BSP urges gov’t to address infra, power problems

MANILA, Philippines - Problems in infrastructure and high power rates should be addressed by the government if it wants economic growth to be felt across the country, the Bangko Sentral ng Pilipinas (BSP) said in a report.

“The government’s various infrastructure improvement and development programs across the country are expected to invigorate economic activities and revitalize business in the regions,” the central bank said.

“A major challenge that could hamper regional development is the lack of adequate supply of electricity that threatens various economic activities,” it  said.

The country should also be prepared for weather disturbances, which could hit agriculture-led regions that rely heavily on crops for livelihood, the report also noted.

The economy grew 6.8 percent last year, one of the fastest in Asia, driven mainly by domestic demand and low interest environment. The latest growth figure was up from 3.9 percent in 2011.

According to the report, agriculture, industry and services all posted growth rates last year, with different regions leading per each sector.

Region III covering Central Luzon had the biggest agriculture sector, followed by Regions IV-A (Calabarzon) and VI (Western Visayas).

The industry sector, meanwhile, was led by the Calabarzon region, which cornered more than a third of the segment. It was followed by the National Capital Region (NCR) and Central Luzon.

For the services sector, the NCR accounted for more than half, at 51.8 percent, of the total service activity nationwide, BSP said.

According to the central bank, growth rate in palay production accelerated last year, which offset a slowdown in corn production across the regions. Central Luzon continued to lead in the two segments.

Fisheries, on the other hand, was a major setback, with the sector contracting 2.3 percent last year led by a slump in activities in Cagayan Valley Autonomous Region in Muslim Mindanao (ARMM), Region IV-B and Region VIII or Eastern Visayas.

Construction activity, meanwhile, remained resilient due to a hike in government spending. Top regions on this segment were Region IV-A, NCR and Northern Mindanao.

“The weak performance of some regions in Mindanao was attributed to the inadequate power supply leading to prolonged brownouts,” the BSP said.