THE National Economic and Development Authority (Neda) 7 is anticipating more recoveries from Central Visayas’s pillar industries as economic activities are expected to rebound this year.
However, the agency noted that the main challenge faced by industry players is in raising consumer demand for increased economic activities to take place.
Amid a more relaxed quarantine status, business owners in Cebu have yet to see the return of consumers in various business establishments as fear of getting infected by the coronavirus remains high on top of the still rising Covid-19 cases in the province.
“The main challenge of the region as it enters the new year is to stimulate increased demand in order for economic activities to accelerate. More than the resumption and facilitating of business operations it is also essential that consumer demand and consumption are increased,” said Maria Teresa Alambra of Neda 7, during the Regional Development Council virtual meeting on Friday, Feb. 26, 2021.
Alambra noted that in the latest business expectation survey of the Bangko Sentral ng Pilipinas improved business sentiment was seen across all sectors in Central Visayas except for the industry and construction sectors which were less favorable in the next 12 months.
Neda 7 also expects inflation to remain subdued and fall within the government’s target of two to four percent this year. Almabra warned though of rising prices in some commodities due to supply concerns and rising demand as more people venture out.
La Niña, on the other hand, is posing risk to the region’s expected rebound this year as it could affect crop production, especially of food crops. Neda 7 added that outbreaks of pests and disease, such as the African swine fever are also threats to increased production.
Moreover, employment is expected to improve as many companies are expected to step up and increase capacity utilization this year. Central Visayas saw an average of 10.4 percent unemployment rate from January to October 2020 compared to the 5.2 percent average unemployment rate during the same period in 2019.
“The BSP’s employment outlook index was positive for the first quarter of 2021 and the next 12 months, affirming the view of a possible increase in the number of employees for the said periods,” the Neda 7 said.
2020 performance
Neda reported that the fourth quarter of 2020 was marked by more recoveries following the easing of restrictions and the gradual opening of the economy.
Depressed demand, however, continued to weigh down on most sectors, constraining increased growth.
On inflation, the region ended 2020 with a declining inflation rate. The last six months of the year were marked with a falling inflation rate with December at 0.9 percent, registering the lowest inflation rate in more than a year.
The full year average inflation rate of the region in 2020 was at 1.9 percent, slightly higher than the 1.6 percent inflation registered in 2019 and below the government’s low-end target of two percent.
Cebu had an average inflation rate of two percent last year, Bohol (1.9 percent), Negros Oriental (1.7 percent) and Siquijor at 2.9 percent.
On the retail front, Alambra said the industry’s performance in 2020 was 60 to 70 percent of its 2019 performance caused by the depressed demand even as more businesses resumed operations.
Winners in 2020 are retail businesses involved in sale of basic food and essential items, products associated with house maintenance, sports and physical fitness and hobby-related products.
The region also saw a notable rise in barter trade among micro entrepreneurs and private individuals.
The information and technology and business process management (IT-BPM) industry, on the other hand, registered positive growth in 2020 amid as new IT-BPM companies established their presence in areas outside traditional centers and more accounts were obtained by existing companies.
“Flexibility and a favorable external environment fostered growth of the industry,” the Neda 7 said. It, however, saw a reduction in demand for office space as many IT-BPM firms move to work-from-home setup.
In the area of investments, Central Visayas recorded a total US$19.96 million worth of investments in 2020. Approved investments recorded in the Board of Investments include renewable projects in Bohol and Cebu, accommodation projects, a mining project in Toledo City and mass housing projects in the four provinces in the region. (JOB with KOC)