INTRODUCTION

   The 2006 Regional Development Report presents the accomplishments of the various development stakeholders in the region in relation to the objectives and targets laid out in the Medium-Term Regional Development Plan (MTRDP) 2004-2010.  Containing 17 chapters in consonance with the MTRDP chapters, the report also highlights significant developments or events that transpired during the year, whether at the national or regional level, which affected the overall performance of the different sectors in the region.

   The first part of the introduction provides a quick view of the regional development framework on which the MTRDP 2004-2010 was anchored, and which forms the basis of all regional development efforts.  The second part presents the macroeconomic performance of the region in relation to the MTRDP targets.

   Regional Development Framework

The development of the Bicol Region is anchored on the following framework:

Figure A. Bicol Regional Development Framework 2004-2010

  

   The goal for the medium term is poverty reduction---graduating a significant number of poor families from the state of being poor to nonpoor.  This could be done through the twin strategies of economic growth and job creation, and integrated delivery of basic social services.

 

   Essential to economic growth and social development are support facilities that provide physical access to markets, services and information, e.g., infrastructure/logistics support and knowledge networks. 

 

   In order to rationalize the utilization of physical resources, spatial planning will be improved at all levels, i.e., regional, provincial, city and municipal.  Internal security likewise needs to be ensured to establish a peaceful environment for living and for investments.

 

   Fiscal reforms, focused on increasing revenues, will enable local government units to be less dependent on internal revenue allotment, thus enlarging the amount available from the national government. 

 

   All these shall be anchored on good governance, which involves the participation of the government, business sector and civil society.   Government agencies and local government units shall be characterized by transparency and accountability, thereby paving the way towards elimination of graft and corruption. 

Macroeconomic Performance

   The following discussion, which is summarized in Table A, presents the macroeconomic performance of the region for 2006 in relation to the previous year and to the MTRDP 2004-2010 targets.  Indicators on population, poverty situation, economic growth, employment, and price levels are used.

   Table A summarizes the region's macroeconomic performance for 2004 and 2005 in relations to the MTRDP targets.

Table A. Macroeconomic Performance vs. Targets, Bicol Region 2005-2006

Population

 

   Although estimates for crude birth and total fertility rates in the region decreased in 2006 from the previous years' levels, population in the region is projected to grow by 1.93 percent in 2005.  This is higher than the MTRDP target of 1.5 percent, and is even higher than the actual 2000 population growth rate of 1.68 percent.  With the 2000 growth rate, population in the region is expected to double in 41 years, which is considered as very rapid growth.  

 

   In order to meet the target of reducing population growth rate, an effective population management program and family planning services should be expanded, particularly in the rural areas where about 72 percent of the regional population resides. 

 

Poverty Situation

  

   The percentage of poor individuals in the region decreased from 52.6 percent in 2000 to 48.5 percent in 2003, but is a long way from the 26-27 percent target by 2010.  The spate of strong typhoons that hit the region in the later part of 2006 is expected to aggravate the poverty situation.  The implementation of rehabilitation programs and projects should, therefore, be continued for the rest of the plan period.

 

   In terms of poverty incidence of families and individuals, Bicol is the fourth poorest region in the country.  In terms of magnitude, however, Bicol has the second most number of poor families and individuals next to Region VI (Western Visayas).

 

    In 2003, a total of 383,625 families (40.6 percent) or 2,332,719 individuals (48.5 percent) in the region live below poverty line.  About half of these numbers --- 192,390 families (20.3 percent) or 1,278,526 individuals (26.6 percent) go hungry and are living below subsistence level. 

 

   A Bicolano needs at least P14,908 a year so as not to be considered poor, based on the 2007 preliminary poverty threshold estimates for the region (Table B).  With this threshold, a family of five in the Bicol Region needs at least P74,540 a year or P6,211.67 a month or P207.06 a day in order to live above poverty line.

 

   Satisfying life’s basic necessities in urban areas is higher by an average of 29.7 percent.  In urban areas, a family of five needs a daily income of P250.  In rural areas, the same family needs at least P192 a day.  Therefore, a sole breadwinner of a family of five earning a daily minimum wage between P168-P220 (per Wage Order No. RB 05-11 issued on July 17, 2006) will find it difficult to stay above poverty line.

 

   These poverty thresholds should be taken into consideration during the succeeding round of regional wage deliberations.

   Source: NSCB

Economic Growth

   The total value of goods and services produced by the regional economy reached P147.8 billion in 2006 prices or P35.4 billion in 1985 constant prices (Figure B).  The MTRDP target in Gross Regional Domestic Product (GRDP) growth of 5-7 percent was attained from 2003 to 2005.  In 2006, however, GRDP growth slumped to 2.6 percent, the third lowest growth in the country, next to Region 4-B (2.3 percent) and Region 9 (2.1 percent). 

 

Figure B GRDP Levels and Growth Rate,
Bicol Region 2003-2006

 (In billion pesos)                                                                                       Growth Rate (%)

 

   Growth in the agriculture and fishery sector, which contributed 33.4 percent to GRDP, slumped to 0.7 percent in 2006 from a robust 8.1 percent in 2005 (Table C).  This was on account of the successive typhoons in 2006, whose negative effects on agricultural output may still be manifested in 2007.

   The industry sector buoyed up the GRDP with a 4.6 percent growth, mainly from mining and quarrying which grew a phenomenal 38.3 percent.  The lifting of the suspension order against the Lafayette mining operations in Rapu-rapu, Albay is widely seen as a step towards the recovery of this particular subsector.  Manufacturing output decelerated to 2.2 percent from the previous year's 3.1 percent growth.  Construction recovered from a negative growth in 2005 and managed to grow by 3.6 percent in 2006, in view of rehabilitation works in residential and commercial spaces, as well as infrastructure facilities.  On the other hand, electricity/gas/water recorded a negative growth of 9.3 percent, as the region's generating plants were rendered inoperable in the aftermath of the strong typhoons.

 

   Growth in the services sector, which contributed 43.8 percent to GRDP, decelerated to 3.1 percent in 2006 from 3.5 percent the previous year.  The slowdown was attributed to a lower growth in wholesale and retail trade output, which contributed 12.1 percent to GRDP.  Likewise, the ownership of dwellings and real estate subsector, which contributed 8.3 percent to GRDP, posted a negative growth of 1.6 percent.  The other subsectors exhibited accelerated growths, led by finance with a 15.1 percent growth and transport/communication/storage with a 5.8 percent growth.  Government services also grew by 4.9 percent as the country's fiscal situation improved in 2006, thereby allowing the government to deliver more goods and services to the people.

 

Table C. GRDP Growth Rates and Contribution to GRDP
by Industrial Origin Bicol Region, 2005-2006
(In Percent, At Constant Prices)

                   Source: NSO V   

 

   The decrease in the labor force population, despite the increasing working-age population, resulted to a lower labor force participation rate (LFPR) of 65.6 percent in 2006 compared to the previous year's level of 67.7 percent. Because of the decreased labor force population in 2006, the decrease in the number of employed persons by an average of 30,000 resulted to an employment rate of 94.4 percent that is only slightly higher than the previous year's 94.1 percent (Figure D). 

Figure D. Labor and Employment Indicators (in %)
Bicol Region, 2005 and 2006
 

                                Source: NSO V   

   By type of industry, the agriculture and services sectors remain to be the major employers in the region, accounting for 46 percent and 42 percent, respectively, of the total number of employed persons in 2005 and 2006.  The industry sector absorbed 12 percent of the total employed persons. 

 

   For every 100 employed persons in 2006, 41 were earning wages and salaries, 43 were self-employed, and 16 were unpaid family workers.  A year ago, the breakdown was 39, 43, and 18, indicating an increase in wage earners and a corresponding decrease in unpaid family workers.

 

   Another concern however is the rice in underemployment rate from 34.9 percent in 2005 to 38.1 percent in 2006, suggesting the need for a deliberate action to create additional and more gainful employment opportunities for the region's labor force.

 

Price Situation

 

   In 2006, prices of goods and commodities increased at a slower pace than the previous year, as indicated by a lower increase in the Consumer Price Index (CPI) of 4.4 index points from 133.2 in January to 137.6 in December, compared to the 7 index point-increase recorded the previous year  (Table D).

 

   Among commodity items, the Fuel, Light, and Water (FLW) item registered the highest increase in CPI of 8.6 index points from 160.9 in January to 169.5 in December.  This was followed by the Services item with a 4.9 increase in CPI from 154.9 in January to 159.8 in December.  These two items were affected the most by volatile world crude oil prices that pervaded during the year.  Except for the immediate effects of the successive strong typhoons towards the end of the year, there was adequate and continuous supply of basic commodities in the region.   

Table D. Consumer Price Index (CPI) by Item, Bicol Region,
January to December 2006

   Among the provinces, Camarines Sur, Masbate, and Sorsogon exhibited a relatively lower cost of living in 2006, as manifested by lower CPIs and inflation rates and higher Purchasing Power of the Peso or PPP (Table E). 

Table E. Average Consumer Price Index (CPI) by Item, Average Inflation Rate
and Average PPP, by Province, 2006

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