CHALLENGED by the ongoing major global economic external shocks especially in the export of agricultural products, the Mindanao Development Authority (Minda) is projecting lower Gross Regional Domestic Product (GRDP) for 2015 for Mindanao at 6 to 7 percent as compared to 2014's 7.4 percent.
Romeo Montenegro, Minda director for investment promotions and public affairs, speaking on Monday’s Kapehan Sa Dabaw at the SM City Annex, said the projection has taken into account the domestic and external economic performance disruptions.
“We originally projected 7 to 8 percent of GRDP for 2015 but with the third and last quarter of last year’s performance, we revised it to between 6 to 7 percent because we had a number of challenges also in the 2015, particularly the external shocks, the slowing down of consumption to our export commodities by our major export markets like China, Japan and the other major and traditional export market destination for Mindanao products particularly our banana," he said.
“We really have to look at the third and fourth quarters at how Mindanao has performed,” Montenegro added.
He underscored that the slowing down of major export markets will directly affect Mindanao because “major sector growth for the island is the export of agricultural product particularly banana.” Problems in markets will affect the production of champion commodities.
Aside from bananas, rubber for the year 2015 performed slowly as affected by the global price of oil.
“Rubber is also in its all-time low for the last two years, it is affected by the price of oil, if the world market for crude oil goes down there is less demand for natural rubber which is 100 percent produced in Mindanao as far as national output is concerned,” Montenegro said adding that the changing pattern is caused by the global economic performance.
Apart from the less consumption to exported products of the country by the export markets, Mindanao’s economic performance is also affected by the onslaught of El Nino phenomenon damaging crops and threatening production and adversely affecting power situation as Mindanao is presently sourcing bulk of supply from hydro-electric power plants which are vulnerable to dry spell.
He noted that major growth contributor in Mindanao is still the sectors of agriculture, industry, service and the emerging construction sector.
For 2016, the national election this May is seen to be a major economic disruption.
“Many of the major economists and financial institutions are also calibrating forecast for 2016 especially on account on the major disruption that is expected that 2016 elections this May.
This disruption has positive and negative impacts, positive because spending and purchasing capacity of people and government will increase, negative because many of the investors will hesitate and apply the “wait and see” attitude,” Montenegro said.
Meanwhile, Mindanao’s budget for this year is pegged at P380.9 billion, some 22.2 percent of the around P3 Trillion national budget.
Of the figure, P78.83 Billion will be poured down to Northern Mindanao, highest for the island, followed by Davao Region (P67.6B), Zamboanga Peninsula (P66.61B), Soccsksargen (P63.2B), Autonomous Region of Muslim Mindanao (P53.47B) and Caraga Region (P51.74B).