Tuesday, May 26, 2009 [ sunstar.com.ph ]
By Ryan D. Rosauro
NORTHERN Mindanao officials are eyeing big-ticket “relevant infrastructure projects” as principal driver in pump-priming Mindanao’s largest regional economy amid its declining performance as a result of the global economic crisis.
Camiguin Governor Jurdin Jesus Romualdo, chair of the regional development council (RDC), said the primary challenge at this time is to “save and create more jobs.”
Although its exports in 2008 -- valued at US $889.55 million -- grew by more than a third over that of 2007, reduced demand for oleochemicals,
crude coconut oil and canned pineapples in recession-hit United States, Japan and Europe has led to an industrial slowdown in the region.
Contributing to the industrial slack is a projected weak demand for cement and steel.
The Department of Labor and Employment (Dole) had earlier anticipated layoffs and shorter work hours to befall an estimated 34,000 workers throughout the region in 2009.
In its 2008 State of the Region Report, the National Economic and Development Authority (Neda) identified the big-ticket infrastructure projects as the US $167.1 million Laguindingan Airport, US $2 billion Hanjin Shipyard, and the P2.5 billion Panguil Bay Bridge.
The fast implementation of the ongoing airport development project is expected to employ around 3,700 persons throughout the year, the report noted.
On the bridge, Romualdo said that the contract on geophysical survey and geotechnical investigation on its site was already awarded last January, and its construction is targeted to commence sometime in 2010.
In a big blow to the region, the shipyard project was shelved by the Korean-owned Hanjin Group after some debacle with local officials. The venture was expected to employ 45,000 people either through direct or indirect employment.
But Romualdo said the RDC “remain positive” the company will still consider pursuing it at the Phividec Industrial Estate in Tagoloan, Misamis Oriental.
He emphasized the need to “boost private sector confidence” so that investors, especially of big-ticket projects, will be enticed to locate in the region. He pointed to the need to further reduce cost of doing business.
The 2008 Report on Regional Economic Developments prepared by the department of economic research of the Bangko Sentral ng Pilipinas (BSP) also cited the big-ticket projects as opportunities for positive performance for northern Mindanao, particularly in the industry and services sectors.
But the BSP also pointed to significant opportunities in agriculture, banking on an impressive sectoral performance last year.
The Neda said that regional agricultural productivity has been consistently rising from 6.7 percent in 2007, underpinned by greater physical access to market centers, expanding availability of irrigation and post-harvest facilities, massive provision of hybrid seeds and fertilizer subsidy.
This was a significant growth engine given that the sector employs more than 840,000 persons in the region.
The Neda report especially noted increased production in palay, white and yellow corn, fruits and industrial crops, and fisheries in 2008.
Meanwhile, the BSP report also noted a 10.3 percent “significant growth” of chicken production in the region which is a major contributor to the 5.8 percent national growth in 2008, and a 2.9 percent growth in cattle production.
Moreover, development officials are also looking into other growth areas of the regional economy in 2008 that can be cultivated further.
The construction of 4,024 housing units, mostly socialized housing, valued at P1.1 billion in 2008 contributed to regional economic performance.
The Neda expects that the adjustment in socialized housing loan ceiling by the Housing and Urban Development Coordinating Committee (HUDCC), from P300,000 to P400,00, will help sustain the housing sector’s growth amid escalation of prices of construction materials. The HUDCC pegged interest rate still at six percent per annum.
The influx of investments coupled with the 10.7 percent growth in the trade subsector is credited by NEDA for generating 99,000 jobs in the region in 2008.
This would help explain the BSP report findings that showed northern Mindanao, along with Central Luzon, leading nine regions in the country in terms of decline in unemployment rate. In 2008, unemployment rate went down in northern Mindanao from 6 percent to 4.7 percent, 9.2 percent from 10 percent in Central Luzon.
Amid the global economic crisis, the agency is banking on the micro, small and medium-scale enterprises (MSMEs) to cultivate new commercial and investment opportunities.
In 2008, the MSMEs accounted for a fourth of the P1.05 billion new investments in the region; they also absorbed more than three-fourths of the P8.5 billion loans granted by Land Bank, the Development Bank of the Philippines and Quedancor, the Neda report showed.