First Quarter CY 2011

Prices

INSIDE THIS ISSUE:

Prices

1

Labor & Employment

2

Inflation rates lower this quarter ... Figure 1

Inflation Rate

External Trade

2

Agri-Analysis

3

Development Outlook

7

1st Qtr 2010 vs 1st Qtr 2011

4.6 3.9

2.3

3.6 3.3

2.5 2010 2011

HIGHLIGHTS:

• Inflation rates lower than last year • Employment rate higher by 0.1 percentage point • Exports increased by 31.8 percent • Imports increased by 69.8 percent • Palay production declined by 3.7%

January

March

Source: NSO Region VIII

The inflation rate or the rate of change in price of commodities this quarter was slower compared to the same period of last year. At an average rate of 2.7 percent, it was lower by 1.3 percentage point compared to the first quarter of last year. Figure 2

Average Inflation Rate per Province First Quarter 2011

• Corn production significantly declined by 12.8% • Coconut production slightly declined by 0.4% • Abaca production declined by 7.5% • Root crop production increased by 4.3% • Fish production declined by 2.5% • Livestock and poultry production declined by 0.6% Source of Basic Data: : NSO Region VIII www.neda8.ph

February

Among the six commodity groups, the inflation rates of fuel, light and water (FLW) and food, beverages and tobacco (FBT) recorded higher than the regional average inflation rates. This means that prices of these commodities changed faster than other commodities in the region. Across provinces, So. Leyte, E. Samar and Samar posted inflation rates, higher than the regional average of 2.7 percent. The inflation rates in these three provinces were pushed up by FLW. Compared with the fourth quarter of 2010, inflation rate this period was higher by 0.5 percentage point. Due to higher inflation rates posted by FBT, services and FLW this quarter. Across provinces, only Biliran managed a reduced inflation rate.

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First Quarter CY 2011

Labor and Employment Employment rate slightly increased but underemployment rate also increased...

The preliminary results of the January 2011 Labor Force Survey (LFS) showed that the region had 2.8 population 15 years old and over. Labor force participation rate this quarter was 64.0 percent, lower by 0.8 percentage point than the first quarter of 2010. This placed the labor force population at 1.79 million. Employment rate, at 93.7 percent, slightly increased by 0.1 percentage point. The October LFS showed that more men (63.4%) are employed then women (36.6%).

Table 1

Labor Force, Employment, Unemployment and Underemployment Rate First Quarter 2011

Labor Force Participation Rate Employment Unemployment Underemployment

1st Qtr 2011

4th Qtr 2010

1st Qtr 2010

64.0 93.7 6.3 24.4

63.8 93.9 6.1 24.1

64.8 93.6 6.4 22.8

Source: NSO Region VIII

Table 2

Employed Persons by Sex and Major Occupation Group October 2010 Major Occupation Group

Men

Women

Total

Laborers and unskilled workers

393

476

869

Farmers, Forestry workers, fishermen

420

101

521

Officials of government and special interest organizations, corporate executives, managers, managing proprietors and supervisors

129

198

327

Source of Basic Data: NSO Region VIII

By occupation, a great percentage of both sexes were laborers and unskilled workers, at 35.8 and 34.9 percent, respectively. Next higher occupation for men was fishing,

farming and forestry work. Women, on the other hand, were employed as officials of government and special interest organizations, corporate executives, managers, managing

Percentage point change Q1 2010 vs Q4 2010 vs Q1 2011 Q1 2011

-0.8 0.1 -0.1 1.6

0.2 -0.2 0.2 0.3

proprietors, and supervisors. By industry, 43.8 percent of men were in agriculture, hunting and forestry while 34.5 of women were in wholesale and retail trade. Underemployment rate was higher this period than the first quarter of last year. More people wanted additional work to augment their income. Almost half of the employed were underemployed or worked less than 40 hours a week. Compared with the fourth quarter of last year, labor force participation rate was higher by 0.2 percentage point. Employment rate, however, declined by 0.2 percentage point while underemployment rate increased by 0.3 percentage point.

External Trade Value of exports and imports increased…

Exports The volume of exports declined by 47.7 percent this quarter. Total value of exports, however, increased by 31.8 percent compared to the value recorded in the same quarter of last year. From $270 million in the first quarter of 2010, it went up to $356 million. The value of cathodes and sections of cathodes, which comprised 63.8 percent of the region’s total value of exports for the period increased by 20.6 percent. Said commodity is exported to China, Thailand, Korea, Vietnam and Malaysia from

Figure 3

Value of Exports and Imports 1st Qtr 2010 vs 1st Qtr 2011 (in million US dollar)

356

347

309

1st Qtr 2011

4th Qtr 2010

Exports Source: NSO Region VIII

270 182

277

1st Qtr 2010

Imports

First Quarter CY 2011

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Table 3

External Trade continued…

Top 5 Exports and Imports

the ports of Isabel, Leyte and Leyte Industrial Development Estate (LIDE). Crude oil, which comprised 22.3 percent of the total value of the region’s exports for the period posted a triple digit increase (114.7%). Compared to the value recorded in the fourth quarter of last year, the value of exports for this quarter was higher by 2.8 percent. The increase in the value of crude oil and diammonium hydrogenorthophosphate (diammonium phosphate) may have contributed to the increase in the total value of exports despite the reduction in the value of exports of mineral and chemical fertilizers, refined oil and cathodes and sections of cathodes.

First Quarter 2011 Exports

Imports

Cathodes and sections of cathodes

Copper ores and concentrates

Crude oil

Salt, sulphur; earths and stone, plastering materials, lime and cement

Diammonium hydrogenorthophospate

Anhydrous ammonia

Mineral or chemical fertilizers

Sulphur of all kinds

Refined oil (cochin)

Ammonium sulphate

Source of Basic Data: NSO Region VIII

Imports For this quarter, the volume and value of imports increased at the same rate of 69.8 percent. From $182 million in the same quarter of last year to $309.2 million this period. Copper ores and concentrates, which comprised the bulk of imports, registered an increase of 86.3 percent. This commodity is imported from Indonesia and Papua New Guinea, the two top importer of the said commodity for the period. Said commodity is used as raw material for the production of copper cathodes in PASAR.

Agri- Analysis Major crops production declined by 2.0% this quarter... Table 4

Major Crops Production In Metric Tons Percentage Point Change

Indicator

Q1 2011*

Q1 2010

Q4 2010

Q1 2011 & Q1 2010

Q1 2011 & Q4 2010

Palay

244,317.00

253,772.00

295,988.00

-3.7

-17.5

Corn

10,269.00

11,775.00

23,844.00

-12.8

-56.9

383,537.87

385,090.96

477,065.24

-0.4

-19.6

4,574.67

4,944.35

5,246.63

-7.5

-12.8

642,698.54

655,582.31

802,144

-2.0

-19.9

Coconut (unhusked) Abaca (dried raw fiber) Total

Source: Bureau of Agricultural Statistics, Region VIII

Palay Production Because of the continued rainfall that hit Eastern Visayas in the early part of this year, palay production declined by 3.7%. From 253,772 metric tons in the first quarter of 2010 to 244,317 metric tons this quarter. Compared with the fourth quarter of last year, a negative growth rate of 17.5% was also noted. About 9,000 hectares of palay plantation throughout the region were damaged by continuous

* Preliminary Data

heavy rainfall and 45% of the affected areas were totally damaged. Thus, area harvested in the first quarter of 2011 declined by 3.2%. From 81,283 hectares in the first quarter of 2010 to 78,657 hectares this quarter. Also, yield per hectare decreased by 0.3%. From 3.12 metric tons yield per hectare in the first quarter of 2010 to 3.11 metric tons yield per hectare this quarter.

First Quarter CY 2011

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Palay Production, continued... Corn Production

Source: Bureau of Agricultural Statistics, Region VIII

Across provinces, only Eastern Samar and Samar provinces showed positive growth rates in palay production. Samar posted a significant increase of 25% which can be attributed to an increase in the area harvested. From 13,300 hectares in the first quarter of 2010, to 16,499 hectares this quarter.

Corn production significantly declined by 12.8%. From 11,775 metric tons in the first quarter of 2010, it went down to 10,269 metric tons this quarter. Compared to the fourth quarter of 2010, a huge decline was also recorded. Contributing to the decrease of corn production was the 10.7% decline in area harvested. From 7,908 hectares in the first quarter of 2010, to 7,059 hectares this quarter. Also, yield per hectare declined by 2.7%. From 1.49 metric ton yield per hectare in the first quarter of last year to 1.45 metric ton yield per hectare this quarter. Continued rainfall damaged corn farms in Eastern Visayas.

Coconut Production Table 5

Coconut production slightly decreased by 0.4%. From 385,090.96 metric tons in the first quarter of 2010, to 383,537.87 metric tons this quarter. Compared to the fourth quarter of last year which recorded a 477,065.24 metric tons production, this quarter’s production significantly declined by 19.6%. The fruiting fatigue (cyclical pattern), which remains a threat in Leyte, and the dry spell during the previous quarters in Southern Leyte contributed to the decline in coconut production. Coconut product and by products are sold locally and abroad. Among the product’s market are the United States, Europe, Canada, Asia, Australia and China (the biggest market). Some of the coconut products are: crushed copra, organic coconut flour, organic coconut chips (unsweetened), toasted coconut chips, crude coconut oil, refined oil/refined bleached deodorized coconut oil, virgin coconut oil, coconut fatty acid distillate and copra cake. Table 3 shows that an increase in price of copra corriente was noted in all provinces, with Biliran and Southern Leyte posting the highest increase. This can be attributed to the high demand for copra in the local market with the growing number of coconut oil processing plants in Eastern Visayas. In the first quarter of 2011, average price of copra

Farmgate Price of Copra Corriente, by Province 2010 and 2011 Pesos per Kilogram

Province

2011*

2010

Jan

Feb

Mar

Jan

Feb

Mar

Biliran

52.69

53.41

44.32

12.57

14.14

18.55

E. Samar

26.36

22.38

21.22

9.71

10.82

9.87

Leyte

38.70

40.15

32.10

13.46

13.82

14.53

N. Samar

43.32

35.59

25.36

12.54

12.78

13.43

S. Leyte

43.93

53.49

41.42

14.52

15.40

15.86

Samar

31.96

39.38

30.86

12.15

12.58

15.49

E. Visayas

39.49

40.73

32.55

12.49

13.26

14.62

Source: Bureau of Agricultural Statistics, Region VIII * Preliminary

corriente in Biliran increased by 232% or around P35.00 per kilogram compared to the average price in the same quarter of last year. Eastern Samar, on the other hand, recorded an increase of 130% or around P13.00 per kilogram.

First Quarter CY 2011

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Abaca Production

Table 6

Farmgate Price of Abaca, by Province

Abaca production declined by 7.5%. From 4,944.35 metric tons in the first quarter of 2010 to 4,574.67 metric tons this quarter. Compared to the production level in the fourth quarter of last year, it also declined by 12.8%. Mosiac and bunchy top diseases continue to affect production in Baybay City, Mahaplag, Inopacan, Ormoc City and Burauen. Abaca products are sold abroad. Markets include United States, Germany, France, Spain, Netherlands, China, Taiwan, Korea and Japan. Abaca products are used as meat casting, teabags, various types of filter papers, currency paper, bank notes & security paper. Abaca pulp is used as replacement for asbestos roofing and for capacitator. Abaca manufacturers in Eastern Visayas get their supply not only in Region VIII but also in other regions in Mindanao, Bicol, and Cagayan De Oro, depending on the grade and intended use as demanded by clients abroad. Intensive research to match the needed abaca supply for these companies is needed so that abaca farmers in the region could produce high quality abaca fibers and increase their income.

2010 and 2011 Pesos per Kilogram 2010

2011

Province

Jan

Feb

Mar

Jan

Feb

Mar

Biliran

29.00

30.82

32.10

18.75

19.64

18.95

E. Samar

38.26

36.07

36.78

35.98

35.96

35.98

Leyte

41.45

40.98

41.96

37.63

37.56

37.77

N. Samar

28.74

28.74

28.72

24.62

24.25

24.25

S. Leyte

41.86

44.13

44.50

39.20

38.42

37.95

Samar

31.53

30.83

31.25

23.90

24.12

24.92

E. Visayas

36.87

37.14

37.63

36.30

36.03

36.07

Source: Bureau of Agricultural Statistics, Region VIII

As shown in Table 4, all provinces recorded an increase in price of abaca (dried raw fiber). Southern Leyte recorded the highest price of abaca in Eastern Visayas followed by Leyte. As of March 2011, the price of abaca in Southern Leyte, which was recorded at P44.5 per kilogram, increased by 17.3% or P6.55 pesos per kilogram compared to the same month of last year where it stood at P37.95 per kilogram. Increase in abaca prices in Eastern Visayas can be attributed to the continued demand for abaca pulp and other abaca products locally and abroad.

Rootcrop Production Table 7

Rootcrop Production In Metric Tons Percentage Point Change

Indicator Camote

Q1 2011*

Q1 2010

Q4 2010

Q1 2011 &

Q1 2011 &

Q1 2010

Q4 2010

16,525.56

16,654.60

13,909.58

-0.8

18.8

111.58

115.31

4,759.31

-3.2

-97.6

Cassava

25,732.57

23,848.65

11,820.01

7.9

117.7

Total

42,369.71

40,618.56

30,488.90

4.3

39.0

Gabi

Source: Bureau of Agricultural Statistics, Region VIII *Preliminary Data

Total rootcrop production increased by 4.3%. From 40,618.56 metric tons in the first quarter of 2010, to 42,369.71 metric tons this quarter. It also managed to increase by 39% compared to the fourth quarter of last year despite a significant decline in gabi production due to prolonged rainy season. Area planted to cassava increased because of the growing demand of San Miguel Corporation.

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First Quarter CY 2011 Table 8

Fish Production In Metric Tons Percentage Point Change

Indicator

Q1 2011*

Q1 2010

Q4 2010

Q1 2011 &

Q1 2011 &

Q1 2010

Q4 2010

Commercial

17,582.59

19,978.70

15,463.67

-12.0

13.7

Aquaculture

9,740.90

7,103.01

9,032.65

37.1

7.8

Municipal

22,509.53

24,009.10

20,040.96

-6.2

12.3

Total

49,833.02

51,090.81

44,537.28

-2.5

11.9

*Preliminary Data

Source: Bureau of Agricultural Statistics, Region VIII

Fish Production Total fish production decreased by 2.5%. From 51,090.81 metric tons in the first quarter of 2010, to 49,833.02 metric tons this quarter. However, it managed to increase by 11.9% compared to the fourth quarter of 2010. Aquaculture production significantly increased by 37.1% while commercial and municipal fish production declined by 12% and 6.2%, respectively. Production from marine and commercial fisheries declined due to cold weather and heavy

rains. Also, some commercial fishing vessels have temporarily dry docked for repair and renewal of licenses. Others, however, stopped due to increasing operating cost. Frequent rains also decreased the number of fishing trips both for municipal and inland fishing. Commercial fishing was still at a declining trend because of high fuel prices and farther fishing grounds.

Table 9

Livestock and Poultry Production

Livestock and Poultry Production Total livestock and poultry production slightly declined by 0.6%. From 40,628.44 metric tons in the first quarter of 2010, to 40,382 metric tons this quarter. Production also decreased by 11.9% compared to the fourth quarter of last year. Cold weather condition and flashfloods contributed to the decline in livestock and poultry production. Supply of livestock and poultry in the region was still at a normal level, although, the region was still dependent on the supply coming in from Mindanao.

In Metric Tons Percentage Point Change

Indicator

Q1 2011*

Carabao

Q1 2010

Q4 2010

Q1 2011 & Q1 2010

Q1 2011 & Q4 2010

1,360

1,365

3,821

-0.4

-64.4

669

648

370

3.2

80.8

28,237

28,873

28,556

-2.2

-1.1

390

373

327

4.6

19.3

9,327

8,958

12,588

4.1

-25.9

Duck

399

411

195

-2.9

104.6

Total

40,382

40,628

45,857

-0.6

-11.9

Cattle Hog Goat Chicken

Source: Bureau of Agricultural Statistics, Region VIII *Preliminary Data

First Quarter CY 2011

Development Outlook: 1. The P380 million fund to be allocated by the Department of Agriculture (DA) for irrigation projects in Samar is expected to benefit 2,000 families or an additional 7,140 hectares irrigated land. This includes the completion of irrigation projects in Catarman-Bobon and Mondragon, restoration of Macagtas irrigation system in Catarman and the construction of irrigation canals of the Catubig Dam. 2. On-going rehabilitation and repair of major roads in the provinces of Samar and Northern Samar that were damaged by the continuous heavy rains. 3. Construction of farm-to-market roads in the municipalities of Marabut, Maydolong, Basey and Calbayog City is underway. 4. The Basey Irrigation Project is expected to be completed this year and will provide water to 3,000 hectares of rice farms. 5. DOST is allotting P14 million to the Province of Northern Samar to help the small entrepreneurs in improving the labeling and packaging of local farm products. 6. The Millennium Challenge Account-Philippines (MCAP) is scheduled to release this second semester of 2011 the first tranche of the $434 million grant from the United States Millennium Challenge Corporation (MCC). Majority of the disbursement is to finance the rehabilitation of Samar and E. Samar road.

Sources of Data: National Statistics Office (NSO), Regional Office VIII National Statistical Coordination Board (NSCB), Regional Office VIII Department of Agriculture (DA), Regional Office VIII Fiber Industry Development Authority, Regional Office VIII Philippine Coconut Authority, Regional Office VIII Bureau of Agricultural Statistics, Regional Office VIII Bureau of Fisheries and Aquatic Resources, Regional Office VIII Leyte Samar Daily Express (LSDE) Eastern Visayas Probe West Leyte Weekly Express SC Global Coco Products, Inc. Baybay, Leyte Pulp Specialties Philippines, Inc., Albuera, Leyte www.bas.gov.ph http://bles.dole.gov.ph

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