this, the underemployment rate in the third quarter of 2021 shot to 17.8 percent from 9.0 percent and 10.8 percent in the second and third quarters respectively.

On the other hand, the unemployment rate in the region lessened to between 5.4 and 4.9 percent in the first to third quarters of 2021 from reaching a high of 17.9 percent during the height of the Covid-19 lockdown.

Additionally, 11,871 retrenched workers in 2021 throughout 586 affected establishments due to the reduced workforce and the closing of some establishments.

The majority of these retrenched workers were from the industries of agriculture, forestry, fishing, administrative and support services, and other service activities.

Agriculture

The agriculture sector showed an increased production of palay and corn in the third quarter of 2021 which produced 357,937 metric tons (MT) of palay, 133,546 MT of white corn, and 51,494 MT of yellow corn.

The production of palay increased by 3.03 percent or an additional 10,532 MT compared to the 347,404 MT produced in 2020, while white corn also increased by 3.36 percent of 4,347 MT from 129,199 MT in 2020.

Yellow corn had a slight decrease in production by 0.86 percent or 446 MT in 2021 compared to the 51,940 MT produced the year before.

In the livestock and poultry industry, all productions declined except for goat production which increased by 26.05 percent or 3,873 MT.

As of the third quarter of 2021, cattle production decreased by 5.54 percent to 7,768 MT from 8,223 MT in the same period in 2020. Hog production was at 97,740 MT, which decreased by 12 percent from 111,055 MT in 2020.

Poultry production also decreased by 7.07 percent to 50,900 MT from 54,772 MT in 2020, while chicken egg production dropped by 2.44 percent to 22,875 MT from 22,936 mt in 2020.

Meanwhile, the production levels of fisheries increased by 21.75 percent to 1,579 MT for commercial production, while aquaculture production increased by 7.12 percent to 21,525 MT.

The municipal fisheries production, on the other hand, decreased by 2.02 percent to 12,302 MT.

“The improved production levels in commercial fisheries production were due to more localized landing of fishing vessels while aquaculture was due to the intensification of fisheries livelihood intervention and e-operationalization of aquaculture farms amid pandemic,” Lim said.

Meanwhile, Tilapia and Bangus production increased by 33 percent and 19 percent, respectively, as of the third quarter of 2021 to 1,939 MT to 14,593 MT.

Seaweed and white shrimp, on the other, hand decreased by 85 percent and 57 percent. During the same period, production of seaweed dropped to 456 MT in 2021 from 3,129 MT in 2020, while white shrimp also declined to 3.13 MT from 7.25 MT.

Infrastructure

There are a total of 431 infrastructure projects completed in the region from the first to third quarter of 2021, accounting for P19.445 billion total contract amount, based on the report of the Regional Project Monitoring Committee (RPMC)-Davao.

Davao del Norte province completed the most number of completed projects with 123 projects, followed by Davao de Oro with 118 completed projects, Davao City with 71, Davao del Sur with 70, Davao Oriental with 30, and Davao Occidental with seven completed projects.

Included in the 431 total completed projects were seven region-wide and inter-provincial projects.

“Majority of these projects were for the construction of new roads, improvement and repair of existing roads,” said Lim.

One of the major infrastructure projects completed in 2021 was the Tagum Flyover located in Agusan-Davao Road, Tagum City which was completed on August 30, 2021 with a cost of P112,230,777.8.

Among the infrastructure projects was also the validation of the Cellular Mobile Telephone System (CMTS) Service and Broadband Access. Lim said all 49 municipalities and cities in the region were validated and have 100 percent coverage for both CMTS and Broadband services.

In the barangay levels, out 1,002 barangays in the region, 81 percent and 52 percent were validated in the CMTS and Broadband service, respectively.

Other infra and ICT projects include the launching of the Technology Empowerment for Education, Employment, Entrepreneurship, and Economic Development (Tech4ED) Center in the Municipality of Santo Tomas, Electric Business Permit and Licensing System (eBPLS) in Mati City, and Basic Digital Literacy Training in Malita, Davao Occidental.

Tourism

Meanwhile, the region saw a decrease in tourist arrivals in 2021 compared to 2020. There were a total of 1,306,732 arrivals in Davao Region from the first to third quarters of 2021, which is a -3.9 decrease from 1,360,168 arrivals in 2020.

“(The tourism industry) was greatly affected by travel restrictions and border closures to mitigate the effects of the pandemic,” Lim said.

Of the total tourist arrivals, overseas Filipinos had the biggest decline with a -84.9 percent or 1,091 arrivals in 2021 from 7,266 in 2020. This is followed by foreign travelers with -74.7 percent decline or 8,571 arrivals from 33,915 in 2020.

The domestic arrivals, on the other hand, still reached over a million arrivals with a total of 1,297,070 which is only a -1.6 decline from 1,318,987 arrivals 2020.

However, although the number of arrivals decreased, Neda-Davao regional director Lim said the value of tourist receipts increased by 37 percent to P4.068 billion from the first to third quarters of 2021.

Lim said despite a dip in tourist arrivals there is an increased confidence in visiting Davao Region destinations that could mean better tourism performance for 2022.

Lim attributes this confidence to the vaccination of at least 16,000 tourism workers and the fact that the tourism industry is more knowledgeable in handling tourism activities during the pandemic.

Tourism destinations are also being developed, along with a tourism travel circuit that will feature eco-tourism activities.

Moving forward, Lim calls on the public and private sector, especially the business sector, to unite in achieving Davao Region’s development targets for 2017-2022.

“I enjoin the government and private sector... to sustain our partnership so that we can fully recover from the lingering effects of the pandemic safely and further restore business and consumer confidence,” said Lim.

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