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CHAPTER 1  TRADE AND INVESTMENT

  

Trade

 

   Export sales through the Department of Trade and Industry (DTI)-monitored projects totaled to $45.73 million in 2006, a drop by 54 percent from previous year’s $53.49 million.  Compared to the MTRDP targets in 2005 and 2006, exports fell short by 6 percent and 27%, respectively (Table 1.1). 

 

   This shortfall could be attributed to several problems facing the export sector, among which are a) dwindling supply of agri-based raw materials due to calamities and plant diseases; b) high production cost brought about by high cost of transportation, power and labor, c) poor condition of major highways that affects the quality of products transported to Metro Manila and abroad; and d) cumbersome regulatory system and business procedures.

 

   Albay Province maintained its lead in export generation but recorded the highest decline in sales from 2005 by 54 percent. Export sales of all other provinces weakened in 2006 as shown in Table 1. 

 

Table 1 Exports Performance by Province: Bicol Region
 CY 2005 vs CY 2006 vs Plan Targets

Province Actual
Accomplishments		 Plan
Targets		 Actual vs
Targets (%)
2005 2006 Total %
Change		 2005 2006 Total 2005 2006
Total 53.49 45.73 99.22

     (54.27)

 56.72 62.39 119.1     94.31       73.30
Albay 45.32 40.13 85.45      (59.87) 48.4 53.24 101.6     93.63       75.37
Camarines Norte 0.46 0.14 0.60      (99.86) 1.43 1.57 3     32.10         8.68
Camarines Sur 1.09 0.72 1.81      (99.28) 1.1 1.21 2.31     99.18       59.67
Catanduanes 0.34 0.38 0.72      (99.62) 0.29 0.32 0.61   117.24     117.81
Masbate 4.06 1.94 6.00      (98.06) 3.3 3.63 6.93   123.09       53.44
Sorsogon 2.22 2.43 4.65      (97.57) 2.2 2.42 4.62   101.05     100.29

                 Source:  DTI V and MTRDP 2004-2010

   The top five countries of export destinations in 2006  were: USA, Japan, Italy, Spain and New Zealand for Home Furnishings; Germany, USA, Japan, France and Italy for Giftware and Holiday décors; USA, Italy, Japan, Australia and United Kingdom for Wearables; Taiwan and USA for Organic and Natural Products, and Japan, Taiwan and USA for Marine Products.

 Investments        

 

   Despite the calamities that hit the region during the later part of year, total investments generated by the region increased by 10 percent from P3,994 million to P4,408 million.  This increase in investment was realized through the effective networking of the DTI with other agencies and private sector in investment promotions. The calamities also led to investments infusion in the region to rehabilitate infrastructure facilities and business establishments damaged by the typhoons. 

 

   Among the provinces, Albay led in investment generation with 36 percent share and grew by 30 percent.  It was closely followed by Camarines Sur with 30 percent share and with 12 percent growth from the previous year.  Masbate and Camarines Norte contributed about 11 percent each while Sorsogon and Catanduanes with 8 percent and 3 percent, respectively (Table 2).

Table 2 Investment Performance by Province
Bicol Region : CY 2005 vs CY 2006, (P million)
Province 2005 2006 % Share
(2006)		 %
Change
Total 3,994.26 4,407.91 100.00 10.36
Albay 1,201.62 1,566.54 35.54 30.37
Camarines Norte 482.46 489.97 11.12 1.56
Camarines Sur 1,196.73 1,338.14 30.36 11.82
Catanduanes 120.21 137.63 3.12 14.49
Masbate 545.65 512.71 11.63 (6.04)
Sorsogon 447.60 362.93 8.23 (18.92)

                                   Source:  DTI V

   Services sector was again the generator of investments in 2006 contributing 66 percent to total but it was down by 9 percent from the previous year.  Wholesale and Retail Trade shared 35 percent, Finance, Insurance, Real Estate & Business Services with 31 percent, Community, Social and Personal Services with 24 percent, while Transportation, Storage and Communication contributed a measly 6 percent.  Except for Finance, Insurance, Real Estate & Business Services, all other sectors under Services recorded negative growth.

 

   Industry generated about 32 percent investments and remained the strongest sector as it grew by 102 percent. The biggest contributor to Industry’s growth was Manufacturing with 81 percent share and recorded a remarkable growth of 176 percent.  Electricity, Gas and Water also grew by 29 percent but contributed only about 2 percent. Mining and Quarrying had its share of 6 percent and increased by about 1.5 percent. Construction, on the other hand was down by 16 percent but was able to contribute 10 percent investment to the Industry’s total. 

 

   Agriculture, Fishery and Forestry contributed only about 2 percent in investment and was down by 40 percent from the previous year following the devastation of the typhoons in 2006 to the major agricultural products.

Table 3 Investment Performance by Sector: Bicol Region
CY 2005 vs CY 2006 (P million)

Industry Group

 2005 2006 % Share
(2006)		 %
Change
Total 3,994.26 4,350.35 200.00 8.92
Agriculture, Fishery 159.58 94.83 2.18 (40.58)
Industry 686.46 1,386.57 31.87 101.99
Mining and Quarrying         83.99         85.24        6.15       1.48
Manufacturing       407.68    1,126.67      81.26   176.36
Electricity, Gas and Water         25.96         33.53        2.42     29.15
Construction       168.82       141.13      10.18    (16.40)
Services    3,148.22    2,868.96      65.95 (8.87)
Wholesale and Retail Trade    1,126.66    1,103.21      38.45      (2.08)

Transportation, Storage and Communication

       359.99       171.22        5.97    (52.44)
Finance, Insurance, Real Estate & Business Services       788.51       892.87      31.12     13.23
Community, Social and Personal    Services       873.06       701.67      24.46    (19.63)

                          Source:  DTI V

   In terms of investments, a total of 35,517 jobs were created from new investments as monitored by the DTI. This number was only .17 percent higher than that of last year. As against the Plan targets, actual jobs created were over by 251 percent.  Among the provinces, Camarines Sur generated the highest number of jobs, followed by Albay, Masbate, Sorsogon, Camarines Norte and Catanduanes. 

Table 4 Number of Employment Generated by New Investments
Bicol Region : CY 2005 and CY 2006

Province Actual Accomplishments Plan Targets Actual vs Targets
2005 2006 % Change 2005 2006 2005 2006
Total 32,462 32,517 0.17 11,250 12,938 288.55 251.33
Albay 7,740 8,296 7.18        
Camarines Norte 3,657 3,908 6.86        
Camarines Sur 9,064 9,473 4.51        
Catanduanes 2,269 2,199 (3.09)        
Masbate 5,154 4,402 (14.59)        
Sorsogon 4,578 4,239 (7.40)        

                 Source:  DTI V and MTRDP 2004-2010

 

Table 5 Employment Performance by Sector
Bicol Region CY 2004 vs CY 2005 

Industry Group

 2005 2006 % Share
(2006)		 %
Change
Total     32,462     32,517         200        0.17
Agriculture, Fishery      1,370         768        2.36 (40.58)
Industry      7,070      8,436      25.94      19.32
Mining and Quarrying         351         371        4.40        5.70
Manufacturing      5,668      7,063      83.72      24.61
Electricity, Gas and Water         122         194        2.30      59.02
Construction         929         808        9.58     (13.02)
Services     24,022     23,313      71.69       (2.95)
Wholesale and Retail Trade     11,078     11,556      49.57        4.31

Transportation, Storage and Communication

     2,928

     1,803

       7.73

    (38.42)
Finance, Insurance, Real Estate & Business Services

     2,527

     2,602

     11.16

       2.97

Community, Social and Personal  Services

     7,489

     7,352

     31.54

      (1.83)

                          Source:  DTI V

   Among the sectors, Services created 71 percent of jobs from new investments in 2006, Industry with 26 percent while AFF with a paltry 2 percent.  Industry was the only sector that recorded an increase in jobs created with 19 percent growth while Services and AFF were down by 3 percent and 44 percent, respectively. Growth in jobs generated by Industry could be attributed to an increase in the number of people employed by EGW and Manufacturing due to a number of rehabilitation projects.  The performance of the other sub-sectors was presented in Table 5.

 

   To further promote entrepreneurship and create more jobs, the DTI has been active in the provision of assistance to the different local government units (LGUs) for the promotion of the One Town One Product (OTOP) Program.  In 2006, the Orgullo Kan Bikol Trade Fair showcased the OTOP products of the different provinces of the region. These are ceramics of Albay; pineapple of Camarines Norte; hinabol of Camarines Sur; lasa of Catanduanes, dried fish of Masbate and pili of Sorsogon. It was also in 2006 that the OTOP Luzon Island Tarde Fair was first launched where a total of 21 SMEs in Bicol participated at Megatrade Hall of SM Mega Mall in Mandaluyong City and a total sales of Php 1.008 million was generated. The product focus for the 2006 fair includes: gifts and housewares, furniture and furnishings, footwear and leather goods, fashion accessories, garments, holiday décor and ceramics, processed food, organic and natural products, paper/packaging products, healthcare and wellness services and ICT services.