IN 2010, the economy of Central Luzon recovered from the previous year’s slump, according to the regional office of the National Economic and Development Authority (Neda).
For instance, employment increased by 143,000—a development that reduced the unemployment rate from 9.4 percent to 9 percent, with the bulk of 3.72 million employed belonging to the services sector.
“Although the labor situation was much better in 2010 compared to 2009, the recovery was not enough to land the region at the planned target of achieving an unemployment rate of 6.6 percent in 2010,” the Neda said in an assessment report.
It said the positive development is expected to continue to 2011. The sources of growth are: the impact of the past election spending, especially on the services sector; the uncapping of government expenditures on hiring and capital projects; the release of government funds in the last quarter of 2010; and the general buildup of private sector confidence in government brought about by the high level of integrity and trust in President Benigno S. Aquino III.
Drop in inflation
Average inflation in the past 11 months dropped to 2.82 percent from 3.8 percent in 2009, National Statistics Office data showed. The inflation rates for fuel, electricity and water, however, did not decline.
Rice production in Central Luzon during the first six months of 2010 grew to 1.46 million metric tons (MMT), which was 1.75 percent higher than the 1.43 MMT produced during the same period in 2009.
Tarlac, Pampanga and Nueva Ecija increased their rice production by 7 percent, 3.4 percent and 2.14 percent, respectively. Nueva Ecija produced nearly half of the 49.7 percent of total regional production. Central Luzon contributes 22 percent to the national rice supply.
However, corn production in the region fell to 174,393 metric tons (MT) in the first six months of 2010 from 189,202 MT during the same period in 2009.
The Department of Agriculture in the region traced the low growth in palay and the drop in corn production to the prolonged dry spell.
At the same time, however, the region drew in more domestic tourists which outstripped the number of international visitors during the period.
Neda also revealed that foreign direct investments (FDIs) at the Clark Freeport as of October reached P24.2 billion, which is four times bigger than those made in 2009. It said FDIs at the Subic Bay Freeport, meanwhile, totaled P4.76 billion during the period.
“There’s more confidence now in so far as investing money for business enterprises is concerned,” said Kenny Bansale, president of the Nueva Ecija Chamber of Commerce and Industries (NECCI).
“Before, [investors] were afraid that their hard-earned money would just go to waste because of the not-so-good business climate. It is a different story now,” he said.
Bansale said it is apparent that Mr. Aquino brought confidence to the business community when he assumed office in July. He predicted that food processing, bamboo craft and milk production are enterprises that will start to flourish in Nueva Ecija.
In the Cordillera, the region’s poor economic performance in 2009 led local economists to expect slight improvements in 2010 and 2011, so its political leaders have decided to rely on a third attempt to create an autonomous region instead.
Baguio City Mayor Mauricio Domogan had been hosting fora for Cordillera stakeholders toward the end of 2010, to draw inputs for a draft autonomy measure he was tasked to put together before March 2011.
He said the measure must pass through Congress for ratification before the next elections in 2013, to show to Cordillerans that the exercise has not been tainted by partisan interests.
The third bid for autonomy was pushed by the Cordillera Regional Development Council as far back as 2008.
Members of the RDC argue that the Cordillera needs a steady government subsidy for a limited period to improve its infrastructure, instead of competing with other regions for funding allocations from the annual budget.
The 1987 Constitution requires the creation of autonomous regions in the Cordillera and Muslim Mindanao. The first two laws creating the Cordillera Autonomous Region provide a 10-year subsidy of as much as P50 billion.
The third proposed autonomy law pushed the subsidy to P75 billion.
In July 2008, Neda recorded a slide in the area’s gross regional domestic product from the 7.1 percent of 2007 to only 1.8 percent two years ago. The Cordillera economy improved slightly in 2009 during which Neda recorded a growth rate of 2 percent.
But an RDC fact sheet took stock of the dwindling economic contribution of former industry leaders like mining.
Government was also unable to fulfill a public-private sector pledge to restore mountain roads devastated by landslides that were triggered by typhoons in 2009.
Lack of government spending
As 2010 ends, most of these damaged roads remain in disrepair, owing to less government spending, according to the Department of Public Works and Highways.
There are signs, however, that 2010 has been good for the region. For the last three quarters of 2010, the Department of Trade and Industry recorded P1.8 billion worth of investments. Close to P1-billion of these investments were poured into Baguio, which hosts the Baguio City Economic Zone and the Camp John Hay Special Economic Zone.
In Pangasinan, business in Dagupan City and adjoining towns is expected to boom in 2011 with the entry of shopping mall giants SM in Dagupan and Robinsons in Calasiao town.
A Robinsons mall is already under construction in Calasiao while SM still has to overcome obstacles like the extension of a major road and the conversion of the site’s land use permit from that of a fishpond to commercial land.
“If these problems are resolved, I don’t know of any reason for more delays. If Dagupan will not host it, [SM] will open it somewhere else, so we might as well grab it,” Mayor Benjamin Lim said.
While Lim’s family owns retail stores in the city and different Pangasinan towns, his son, Bryan, said the entry of SM and Robinsons is “good for the competition.”
“We will just have to come up with a good marketing plan to be able to compete. Besides, the establishment of SM would bring up the prices of land in the eastern barangays and that would be good for landowners,” the younger Lim said.
Mayor Lim, however, is worried that the extension of the North Luzon Expressway through the Tarlac-Pangasinan-La Union Expressway (TPLEx) that will pass through eastern Pangasinan and the establishment of the Alaminos airport project in western Pangasinan may negate the growth of central Pangasinan.
“The question is, how do we access the expressway from Dagupan or from central part of the province? The expressway will benefit only Urdaneta City and part of the fifth and sixth districts,” he said.
“With an airport in the west and an expressway in the east, central Pangasinan could be left behind economically unless there is a road network to pass through central Pangasinan that will link the Alaminos airport to the expressway in Urdaneta,” he said.
Lim said 2011 will be a positive year for many businessmen because of the new government and the confidence in the Aquino administration.
“It is expected that investments from abroad will come in. President Aquino has made a pitch for the Philippines already, so the mining, manufacturing and agriculture [sectors will experience a] surge in investment and money inflow from abroad,” he said.
“The playing field is level now. The national government does not favor anyone, so everybody is [interested] in partnering with [them] in building roads, bridges, highways, airports, seaports and tollways,” he said.
Reports from Tonette Orejas and Anselmo Roque, Inquirer Central Luzon, and Vincent Cabreza and Yolanda Sotelo, Inquirer Northern Luzon