I.
Summary
The trade and industry sector was vulnerable to the
escalating prices of oil especially during the first to
third quarters of the year and the global financial crisis.
Exporters were adversely affected by the appreciation of the
peso.
The erratic price of oil brought about by volatile
world crude price caused prices of goods and services in the
Bicol Region to shoot up to two digit levels. During the
second quarter, people were alarmed by the surge in the
domestic price of rice. Although the prevailing wholesale
and retail prices of rice went down towards the last quarter
of the year, they were still above the 2007 average level.
Inflation rate in the region averaged to 9.5 percent. High
inflation rates happened despite the appreciation of the
peso as against the dollar which recorded an average growth
of 3.76 percent.
The sustained increase in prices and high oil prices
negatively affected consumer confidence resulting to a
slowdown in financial services, retail trading,
transportation and communication. These factors also
affected investors’ confidence in general.
Export and investments have been the significant engines of
growth in any developing economy like the Bicol region.
With the global economy teetering on the brink of recession,
trade and industry was among the first sectors affected by
the global financial crisis that affected the economy of the
United States and other European countries which happened to
be still the biggest markets of the region’s export
products.
In terms of its contribution to the economy, the industry
sector most likely grew slower than the 18.5 percent growth
in 2007, and may even be lower than the updated plan target
of 6.5 percent.
II.
Assessment
In the Updated Bicol Development Plan 2008-2010, the trade
and industry sector was deemed to steer the region’s economy
towards sustained growth and creation of employment
opportunities.
However, the global financial crisis that started in 2007
and became evident in September 2008 lowered foreign demand
not only for merchandise exports but also for products that
the region was exporting like home furnishings, wearables,
furniture and gifts and holiday decors. Records from the
Department of Trade and Industry (DTI) showed that this
event brought down export sales by about 34 percent from $31
million in 2007 to only $20 million in 2008. Demand for
export products also decreased due to the sharp rise in the
value of the peso that made our products more expensive to
overseas buyers. Another factor that contributed to the
decline in export sales was the lack of investments in the
export sector. In Albay alone, from 55 exporters in 2002,
the number went down to only 25 by 2008.
Investments in paid up capital by stock corporations of the
Securities and Exchange Commission (SEC) and business name
registration of the DTI showed different picture as
investments registered by both agencies increased by 13
percent. Per DTI’s records, the biggest contributors to the
region’s investments were Albay and Camarines Sur with
shares of 38 percent and 29 percent, respectively. The
growth was also brought about by the on-going construction
of business establishments like Embarcadero and Hotel St.
Elis in Legazpi City, Sutherland Global Services in
Camarines Sur, SM in Naga City, the renovation of Mayon
International Hotel and opening of branches of Liberty
Commercial Center (LCC) in other municipalities.
Employment generated by new investments grew by five
percent. However, the Regional Tripartite Wage and
Productivity Board (RTWPB) reported that there were 206
workers displaced from November to December 2008 alone: 166
from the Pacific Cordage Corporation in Albay and 40 workers
from YNLU Bicol Mining Corporation in Paracale, Camarines
Norte.
The objectives in the Updated Regional Development Plan to
increase GRDP share of the trade and industry sector and
increase employment were slightly attained. Trade performed
poorly in 2008. Other Industry sub-sectors like
construction, electricity, gas and water and mining and
quarrying likely remained strong.
The strategy in the Plan to upgrade infrastructure
facilities that would support the trade and industry sector
is on-going. These projects are the rehabilitation of the
Quirino and Maharlika Highways, construction of GMA Highway,
Albay West Coast Road and Caramoan Peninsula Road, six RORO
Ports (Tandoc, Esperanza, San Pasual, Cawayan Claveria and
Guijalo), telecommunications, drainage system, and the
typhoon-damaged power generating plants in the region. In
2008, however, no activities were undertaken by the
government to rehabilitate the PNR Mainline South and the
Pantao port that were damaged by strong typhoons in 2006.
To help exporters and MSMEs become globally competitive, DTI
launched the Orgullo Kan Bikol Showroom in October 2008 to
showcase new products from indigenous materials other than
abaca, thereby addressing the problem on the unreliable
supply of raw materials for their handicraft products. These
new products were made from pagokpok, salago, sorghum and
tikiw. DTI also helped Bicolano exporters diversify into
food processing and manufacturing. The “Chosen Pili” as a
seal of excellence for all pili products produced in Bicol
was also introduced in 2008. The “Chosen Pili” logo would
serve as the quality mark or icon of Bicol’s pili products.
All Bikolano pili producers and manufacturers were
encouraged to pass through an accreditation process with the
DTI to qualify to use the logo of “Chosen Pili”.
Consistent with the activities of the DTI, the DOST
continued to provide assistance to its clients on technology
transfer and commercialization, testing and calibration,
packaging and labeling and consultancy services to improve
productivity, quality and presentation of Bicol products.
On the promotion of MSMEs and OTOPs, the DOST and DTI
conducted market matching activities, trade fairs, fora,
credit financing and product research and development
trainings.
To facilitate and encourage private sector to establish
businesses in the region, the National Economic and Research
Business Assistance Center (NERBAC) - Bicol was established
at the DTI Regional Office to house all government agencies
in charge of business registration, licensing and permit
issuances. As a one-stop-action center, it provides services
to the business sector on business information, investment
servicing, business development and streamlining business
registration and licensing.
III.
Prospects and Trends for 2009
All the necessary infrastructure support facilities for the
trade and industry sector must be put in place to prepare
the region for the global economic rebound. The projects
identified under the Economic Resiliency Plan for Region 5
should be implemented as planned.
The region should also focus on productivity and quality
improvement to make our products more competitive in the
world market. Investment in the export sector must be
encouraged to strengthen export performance and make our
exporters be in a better position once global rebound hits
two or three years from now.
