Regional infra boost to fuel growth

MANILA, Philippines - Despite steadily increasing their share in the country’s economic output, regions will have to be equipped with better infrastructure in order to raise growth further, the research arm of Metropolitan Bank & Trust Co. (Metrobank) said.

 “While growth seems to be more dispersed on a regional scale, improvements to infrastructure and connectivity to metropolitan hubs are still needed in order to raise outputs and income levels,” Mabellene Reynaldo, research analyst at Metrobank, said in a report.

“Agro-industrial infrastructure should also be developed in order to raise poverty levels in less-urbanized regions, since most of the current growth is still driven by the services sector,” she added.

The National Capital Region, Region IV-A or Calabarzon and the Central Luzon region accounted for two-thirds of the country’s gross domestic product in 2013, based on the latest regional statistics released by the government.

“Apart from being the largest economies in the country, their momentum show no signs of fading as their CAGR over five years are still well above the pace of the entire country,” Reynaldo recounted.

The CAGR or compound annual growth rate is a measure of growth over a period time.

From 2009 until last year, NCR made up 36 percent of the country’s economic output, while Calabarzon accounted for 17 percent, the report said. Central Luzon contributed nine percent during the period, Central Visayas put in another six percent, while Western Visayas accounted for four percent.

 hile most of economic contribution seems to be Luzon-centric, pockets of growth are seen in smaller economies, primarily from Mindanao,” Reynaldo said. 

 “Over the past five years, Caraga posted the fastest CAGR out of all 17 regions at 9.4 percent. Northern Mindanao is also moving above GDP growth while Socsargen’s annual growth has been accelerating since 2009,” she added.

Tourism and real estate have helped boost growth in Mindanao, while domestic consumption continued to drive economic output.  

 “Robust growth in each region’s services sector and higher per capita incomes are the likely drivers for their strong performance,” Reynaldo said.

The Philippine economy grew a stellar 7.2 percent last year, sustaining the faster-than-expected 6.8 percent in 2012.

In the first quarter, the economy grew by disappointing 5.7 percent but the government kept its 6.5 to 7.5 percent target for the full year.