DAVAO Region's economy grew by 5.9 percent in 2021 from -7.5 percent in 2020, the Philippine Statistics Authority-Davao Region (PSA-Davao) said.
"At constant 2018 prices, the region's economy was valued at P882.0 billion in 2021 from about P833.2 billion from 2020, an estimated increase of P48.8 billion. However, the level is still short of P18.5 billion compared to the 2019 level," PSA-Davao regional director Ruben D. Abaro, Jr. said during the News Conference on the 2021 Economic Performance of Davao Region at the Acacia Hotel Davao on Thursday, April 28, 2022.
The economic performance of the region was measured by the Gross Regional Domestic Product (GRDP) and Gross Regional Domestic Expenditure (GRDE).
Davao Region's growth rate is higher than the national average of 5.7 percent.
"[The growth was] Driven mainly by an increase in economic activity, work output, and improved mobility coupled with a proactive management of risks against Covid-19," National Economic and Development Authority-Davao Region (Neda-Davao) director Ma. Lourdes Lim said.
Lim said Davao Region contributed 4.8 percent to the national economy.
Meanwhile, Abaro reported that Davao Region was the fourth fastest-growing economy in Mindanao in 2021. The fastest-growing economies in the island group were Bangsamoro Autonomous Region of Muslim Mindanao (7.5 percent), Caraga (7.2 percent), and Northern Mindanao (6.3 percent). Behind Davao were Zamboanga Peninsula (5.7 percent) and Soccsksargen (5.2 percent). Overall, Mindanao posted an economic growth of 6.1 percent from -5.7 percent.
"The safe reopening of the regional economy in 2021, also allowed more Dabawenyos to work and earn income translating to quarterly employment rates of about 94 percent and conversely unemployment rates at only 4 or 5 percent throughout 2021," Lim said.
Meanwhile, Lim said the services and industry sectors were the top sectors in 2021 while agriculture, forestry and fishing "underperformed."
Industry
Data from PSA showed that the industry sector had the highest growth among the three major sectors -- industry, services, and agriculture, forestry and fishing. The industry sector posted a 9.9-percent growth in 2021 from -14.5 percent in 2020. The sector also accounted for 25.2 percent of the regional economy.
The sector is composed of mining and quarrying; manufacturing; electricity, steam, water, and waste management; and construction.
"The notable performance of the industry sector was propped up by the notable expansion of the mining and quarrying at 21.9 percent owing to a higher generation of local sales of minerals, a much higher volume of minerals extracted, a higher export of gold and minerals," Lim said.
Mining and quarrying contracted by -15.8 percent in 2020. In 2021, this sector has become the fastest-growing subsector for both the industry sector and the 16 subsectors in Davao Region.
"These increased output levels are basically on account of the reopening of the mining and quarrying activities in the region in 2021, most of which reduced or closed in 2020," Lim said.
Construction, which was among the hardest hit subsectors at the height of the Covid-19 pandemic in 2020, also posted a huge growth at 12.5 percent in 2021 from -23.4 percent in 2020.
"The positive performance in 2021 can be traced to the accelerated infrastructure spending of the national government in Davao Region, including Build, Build, Build projects, given that 2021 is the last full year of the Duterte administration," Lim said.
Manufacturing grew by 8.9 percent in 2021 from -9.3 percent in 2020 while electricity, steam, water, and waste management grew by 2.6 percent from 1.7 percent.
Services
Meanwhile, the services sector grew by 5.6 percent in 2021 from -6.7 percent in 2020. The sector also continued to form the largest portion of the pie of the regional economy at 58.7 percent.
The sector covers wholesale and retail trade, repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities; information and communication; financial and insurance activities; real estate and ownership of dwellings; professional and business services; public administration and defense, compulsory social activities; education; human health and social work activities; and other services.
Human health and social work activities are the fastest growing services subsector in 2021. It has grown to 14.6 percent from -5.4 percent in 2020. It is also the second fastest-growing among the 16 subsectors.
"The robust expansion of human health and social work services is understandable on account of the massive health spending from both the private and public institutions. This is in view of the pandemic response and recovery efforts and the intensive rollout of the vaccination program in Davao Region," Lim said.
The accommodation and food service activities, meanwhile, saw a growth rate of 10.8 percent in 2021 from -34.8 percent in 2020. Following the lockdowns and travel restrictions in 2020, the sector was among those that were adversely affected by the Covid-19 pandemic.
"In 2021, many of these restrictions were lifted followed by the safe reopening of hotels, restaurants, tourist destinations, and other recreational activities leading to a high performance of this subsector," Lim said.
As for the other subsectors, wholesale and retail trade, repair of motor vehicles and motorcycles grew by 4.3 percent from 0.3 percent; transportation and storage expanded to 2.2 percent from -33.9 percent; information and communication increased by 8.6 percent from 3.9 percent; real estate and ownership of dwellings grew by -15.6 percent to 2.3 percent; professional and business services rose by 8.1 percent from -11.4 percent; education grew by 8.3 percent from -5 percent; other services increased by 1.4 percent from -38.1 percent.
Public administration and defense, compulsory social activities; and financial and insurance activities recorded slower growth in 2021. Public administration and defense, and compulsory social activities posted a growth rate of 5.2 percent in 2021 from 6.4 percent in 2020. Financial and insurance activities recorded a 6.1 growth in 2021 from 7.9 percent in 2020.
Agriculture
The agricultural sector, meanwhile, recorded a slower growth of 0.8 percent in 2021 from 1.2 percent in 2020.
"This suggests that the value of overall agricultural production in 2021, only marginally increased," Lim said.
While there were slight improvements in palay and corn production in 2021, this was offset by the lower production of pork and poultry.
"The decline is attributed to supply chain disruptions, the lingering impact of the African Swine Fever, the fewer institutional buyers due to consumer health concerns, and unfavorable climatic conditions," Lim said.
Despite the slow growth of agriculture, they saw some optimism in the fisheries sector.
"The bright spot... was the fisheries production. This registered higher production volumes due to localized landing of fishing vessels, intensification of fisheries livelihood programs, and operationalization of aquaculture farms," Lim said.
Additional data on agricultural production were not presented during the News Conference.
Demand side
Abaro reported that gross capital formation or investment spending grew by 13.1 percent in 2021 from -15.6 percent in 2020. It recorded the highest growth in 2021 on the demand side.
Neda-Davao reported that investments were poured into public and private constructions, durable equipment, intellectual property products, and valuables.
Gross capital formation was followed by imports of goods and services (8.2 percent from -18.6 percent); government final consumption expenditure (5.9 percent from 11.8 percent); and Household final consumption expenditure or household spending (4.7 percent from -7.5 percent).
Exports of goods and services also saw an improvement but had the slowest growth rate at -2.7 percent from -26.3 percent.
Meanwhile, despite having slower growth, household spending remains to have the biggest share of the regional economy at 65 percent, valued at around P573 billion.
"This growth rate (of Household spending) translates to about P26 billion increase in private consumption expenditure in Davao Region or an average P17 million spent a day," Lim said.
Lim said the increase in household spending was due to the lifting of mobility restrictions, encouraging travel, resumption of operations of most businesses and workplaces, and the return of limited face-to-face schooling, among others.
"2021 tested our grit as a region and as Dabawenyos, it is clear, as the data indicate, that we have weathered the worst part of the storm," Lim said.
She noted how the region not only grew positively in 2021 but also maintained its lead as the biggest regional economy in Mindanao.
"The region is also nearing 2019 or pre-pandemic economic output, clearly indicating that Davao Region is on track to a full economic recovery and is primed to regain its growth momentum this year," Lim said.