CEBU, Philippines - The Central Visayas economy rose 8.8% in 2014 mainly buoyed by industry and services but the growth of the agriculture sector contracted during the year, the government reported yesterday.
The National Economic and Development Authority (NEDA) missed its low-end target of 8.9% for 2014 but last year’s gross regional domestic product (GRDP) growth was higher compared to 7.4% recorded in 2013.
Efren Carreon, NEDA regional director, said they had expected the agriculture sector’s slower growth last year.
“This slowdown is understandable in the aftermath of the Bohol earthquake and typhoon Yolanda that happened in the last quarter of 2013,” Carreon told a news conference yesterday in Cebu City.
Ariel Florendo, regional head of the Philippine Statistics Authority (PSA), reported the agriculture, hunting, forestry and fishing (AHFF) sector contracted to -2.6% last year from 0.3% growth in 2013.
“Agriculture and forestry contracted from 0.9% in 2013 to -0.2% in 2014 due to the decline in production of palay, corn, coconut and chicken eggs. Likewise, fishing further declined from -2.9% to -14.8%,” the PSA said in a report.
However, industry and services posted positive growth.
Industry – which includes mining and quarrying, manufacturing, construction, electricity, gas and water supply – grew by 13.9% last year, up from 9.5% in 2013. Industry was mainly boosted by construction which posted the highest growth at 24.7% in 2014 from 2.2% a year ago.
Services grew last year by 6.6%, slightly down from 6.9% in 2013. Services include transport, storage, communication, trade and repair of cars and household goods, financial services, real estate, renting, business activities, public administration and defense and social security, among others.
Central Visayas’ GRDP reached P464.7 billion, 54.6% of which was contributed by services sector, 39.4% by the industry and 6% by AHFF.
The industry, however, had the biggest share to the 8.8% growth of CV, contributing 5.2 percentage points (pp) followed by services with 3.7 pp. AHFF pulled down the regional growth by 0.2 pp.
Furthermore, the region's GRDP per capita which rose to P63,351, short of the low-end target of P63,823, was also the fourth highest in the country, next to National Capital Region (NCR), Calabarzon and Cordillera Administrative Region.
GRDP per capita is the value of goods produced per person in the region.
Contribution to national output
Officials said Central Visayas ranked third among the country’s 17 regions in terms of GRDP growth last year after Central Luzon (9%) and Davao Region (9.4%).
CV was also the fourth biggest contributor to the national economic output at 6.5 % after NCR (36.3%), Calabarzon (17.2%) and Central Luzon (9.3%). CV contributed 0.6% to the national gross domestic product (GDP) last year, still ranking fourth.
Last year the Philippine economy grew 6.1%, short of the government's target of 6.5-7.5%. This year the government expects the country's economy to grow by 7-8%.
Growth drivers
“As the Central Visayas economy is driven by the industry and services sectors, we had expected faster growth for both sectors,” Carreon said, citing in particular the robust construction sector.
“The continued growth of the construction industry can be attributed to the strong and sustained positive economic performance of Central Visayas,” the NEDA official said.
Carreon expressed optimism the regional economy will grow at a faster rate this year.
He pointed out the agriculture sector showed signs of recovery at 9.9% growth in the first quarter this year after a dismal growth in previous quarters. He hoped the recovery would continue through the rest of the year.
“To sustain the positive growth, strategies to improve agricultural productivity will be implemented,” he said.
But the economic planner also claimed the ongoing El Niño phenomenon still poses threat to farm growth. “Climate is always a risk factor for the agri sector,” he said.
Carreon further said tourism, retail trade and IT-BPM (information technology-business process management) sectors remain the region’s main economic drivers.
CV’s tourism sector is getting a boost this year from Cebu’s hosting of some Apec (Asia Pacific Economic Cooperation) meetings and the “2015: Visit Philippines Year” by the Department of Tourism.
Retail trade’s expansion, Carreon noted, will be buoyed by the growth of tourism and IT-BPM sectors. “New malls are expected to open in the latter part of 2015,” he added.
“Business and consumer confidence in the economy is still very high and support our optimism in hitting our growth targets for 2015,” Carreon explained.
NEDA is targeting a GRDP growth rate of between 9.7-11.9% for CV this year and between 10.1-12.5% in 2016.
CV’s economic performance since 2010 until present remains the highest five-year growth average which is 9%.
GRDP is the total income coming from the three main sectors – services, industry and agriculture – of the regional economy. (FREEMAN)