MACRO ASSESSMENT

 I.  Summary

 

   The assessment of the macroeconomic performance of the region is in relation to the updated plan targets and the previous year's performance or the latest official data.  Except for population growth, the other indicators on poverty, economic growth, employment and prices performed below target levels. 

 

   The discussion on economic growth is based on the Quarterly Regional Economic Situationer (QRES) reports for the year.  It is also based on the 2008 Gross Domestic Product (GDP) estimates at the national level.  This will be updated once the 2008 official Gross Regional Domestic Product (GRDP) estimates are released in July 2009.  Details of the discussion are found in the sectoral chapters.

 

II. Assessment

 

   Reduce population growth rate to 1.5 percent. Bicol's total population reached 5,109,798 in 2007, growing at an average of 1.23 percent per year from 2000.  This is lower than the 1995-2000 average of 1.68 percent and better than the updated plan target. 

 

   The government adopted a population management policy anchored on responsible parenthood, birth spacing, respect for life and total informed choice.  This was carried out through the conduct of classes, orientations and counselling sessions at the grassroots level with the support and active participation of LGUs.  Advocacy materials were likewise produced and widely disseminated.

 

   Reduce poverty incidence of population to 26-27 percent by 2015. Poverty incidence of population in the region was 51.1 percent in 2006, which is a long way from the target.  This means that majority or 2,643,799 Bicolanos are poor.

 

   The lingering effects of Typhoon Reming in 2006, coupled with high commodity prices in 2008 are expected to aggravate the poverty situation.  Poverty alleviation programs that were implemented during the year include the Pantawid Pamilyang Pilipino Program (4Ps), Food for School and Hunger Mitigation Programs, disaster relief and livelihood assistance, and the Kapit Bisig Laban sa Kahirapan Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) and related projects. 

 

   Other mitigating measures were also implemented, such as cash subsidies for senior citizens and drivers, tax relief for minimum wage earners, additional tax exemption, and expansion of health insurance coverage.

Accelerate and sustain economic growth to 5-6.3 percent every year. From a record 7.7 percent growth in 2007, regional economic growth is expected to hit below the target due to the combined effects of high inflation and the global economic recession. 

 

   The agriculture sector showed indications of surpassing the previous year's growth, while the industry and services sectors likely slowed down.  All the sectors, however, may have failed to meet the target growth.

 

   In agriculture, rice and corn production was restrained by heavy rains and high fertilizer costs. However, production of copra and abaca fiber increased, indicating that coconut and abaca plantations have recovered from the typhoons in 2006.  Fishery production, especially mariculture, also increased.  This, despite the red tide in Sorsogon Bay and the fish scare as a result of dead human bodies retrieved from the seawaters of Bicol when the MV Princess of the Stars sank in June. 

 

   In the industry sector, Bicolano manufacturers and exporters were hurt by the strengthening of the peso against the dollar and the global economic meltdown.  Public and private construction was sustained by the continued rehabilitation of typhoon-damaged infrastructure and construction/renovation of business establishments.

 

   Mining and quarrying was tempered by low demand for metals in the global market.  Moreover, operations of the Rapu-Rapu Polymetallic Project under a new management resumed only in the last quarter of the year.  Electricity, gas, and water has recovered with the rehabilitation of typhoon-damaged generating plants.  Electrification coverage also increased, particulary in the province of Masbate.

 

   In the services sector, transportation, communication, and trade only picked up towards the end of the year.  This was when oil prices started to fall and the long holiday perked up demand for goods and services.  Tourism under private services was buoyed by international and national events hosted by the region. 

 

   Although financial services and dwellings/real estate showed signs of sustained growth, the global financial crisis and the closure of three rural banks in the region somehow diminished investor confidence. 

 

   Create 100,000 jobs per year. The average number of employed persons in the region was 1.97 million in 2008, an increment of 10 thousand from the previous year.  This means that the target of generating 100,000 jobs per year was not attained.

 

   Employment rate decreased from an average of 94.7 percent in 2007 to 94.3 percent in 2008.  Conversely, unemployment rate increased from an average of 5.3 percent in 2007 to 5.6 percent in 2008.  The global economic slowdown in the last quarter of the year and the resulting job layoffs contributed to the decrease in employment rate.  Underemployment rate, on the other hand, decreased from an average of 37.1 percent in 2007 to 35.8 percent in 2008.  This implies that the implementation of shortened work hours in lieu of retrenchment has not taken off in the region.

 

   Maintain inflation rates at single-digit levels. The regional inflation rate steadily climbed from 5.0 percent in January to a peak of 13.7 percent in July before sliding down to 8.1 percent in December.  The inflation rate hit the double-digit level in the successive months from June to October, thereby breaching the target of single-digit levels.  Average inflation rate for the year was pegged at 9.5 percent, a high jump from the previous year's average of 3.4 percent.  

 

   Among commodities, the services and food, beverage, tobacco (FBT) items contributed largely to the hike in inflation.  Included under the services item are transport fares, diesel and gasoline prices that experienced price hikes and then rollbacks on account of volatile world oil prices.  Under the heavily-weighted food item, price hikes in rice and corn, cereal preparations and meat pushed up inflation.  The region's Purchasing Power of the Peso (PPP) was pegged at P0.65. 

 

III. Prospects and Trends for 2009

1. Maintain population growth rate at 1.23 percent or lower by expanding the advocacies on responsible parenthood, birth spacing, respect for life and family planning.

2. Widen the coverage of poverty alleviation measures such as the Pantawid Pamilyang Pilipino Program (4Ps), Food for School and Hunger Mitigation Programs, health insurance benefits, cash subsidies, other social welfare and livelihood assistance.

3. Scale down Gross Regional Domestic Product (GRDP) growth estimates to a level within the revised national targets;

4. Implement fast moving infrastructure projects to generate jobs and stimulate the economy;

5. Fasttrack the implementation of the Comprehensive Livelihood and Emergency Employment Program (CLEEP) and other contingency plans for returning overseas Filipino workers, laid off employees, and out-of-school youth.

6. Maintain single-digit inflation rates by ensuring adequate and continuous supply of basic commodities and services.

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