Friday, June 8, 2007

Central Visayas economy upbeat in the 1st quarter

Cebu, Philippines (07 June)—The central Visayas economy performed better for the first quarter this year compared to the same period in 2006 with the agriculture sector, shipping industry, tourism and ICT-related industries leading the growth.

According to the National Economic Development Authority in the region (NEDA-7), the economy of the region was buoyed by the high performance of the agriculture sector that posted a double-digit increase in production; the rosier performance of the shipping and air transportation sector couple with the continuing upward trend of the construction, tourism and IT-enabled industries in the Central Visayas area.

In a briefer that NEDA-7 presented to the members of the RDC-Dev’t Administration Committee meeting today, it bared that agricultural production in the region as a whole posted a 13.5% increase during the first quarter of 2007 with crops and fishery gaining production while livestock and poultry performed poorly.

According to the NEDA report, the fishery sector finally improved its production after several quarters of negative growth having posted almost a 10% increase in Q1 2007, a reversal from a double-digit negative growth in the same period last year.

Palay production on one hand has dropped by 12.5% during the 1st quarter this year. It failed to recover from its dropped in the 4th quarter of 2006 after posting a strong performance in the first three quarters of 2006.

NEDA said, the drop in Palay production this quarter was mainly the result of the dry spell and the rehabilitation of the irrigation canal in Siaton, Oriental Negros that afeected the water supply in some Palay farms in the area.

As a whole, crop production in the region increased by 14.2% from last year’s level with corn, fruits, vegetables and industrial and commercial crops producing very well. In the case of the fisheries sector, 9.9% increase in production was due to the volume of fish unloaded in the various landing centers in CV and a substantial improved harvest of aquaculture products. Tuna and scads species were seen in the region’s fishing grounds that allowed and increase in the fishermen’s catch and there was also an increase in fishing efforts by locals particularly in Malubog Dam and Buswang River in Cebu and in Lake Balanan in Siaton, Oriental Negros.

In the same report, it was noted that there was a high demand of some aquaculture products such as oysters and seaweeds. This encouraged farmers to expand their areas for aquaculture production with additional areas established inTalibon and Trinidad in Bohol for oyster production while more areas in Bien Unido, Bohol were developed for seaweeds farming.

Meanwhile, the construction industry which was considered the growth driver of the regional economy in 2006 remained strong during the 1st quarter. In cebu, Golden Great value properties, Inc. (GGVPI) has invested about P250-million for the development and construction of “Parkmall at 168” at the Mandaue reclamation area and this is expected to open in October 2007. The report also noted that a good number of residential subdivisions began development during the quarter.

Another industry that performed very well in the first quarter was electricity. Its demand and sales were higher by 6.3% compared to that in the same quarter last year and this can be attributed to the additional power requirements from new commercial, industrial establishments and residential units and other on-going construction projects.

The region’s tourism was equally upbeat for the first quarter and it usually influences the performance of the service providers sectors such as banks, retail industries, transportation firms, hotels and restaurants and recreational and personal services industries.

According to the report, tourists’ arrivals in the region soared to as high as 26.1% in Q1 of 2007 compared to last year’s Q4 performance of 15.7 percent. The ASEAN Summit contributed largely to the influx of visitors in central Visayas as well as major events such as the Sinulog festival and the Chinese New Year celebration.

Other performers in the region’s economy are the air transportation industry that posted a 6.4% increase in the number of flights to and from Cebu both domestic and international flights while the shipping industry that benefited from the region’s brisk tourism also noted an increase of ship calls and passengers passing through the region’s major ports by 4% and 2% respectively.

Investments in the region continue to flourish with P12.2-billion registered investments with the BOI in the 1st quarter this year. Companies that registered with BOI during the period were into fashion jewelry, food processing, cement manufacturing, real estate and mass housing development.

Investments in the business process outsourcing (BPO) and call centers particularly in Cebu remained high in Q1 of 2007. A number of existing BPO companies expanded operations in the region in the first quarter among them Sykes-Cebu and Exist Global.

In Bohol, increased investor interests in tourism facilities was noted and during the first quarter of 2007, a number of new resorts started operations among them the Amarela, the Eskaya, Amorita resorts, Bohol Coral Resort and the Dream Native resort are considering pouring in new investments into the province.

With the very good economic performance of the region, inflation rate eased further to 2.5% in the first quarter from 4.2% in Q4 of 2006 and 7.0% in the first quarter of last year. NEDA-7 report said, this is the lowest recorded average year-on-year inflation rate for a quarter since base year for the consumer price index (CPI) was moved from 1994-2000.

Slowdowns in the inflation rates of all the commodity groups contributed to the downtrend, led by the housing group that barely grew at 0.8 percent. Among the food items, eggs posted the highest price increase while miscellaneous foods and cereals registered the lowest price increase. (PIA-Cebu/MBCN)

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