The economic output of the NCR rebounded but still below pre-epidemic levels
By Bernadette Theresi M. Gadan, Researcher
The economy of the National Capital Region (NCR) is back Since the double-digit contraction last year in 2020, but has remained below the national growth rate due to the severe lockdown to contain the coronavirus.
Preliminary results from recent regional accounts released by the Philippine Statistics Authority (PSA) show that the NCR’s economic output grew 4.4% last year, reversing a 10% decline in 2020. However, it was still less than 7% growth in 2019
Metro Manila growth was also much lower than last year’s revised 5.7% economic growth in the Philippines.
The growth of the NCR was the third slowest among the 17 regions of the country, ahead of only Bicol (-8.3% in 2020 to 4.3% in 2021) and Mimaropa region (-7.5% to 3.3%).
Other regions that missed the national average last year were Central Visayas (5.4%), Soksaksargen (5.2%), Cagayan Valley (5.1%), and Ilocos Region (4.6%).
Of the 17 regions, Calabarzon had the fastest growth rate at 7.6%, a change from a 10.5% decline in 2020. It follows the Bangsamoro Autonomous Region in Muslim Mindanao (-1.9% to 7.5%), followed by the Cordillera Administrative Region (7.5%) (-10.2%), and Central Luzon (7.4% to -13.9%).
Even so, NCR remained the largest contributor to national economic output last year with a 31.5% share, slightly lower than the 31.9% in 2020. It was followed by Calabarzone with 14.7%, Central Luge with 10.9% and Central Visayas with 6.5%.
Paciano B. Dijon, PSA-NCR Regional Director, said the capital region grew more slowly in 2021 than other regions due to the severe lockdown in the Covid-19 outbreak.
“If you willffIdentify some regions and cities, more actually lockdown in NCR [last year] (There were several lockdowns in the NCR last year). So it contributes to the slower growth rate of the NCR compared to other regions, “Mr Dijon said at a press briefing in Queens City on Thursday.
Metro Manila was placed under various levels of lockdown last year. The harshest form of lockdown was applied in April and August as COVID-19 infections increased.
The government moved to a precautionary measure, including a granular lockdown, in the fourth quarter only, and restrictions were further relaxed in November and December.
In addition to stifling mobility, economists say Metro Manila’s growth last year was due to a base effect from the previous year’s contraction and the gradual reopening of the economy.
John Paolo Rivera, an economist at the Asian Institute of Management, said in an e-mail that “barriers to economic reopening may contribute to slower growth than in other regions where restrictions and new policies are quite predictable compared to the NCR.”
Nicholas Antonio T., Senior Economist, ING Bank NV Manila Branch. Mapa noted that the growth of the NCR was the slowest due to severe lockdown and high number of cases.
“So, it is clear that economic recovery and public health go hand in hand,” he said in a separate e-mail. “Base effects and reopening could result in transport and storage pickup drives while mining and excavation could benefit from the president’s decision to allow new mining contracts.”
In terms of sectoral output, Caraga led regions in the services sector with an 8.1% increase last year, reversing a 5.3% decline in 2020. Soccsksargen and BARMM lag behind 6.7% (from -8.9%) and 6.6% (from -4.5%), respectively.
By industry, CAR increased 16.3% (from -13.7%), followed by Central Luzon (-19.9% to 13.8%) and Calabarzon (-12.6% to 11.2%).
BARMM saw the fastest growth in agricultural sectors, including 8.3% (up from 2.7%), followed by Central Visayas (4.2% to 5.6%) and NCR (-3.3% to 5.5%).
In terms of spending, Caraga recorded the fastest pace of household spending with 10.6%, in contrast to the 7.8% contraction in 2020. It follows East Visayas (-7.9% to 10.2%) and Cagayan Valley (-8.4 to 9%). %).
BARMM had the fastest pace of government spending at 12.6% (up from 11.3%), followed by Cagayan Valley at 11.6% (up from 8.8%) and Central Lugan at 8.9% (up from 9.1%).
Investment components of the economy, including 93.9% (from -50.1%), Calabarzone (-53.9% to 46.4%) and Central Luzon (46.3% to 42.6%), had the fastest growth of BARMM in total capital formation.
After double-digit contraction in 2020, NCR and East Visayas last year recorded the highest exports of goods and services to the rest of the world at 12.3%.
Meanwhile, imports of BARMM increased by 100.9%, as against -26.9% seen in 2020. Imports from Western Visayas and North Mindanao increased by 27.2% (-17.5%) and 17% (-12%), respectively.
On a per capita basis, Metro Manila led the regions with P418,530 in 2018 fixed prices, an increase of 3.2% – a change from -11.1% in 2020. However, it was still below the 5.6% growth in 2019
This year, analysts expect much faster economic growth as COVID-19 cases have decreased and sanctions have eased.
“Assuming there is no other disruption due to epidemics or other factors, it will continue to grow rapidly. There are no exact figures at the moment, but the trajectory is promising, “said Mr Rivera.
The government is aiming to expand its gross domestic product (GDP) by 7-9% this year.
Mr Mapa said consumer spending could be “dramatically improved”, especially for leisure, meals and leisure activities, thanks to a more relaxed lockdown level.
Metro Manila and most parts of the country are under the most flexible warning levels.
He added, “It is essential for the authorities to ensure that the economy is as open as possible, but always be vigilant to ensure support for the public health sector.”
Robert Dan J. Rosses, chief economist at Securities Bank Corporation, said any renewal lockdown this year could delay economic recovery.
“We are in an epidemic, especially at risk of further outbreaks due to the experience of lockdown by some big Asians. [cities]However, the level of vaccination in the capital is encouraging and hopefully enough will be enough to prevent case spikes and survive reopening, ”he said in a separate e-mail.
“Another major risk is the conflict between Russia and Ukraine, with inflation, rising commodity prices and rising commodity prices, and possibly declining productivity,” he added.
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