GRDP numbers show recovery is underway
The latest Gross Regional Domestic Product figures for 2021 recently announced by the Philippine Statistics Authority are very important numbers for people like me who live outside Metro Manila.
According to the PSA website, all regions are reported to have entered positive growth, these numbers, in my view reflect pre-pandemic growth rates.
Among Mindanao’s regions, the Bangsamoro Autonomous Region clocked 7.5 percent, the country’s second highest followed by the CARAGA Region at 7.2 percent. All regions except SOCKSARGEN grew better than the national 5.7 percent GDP growth rate. Mindanao's two largest economies, the Davao Region and Northern Mindanao reached 5.9 percent and 6.3 percent respectively. As far as I can see, these numbers reflect pre-pandemic growth rates.
Beyond these numbers, what do gross regional domestic product growth rates tell us?
For one, apart from showing us how regional economies are faring, it also reveals which regions contributed most to national gross domestic product.
These figures also reveal a lot about our fundamentals, particularly the young population that consumes much to fuel demand for products and services. As Covid-19 cases declined, demand rose, pushing opportunity and growth that comes with more economic activity. These figures also show how much growth can take place when disruptions are placed under control, or when they pass.
These figures also show us that while Mindanao’s regions score high growth rates, their contribution to total GDP will rise when more value added investments in Mindanao’s agriculture and natural resources sector, which serves as its comparative advantage when compared against other regions. With the CREATE Law’s lower corporate income taxes and rationalized incentives and improved infrastructure and connectivity over the last few years, I am confident that investor interest in Mindanao’s manufacturing and agroprocessing potentials will also expand in the coming years.
Various business events and the high attendance of foreign participants especially in online webinars reveal this potential. Likewise, the increase in foreign chambers of commerce in Mindanao also show higher foreign business interest in Mindanao.
What needs to be done, as I have written previously, (Why I see more investments coming) April 18, 2022 is to push an investment promotion and capture agenda at the regional level through the Regional Development Councils (RDCs). This can be done alongside local business groups. Added to this is a suggestion that the Department of Trade and Industry take stock of areas and locations within their respective regions where large investments can be established.
Moving forward, as the nation’s economy continues to recover though, the threat of disruptions from other causes remains, such as global conflict and natural disasters. This is where we will need to be vigilant in managing inflation, a high rate of which dampens growth since it hampers spending due to high prices. On the other hand, lower inflation can encourage more spending since the purchasing power of people increases, which drives demand for product and services, preserving, even increasing employment.
I hope that in the future, GRDP figures can be released earlier in the year, every quarter, so that we in the local economies can track the impact of recent economic reforms and investment promotion activities, and help us identify areas of improvement or increased competitiveness.
Congratulations DCCCII!
Congratulations to the Davao City Chamber of Commerce and Industry for a well-attended and successful general membership meeting at the Radisson Park Inn with guest MINDA Secretary Maria Belen Acosta. This marks the first face-to-face meeting in more than two years bringing the business community together.
Continue to maintain health protocols and stay safe!