The Monetary Board released today the maiden issue of the BSP’s semestral report on Regional Economic Developments. The new report widens the scope of the BSP’s market surveillance by adding a geographic dimension to the economic indicators that it regularly monitors. Analysis on regional trends and developments also helps sharpen further the BSP’s analytical tools for monetary formulation. Key economic indicators covered by the report include output, prices and employment.
The following are the highlights of the Report:
National Capital Region (NCR) accounts for close to a third of regional output. The NCR remains the hub of economic activity as indicated by its 30.5 percent share to total gross regional domestic product (GRDP) in 2003. The NCR-MM dominated both the industry and services sectors. In agriculture, Southern Tagalog accounted for the largest share or close to one-fifth of GRDP. Although a number of provinces in the region have been converted into industrialized estates and housing zones, it continues to be a highly productive agricultural region due to its livestock production.
Central Luzon leads palay production while Cagayan Valley tops corn production. Central Luzon, known as the Rice Granary of the Philippines, topped palay production in 2004, contributing 2.47 million metric tons of palay. For corn production, Cagayan Valley recorded a remarkable 45.4 percent growth, buoyed by the availability of quality seeds, less occurrence of pests and diseases and competitive prices. The region’s production represented more than 22 percent of the total corn production in the country.
Building permits granted accelerates in Northern and Western Mindanao. The report noted an increase in industrial activity, as reflected by the substantial rise in building permits in Northern and Western Mindanao in 2004. The dramatic growth of 187.3 percent and 171.6 percent in the two regions, respectively, could indicate growing efforts to bring economic progress in these regions to address peace and order concerns and maximize their economic potential.
Hotel occupancy posts double-digit growth in most regions. In the services sector, tourism in most parts of the country turned in a favorable performance as reflected in the double-digit growth in hotel occupancy. Hotels in Cagayan Valley recorded the highest growth in occupancy at 38.7 percent. Cagayan Valley is famous as the spelunker’s, trekker’s and gamefisher’s paradise, attracting local and foreign tourists.
NCR remains the country’s financial capital. NCR, the country’s premiere financial center and home to most banking offices, yielded the lowest banking density ratio of 4,190 persons per bank at-end 2004. Southern Tagalog and Central Luzon followed far behind with 9,695 and 10,428 persons per bank, respectively. Lending operations were likewise concentrated in the country’s capital as it posted the highest loans to deposit ratio of 85.8 percent as of June 2004.
Deposit growth accelerates in Central Mindanao while lending activity rises in the Ilocos Region. Central Mindanao posted the highest increase in bank deposits while the Ilocos Region led the uptrend in loans. Although NCR did not attain the top slot in deposit and loan generation, it accounted for almost 90 percent of deposits mobilized and 68.1 percent of loans extended.
Increase in prices most evident in Cordillera Administrative Region (CAR). The year 2004 generally saw a marked uptrend in prices for key goods and services, particularly food, fuel, and transport. Across regions, inflation rate was highest in the CAR at 8.6 percent, twice the 3.8 percent it registered in the previous year.
Western Mindanao records highest employment rate. The highest employment rate was recorded in Western Mindanao at 94.2 percent, an increase from the 92.4 percent noted in the previous year. Being an agricultural region, it may have benefited from the overall gains of the agricultural sector in the area.
Growth in selected regions hinges on infrastructure, agriculture, tourism and urban development. Prospects for selected regions showed that initiatives are focused on building physical infrastructure such as telecommunication facilities and developing agriculture, tourism and urban centers.