Northern Mindanao economy grows to 7% in 2018
CAGAYAN DE ORO CITY, Philippines – Northern Mindanao (Region 10) economy grew to 7% in the full year of 2018, according to the Philippine Statistics Authority (PSA) Region 10.
In an economic briefing Thursday, April 25, the PSA-10 said the robust economy of Northern Mindanao surpassed the national 2018 average Gross Domestic Product (GDP) of 6.2%.
Northern Mindanao is the 9th biggest economy in the Philippines and the 2nd in Mindanao.
Janeth Aves, officer-in-charge of PSA-10 said that the 2018 growth was faster than the 5.8% growth in 2017. She added the accelaration was driven by the industry and services sector.
“It is also higher than the national average growth of 6.2% GDP,” Aves said.
The services sector have the highest share with 44.1%, followed by industry with 35.6% and agriculture at 20.3%.
The services sector grew to 8.9% while industry expanded by 8.8% in 2018.
National Economic Development Authority (NEDA) 10 regional director Mylah Fave Aurora Careño said that the growth is well within their targeted range of 5.5-7.1% and is the region's highest growth since 2006.
“Clearly we are now in higher growth trajectory and we want to maintain this momentum,” Careño said.
“The industry growth was fueled by the surge in construction as it grew by 16.3%, the fastest among sub-sectors,” Careño said.
Careño attributed this construction growth to public spending in the infrastrucure in Northern Mindanao boosted by the government's Build, Build, Build program.
Build, Build, Build program is the priority project of President Rodrigo Duterte to infuse and stimulate economic growth in the Philippines.
Careño also credited public administration and defense spending which expanded by 12.6% as expense on personnel services and operating costs increased, including hiring of new teachers and uniformed services.
“All of these gives as a sense of accomplishment as we topped our growth targets for industry and services. However, the other side of the story is equally important as we note formidable challenges confronting agriculture,” Careño said.
Agriculture, forestry and fishing (AFF) slumped from 4.7% in 2017 to just 0.4% in 2018, “way below the plan target of 4 to 6%. AFF contributed a meager 0.1 percentage point to the region's annual growth,” Careño said.
Careño said that the higher objective is to significantly reduce income poverty among farmers who depend on subsistence agriculture and farm workers who have seasonal income and low wages.
Careño attributed the slump in agriculture to the decline in employment over the past decade.
“Aging farmers and lack of successors also contribute to the sector's problem,” Careño added.
Careño said that the challenge is how to make the AFF sector more competitive and high-paying to encourage young people to pursue farming as a career.
Aves said that Northern Mindanao is the 9th fastest growing regional economy in the Philppines in 2018, and it contributes 3.8% in national economy. It is also the 7th biggest regional economy.
This economic growth in Northern Mindanao, Careño told Rappler, contributed to the reduction of poverty in the region.
In 2017, the region's indicators showed that it had a poverty incidence of 35%. As the economy improved, the poverty incidence dropped to 25%.
Careño added that the challege is to deliver basic services to geographically isolated, conflict affected communities to address poverty incidence in the region.
Careño said that a survey released in March 2019 showed that despite the reduction of 10% in poverty, there were still 1.5 million residents in the region who considered themselves poor.
“We have to rethink some of our strategies, it cannot be that we will do the same things that we are used to,” Careño said.
Careño added that the Regional Development Council created the convergence areas for peace and development (Capdev) where they identified focus areas that needed intervention.
Each intervention is unique as no two towns have the same needs and challenges, and there were areas that needed more interventions than the others.
“These are areas that are geographically isolated and disadvantaged, poverty stricken areas and also conflict affected areas. They are the ones that we give interventions priority, our focused areas of intervention. We are following the principle of equity,” Careño said.
This year, the budget for interventions to address poverty in priority areas is P2.6 billion. The government also tapped private sources to allocate funding to leverage for addressing poverty problem.
Careño said that as economy grows in the region, it becomes a magnet of urban migration. She challenged the local government units to plan their economic activities and implement their Comprehensive Land Use Program (CLUP) to better prepare their services and identify their commercial, residential and open spaces.
Careño said that in 2019, the region is set to enjoy investments growth.
“After a subdued performance in 2018, investments are expected to set pace this year as billions worth of investments are being poured into the region,” Careño said.
Region 10 topped the Board of Investment (BOI)-approved projects in 2018 with P228.8 billion, or 25% of the total given the green light in the country. Total investments okayed by the BOI in 2018 amounted P907.2 billion.
“Expectedly, these investment pledges will be transformed into actual investment in 2019 and beyond,” Careño added.
In the Misamis Oriental ecozone under the Phividec complex, a $4.4 B integrated steel manufacturing complex is in the pipepline and will become the largest industrial investment in the region once realized.
Steel Asia Manufacturing Corporation's integrated steel mill is expected to generate 20 thousand jobs.
Ralph Pagiuo, Cagayan de Oro Chamber of Commerce and Industry past president said that region should prepare and cope with all these investments.
“We're not very used to prosperity and we are not used to things that's doing very well, but now that it is doing very well, we must try our very best to provide the necessary requirements like for example, skilled labors, skilled managers, facilities, housing, services to cover the situation,” Paguio said.
Paguio said that the region must take the opportunity of growth while preparing the work force that will meet the demands of new jobs.
“What is the end goal of these, its really to help the economy and at the same time, make it faster that those underpreviledge will benefit from all of these,” Paguio said.
"The region's economy is robust and steady. And we remain optimistic that the region has ample room to grow. We hope to have the continued support of government agencies, the PSA, the private sector and other stakeholders this growth is what we aspire for all Filipinos: to have a strong, comfortable, and assured life for all," Careño said. – Rappler.com