Introduction

   Regional Development Framework 

   Up until the end of CY 2007, a framework focused on poverty reduction as the overarching goal defined Bicol’s development. All efforts were geared toward that aim by the twin strategies of economic growth and job creation and of integrated delivery of basic social services.

 

   Infrastructure and logistics support, knowledge networking, internal security, fiscal reforms and financial strength, and sustainable management of the environment propelled the complementary development schemes. 

 

   All these thrusts were anchored on good governance and involved the participation of the government, the business sector and the civil society upon whose interaction on the rule of law, transparency, responsiveness, equity, effectiveness, efficiency and accountability ensued.

   Macroeconomic Performance

   The following discussion, which is summarized in Table A, presents the macroeconomic performance of the region for 2007 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. Macroeconomic Performance vs. Targets, Bicol Region, 2006-2007

Table D. Incidence and Magnitude of Poor Individuals by Province,
Bicol Region, 2003 & 2006

Source: NSCB

Figure B. Magnitude of Poor Individuals, Province,
Bicol Region, 2006

     Average Family Income and Expenditure

   Based on the 2006 Family Income and Expenditure Survey (FIES), Bicolano families earned an average income of PhP125,000 in 2006 and spent an average expenditure of PhP110,000 leaving an average savings of PhP15, 000 for the year.  Adjusting for inflation, however, the region's average family income actually fell to PhP104,000 in 2006 from PhP109,000 in 2003 at 2003 prices.  This means that from 2003 to 2006, the increase in family incomes failed to catch up with the increase in prices of goods and services for the same period.  This further explains why the poverty situation in Bicol worsened between 2003 to 2006 which is also true to the rest of the country in general.

 

But while average family income fell from 2003 to 2006, income distribution slightly improved as indicated by the Gini coefficient which declined from 0.4660 in 2003 to 0.4428 in 2006 (a Gini coefficient is valued between 0 and 1, where 0 denotes perfect equality and 1 suggests perfect inequality).

     Economic Growth

   The Bicol economy expanded by 7.7 percent in 2007, the highest growth the regional economy has experienced so far.  The industry sector contributed to the growth by a hefty 18.5 percent mainly from construction and mining/quarrying activities.

 

The surge in construction by 68.1 percent was due to the rehabilitation of typhoon-damaged roads, bridges, flood-control structures, school buildings and other public infrastructure as well as the repair and/or construction of commercial buildings and other tourism-related establishments. The boom in construction following massive government spending in key infra facilities also resulted to an increase in the number of employed persons during the year as further discussed in the succeeding section on Labor Force and Employment and increase in outputs of ancillary services and related industries.

 

Mining and quarrying, which grew 38.3 percent in 2006, sustained its momentum in 2007 with a 21.6 percent growth. Despite persistent public clamor for stoppage of the Lafayette mining operations in Albay and the New People's Army (NPA) attack on the El Dore Mining Corporation site in Camarines Norte last October 2007 mining and quarrying contributed a considerable share of 6.9 percent to GRDP. Aside from the large-scale mining operations in Albay and Masbate 14 small-scale mining projects are currently being implemented throughout the region.

 

Although contributing only 1.3 percent to GRDP, the manufacturing subsector accelerated to 4.4 percent from 2.2 percent the previous year buoyed by increased output of food and beverage industries. On the other hand the electricity/water subsector sustained a slump with a negative 10.4 percent growth due to the continued rehabilitation of the region's power generating plants.

 

Growth in the services sector accelerated to robust 6.1 percent from 2.7 percent the previous year.  Under this sector, trade and private services, which contributed 12 percent and 8.9 percent to GRDP, grew by 5.5 percent and 9.8 percent, respectively.  The opening of new hotels and other commercial establishments, particularly in Naga City and other areas in Camarines Sur, spurred trade, tourism and other ancillary services. The increase in tourist arrival, particularly in Camarines Sur, also boosted the performance of the private services subsector.

 

   The ownership of dwellings and real estate subsector rebounded from a negative growth in 2006 to 3.8 percent in 2007 with the repair of residential buildings and lowered interest rates of housing agencies.  Transport and communication expanded by 5.7 percent, only slightly lower than the previous year's growth, with the opening of the Cebu Pacific flights to/from Legazpi/Manila and the increase in the number of newly registered motor vehicles. The other services subsectors, i.e., finance and government services, also expanded by 15.5 percent and 3.4 percent, respectively, due to election-related spending, strengthening of the peso against the dollar and improved fiscal situation of the government.

 

   Agriculture, Fishery and Forestry showed signs of recovery with a 2.3 percent growth, an improvement from the flat growth in 2006.  The implementation of rehabilitation programs and projects, distribution of assorted seeds, fertilizers, fingerlings and fishing supplies resulted to improved outputs of cereal grains and sustained performance of the fisheries sector despite the reported losses of the fishpond industry due to floods, the red tide in Sorsogon Bay and the fishkill incidents in Rapu-rapu, Albay and Lake Buhi, Camarines Sur.

 

   On the other hand, abaca and coconut plantations continued to suffer the effects of Typhoons Milenyo and Reming as production of these perennial crops declined in 2007 compared to the previous year. The recovery of coconut plantations was further hampered by the coconut leaf beetle (bronthispa longissima gestro) infestation particularly in the Province of Sorsogon.

Figure C. GRDP Levels and Growth Rate,
Bicol Region, 2004 - 2007

Table E. GRDP Growth Rates and Contribution to GRDP by Industrial Origin,
Bicol Region, 2006-2007 (In Percent, At Constant Prices)

Source: NSCB (As of July 2006

     Labor Force and Employment  

   Based on the quarterly Labor Force Surveys, total population of 15 years old and over increased by an average of 19 thousand from 3.153 million in 2006 to 3.172 million in 2007. Labor force population stood at 2.07 million in 2007, a slight increase from 2.068 million in 2006.  This resulted to a labor force participation rate (LFPR)of 65.2 percent in 2007 which has been declining for the past three years from 69.6 percent in 2004 to 65.7 percent in 2006. Conversely, those not looking for work or opted not to work increased from 1.085 million in 2006 to 1.103 million in 2007. This suggests an increasing working-age population who is not looking for work or chooses not to work either because it relies on Overseas Filipino Workers (OFWs) remittances or believes there is no work available.

 

   Out of 2.07 million who are looking for work only 1.96 million were employed in 2007 which is an increase of eight thousand from 1.952 million in 2006. The MTRDP target of generating 100,000 jobs per year has not been attained since 2004 based on the yearly increments in the number of employed persons. The region's average employment rate, therefore, has been increasing at a negligible rate from 94.4 in 2005 to 94.7 in 2007. Average underemployment rate for 2007 was 37.1 percent.

 

   The agriculture and services sectors remain to be the major employers in the region accounting for 45 percent and 42 percent, respectively, of the total number of employed persons in 2007. The industry sector absorbed 13 percent of the total employed persons. The additional eight thousand employed persons in 2007 were absorbed by the construction, mining/quarrying, transport/communication, and community services sectors.

   For every 100 employed persons in 2007, 43 were wage and salary earners, 41 were self-employed and 16 were unpaid family workers. The additional 8,000 employed persons in 2007 belonged to the wage and salary earners.

     Price Situation

     In 2007, prices of goods and commodities increased at a faster pace than the previous year as indicated by a higher Consumer Price Index (CPI) of 5.5 index points from 138.7 in January to 144.2 in December compared to the 4.4 index point-increase recorded the previous year.

Table F. Consumer Price Index (CPI) by Item,
Bicol Region, January to December 2007

Source: NSO

   Among the commodity items, Fuel, Light and Water (FLW)registered the highest increase in CPI of 11.3 index points from 170.8 in January to 182.1 in December. This was followed by Food, Beverage and Tobaco (FBT) item with a 6.5 increase in CPI from 133.1 in January to 139.6 in December.  These two items were affected the most by rising world crude oil prices especially during the last quarter of the year.

 

 

Inflation rates continued on its downtrend from the previous year at single-digit levels.  Average regional inflation rate for the year was 5.7 percent, lower than the previous year’s 6.6 percent.  At the start of 2007, the regional inflation rate followed a downward trend until September when it began to climb steadily. It peaked at 4.8 percent in December, past the previous year's end rate of 4.0 percent. Still, the MTRDP target of single-digit inflation levels was attained during the year. Average inflation rate of 3.4 percent for 2007 was lower than the previous year's 5.7 percent.

 

Among the provinces, Camarines Sur, Masbate, and Sorsogon exhibited a relatively lower cost of living in 2007 as manifested by lower CPIs and higher Purchasing Power of the Peso or PPP (Table G).

Figure D. Inflation Rates, 
Bicol Region, 2006 - 2007

Table G. Average Consumer Price Index (CPI) by Item, 
Average Inflation Rate and Average PPP by Province, Bicol Region, 2007

Source: NSO

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