Second Quarter 2014

National Economic and Development Authority

EV-REMA

Eastern Visayas – Regional Economic Monitoring and Analysis A quarterly update of the economic performance of Eastern Visayas

Highlights The regional economy showed a mixed performance in the second quarter of 2014. While some sub-sectors showed positive growths, others posted downturns.

Inside this Issue: Page 2 Agricultural Production

All major agriculture crops, except palay and sugarcane, exhibited decreases in the volume of produce.

4 Construction

Total construction projects with approved building permits slowed down but grew by 30% from the previous quarter.

4 Vehicle Registration 5 Shipping Statistics

Vehicle registration contracted by 9.62%. The passenger traffic in PMO Ormoc increased but cargo traffic decelerated. PMO Tacloban registered a decline both in passenger and cargo traffic.

5 Revenue Collection

Total revenues fell short of the target collection and the actual collection of last year. Total crime volume increased. efficiency, however, decreased.

Crime

solution

6 Peace and Order 6 Prices 6 Labor and Employment 7 Development Outlook

At the macro level, inflation rates moved faster than last year. Employment rate declined as the Province of Leyte was excluded in the April LFS.

Downloadable at: nro8.neda.gov.ph

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Second Quarter 2014

Agricultural Production

Corn

Agri-fishery production in the second quarter this year was lower than in 2013. Major agriculture crops, except sugarcane and palay, exhibited reductions in the volume of produce (Figure 1).

Total corn production for the second quarter had a 4.74% shortfall against the 32,562 MT of last year. Harvest from Samar, Southern Leyte and Leyte registered contractions of 28.33%, 2.11%, and 1.38%, respectively. These are attributed to the 18.64% (Samar) and 1.48% (Southern Leyte) reductions in area planted and rat infestation in Leyte.

Figure 1 Production Growth Rate of Major Agriculture Commodities in Eastern Visayas: Second Quarter 2013 vs Second Quarter 2014 (in percent)

Among the six provinces, Leyte had the biggest share of 73.00% to the regional production (Figure 3). Figure 3 Share to Eastern Visayas’ Corn Production by Province Second Quarter 2014 (in percent)

Palay Corn Coconut Banana (Saba) Sugarcane Abaca Rootcrops Fishery

Source: Philippine Statistics Authority (PSA) VIII

Palay Despite the incidence of stem borer and rat infestation, palay production for the second quarter of 2014 grew at 1.39% from last year’s 77,071 MT. The region contributed 7.46% to the national harvest, making it the fifth largest contributor this period.

Source: PSA VIII

Coconut Similarly, coconut production was 23.71% less at 282,713 MT from last year’s 370,593.32 MT. The crop has yet to recover from the devastating effects of ST Yolanda, which toppled over 33.82 million trees in 295,192 hectares.

Across provinces, Leyte, with 62.47% share to the regional production, is still the frontrunner. Southern Leyte, with an impressive 384% growth from the first quarter, ranked second and added 14% to the regional palay harvest (Figure 2).

Northern Samar drew in 35% to the region’s quarterly harvest while Samar shared 33% (Figure 4).

Figure 2 Share to Eastern Visayas’ Palay Production by Province Second Quarter 2014 (in percent)

Figure 4

Share to Eastern Visayas’ Coconut Production by Province

Second Quarter 2014 (in percent)

Source: PSA VIII Source: PSA VIII

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Banana

Abaca

Total banana (saba) production in April-June 2014 was estimated at 39,337 MT, 24% lower than the same quarter of 2013. ST Yolanda damaged 17,651 hectares of banana farms. Replacement banana plants are not yet in the bearing stage, thus the low yield.

Meanwhile, the production of abaca fiber continued to decline. From 5,482 MT in 2013 it dropped to 3,978 MT in 2014, posting a decline of 27%. As an effect of the reduced supply, the farmgate price of abaca jumped by 15.93% from an average of PhP35.12/kg to PhP40.71/ kg.

Accounting for nearly half of this quarter’s harvest, Samar continued to be the highest producer. Southern Leyte added 21% (Figure 5).

Northern Samar had the biggest share of 48%. Southern Leyte and Samar added 22% and 14%, respectively (Figure 6).

Figure 5 Share to Eastern Visayas’ Banana Production by Province Second Quarter 2014 (in percent)

Rootcrops Total rootcrop production declined by 9% from the same quarter in 2013. Huge cuts were noted in Leyte (-23.36%) and Samar (-6.81%). This led to increases in farmgate prices of 18% and 19% of cassava and camote. A third of the region’s harvest for the quarter was from Northern Samar. Leyte followed at 31% (Figure 7). Figure 7 Share to Eastern Visayas’ Rootcrops Production by Province Second Quarter 2014 (in percent)

Source: PSA VIII

Sugarcane The Bureau of Agricultural Statistics, now integrated with the Philippine Statistics Authority, reported that the sugarcane production recorded the best growth rate among agricultural commodities of the region this quarter. Its production grew by an impressive 126% or 162, 487 MT from last year’s 71,857 MT. Note that 99.99% of the sugarcane output is from the Ormoc-Kananga area in Leyte. Figure 6 Share to Eastern Visayas’ Abaca Production by Province Second Quarter 2014 (in percent)

Source: PSA VIII

Fishery Total fishery catch registered the among the region’s agricultural quarter. From last year’s 61,324.95 negative 33.11%. This is the lowest records since 2006.

worst growth rate commodities this MT, it slumped by in fishery statistical

The same trend was also observed in all sub-sectors. Despite the substantial distribution of fishing boats to Yolanda-affected fishers, the volume of municipal fisheries production shrunk by 12.92% over that of last year. Municipal fisheries shared 57% to the total fisheries output for this quarter.

Source: PSA VIII

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Similarly, commercial fisheries, which accounted for 21% of the total catch, noted a 47% slippage from last year despite the reported good weather and increase in number of fishing boats, trips, and unloadings.

commercial-type buildings comprised most of the non-residential construction projects. More than half of these construction projects were in Leyte. Figure 9

Total aquaculture harvest for this quarter is only half of last year’s produce. This is understandable since rehabilitating destroyed ponds, cages and farms would entail costly expenses. Aquaculture contributed 22% to the regional catch.

Number of Construction Projects by Type Second Quarter 2014 (in percent)

Among provinces, only Northern Samar displayed a growth of 4%, thus enabling it to contribute 13% to the region’s catch for the quarter. Leyte still dominates with 29% (Figure 8). Figure 8 Share to Eastern Visayas’ Fishery Production by Province Second Quarter 2014 (in percent)

Source: www.census.gov.ph

Vehicle Registration The total number of vehicles registered in the region for the quarter contracted by 9.62% compared to the same period in 2013 (Table 1). Most of the vehicles registered were private (88.57%). Only around 10% were vehicles-for-hire. This is an indication that public transport industry was hard-put in restoring operations after Yolanda.

Source: PSA VIII

Construction

Table 1 Motor Vehicle Registration Second Quarter 2013 vs Second Quarter 2014

New construction projects based on approved building permits slowed down to 510 this quarter from 555 a year ago. Nevertheless, it grew by 30% from 391 in the previous quarter. This increase was largely due to massive reconstruction of both residential and nonresidential buildings damaged by ST Yolanda. At PhP652 million, the total value of construction was slightly lower than last year’s PhP652.5 million but 47% higher than the previous quarter.

Source: Land Transportation Office (LTO) VIII

Accounting for 1.6% of the national total, new construction projects in the region marked an improvement from the 0.7% share in the fourth quarter of 2013 and 1.3% in the previous quarter.

The decline in motor vehicle registration is still attributable to the lingering effects of ST Yolanda. The Registration Units of the district, extension and regional offices of the Land Transportation Office (LTO) share only one Information Technology (IT) server which slows down processing of transactions. The unstable power supply during the period also aggravated the situation.

Residential construction projects were high at 309 or 61% while non-residential construction reached 81 or 16%. The combined total for alterations/repair and additions totaled to 120 or 23%.

To improve the registration transactions, the E-Patrol Unit, which was previously based in Sogod, Southern Leyte, was transferred to Tacloban City and is now used to cater to registrations and issuance of licenses to the transacting public.

By type of construction, single-type buildings dominated the residential projects. On the other hand,

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Shipping

Passenger Traffic

Cargo Traffic

The passenger traffic of PMO Tacloban slightly decreased by 1.43% because of a slight drop in traffic in San Ricardo and BALWHARTECO Ferry Terminal in the month of May. In contrast, PMO Ormoc registered a 17% increase in its total passenger traffic (Figure 11) credited to the presence of Ocean Fast Ferry with a maximum of four daily trips and the entrance of MV Graceful Stars of Roble Shipping at Baybay port and MV Lady of Love at Palompon port.

Cargo throughput for both Port Management Offices (PMOs) Tacloban and Ormoc suffered a decline on a year-on-year basis (Figure 10). That of PMO Tacloban decreased by 13% as compared to the same period in 2013. Domestic cargoes dropped by 10% due to minimal production of copra products as an after effect of ST Yolanda. Similarly, foreign cargoes suffered a 28% decline due to the non-exportation of coconut products at baseport Tacloban and minimal loading of crude minerals, copra, and copra by-products both from the government and private ports.

Source: PPA – PMOs, Tacloban and Ormoc

Revenue Collection The total revenue collection for the quarter was recorded at PhP1.35 billion, short by 25% from the target of PhP1.85 billion and also lower by 7.3% from the year-ago collection of PhP1.46 billion. Nevertheless, it managed to grow by 25% from the revenue collection in the first quarter of this year (Figure 12).

Source: Philippine Ports Authority (PPA) – PMOs, Tacloban and Ormoc

On the other hand, PMO Ormoc incurred a 38% decline in its total cargo throughput as compared to the same period of 2013. The reduction can be attributed to the slow production and lesser volume of local incoming and outgoing commodities due to the damages wrought by strong typhoons that affected the Visayas area. The ongoing rehabilitation of the Philippine Associated Smelting and Refining Corporation (PASAR) and Philippine Phosphate Fertilizer Corporation (PHILPOS) ports damaged by ST Yolanda resulted to limited operations in transporting foreign commodities. The big decrease in the volume of copper concentrates transported locally from PASAR and fewer shipment of gypsum and fertilizer products carried in and out of PHILPHOS led to the drop in domestic cargo throughput by 15%. Foreign cargoes significantly declined by 63% due to the reduction in the amount of imported raw materials from foreign countries as main commodities for PASAR and PHILPHOS.

Source: Bureau of Internal Revenue (BIR), Revenue Region 14

The slowdown in the region’s revenue collection could have been brought about by the decrease in the collection of value-added tax (particularly in wholesale and retail trade), and business services; percentage tax on services; and other taxes consisting of registration fees, fines and penalties, and documentary stamp tax.

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It can be observed that the business establishments have not yet fully recovered from the devastating effects brought of ST Yolanda.

Data in 2014 already included barangay blotters and reports from other law enforcement agencies. In previous years, only incidents reported to the PNP units were counted.

Similarly, the region’s revenue collection for the quarter was pulled down by lower remittance on withholding tax on value-added tax (VAT), withholding tax at source, and withholding tax on compensation.

Prices The year-on-year headline inflation rate continued to accelerate to 7.4% in the second quarter of 2014 from the year-ago rate of 3.5% (Figure 14). Nonetheless, it moved slowly from the quarter-ago rate of 7.6% as the prices of food and non-alcoholic beverages and communication waned.

The Province of Leyte was expected to contribute 62.2% to the region’s total goal collection but along with other provinces in the region, it failed to hit the target collection for the period.

Peace and Order The total crime volume in the second quarter of 2014 totalled to 6,909 incidents. This was 3,557 incidents more as compared to the same quarter of 2013 (Figure 13). The increase in crime volume was due to improvements in the crime reporting system of the Philippine National Police (PNP). Among provinces and cities, Leyte recorded the highest number of crime incidents (33.75%) while Ormoc City posted the lowest (3.3%). Index crimes are most prevalent in highly-populated areas such as the Province of Leyte. Incidence of index crimes is also directly related to urbanization. More efforts should be exerted to reduce the incidence of street crimes particularly in Leyte, through heightened police visibility and patrols.

Source: PSA VIII

The uptick in inflation from 3.5% in the second quarter of 2013 was largely the result of higher prices of food and non-alcoholic beverages; transport; and restaurant and miscellaneous goods and services. The region’s inflation rate is already beyond the target range of 3.0 5.0% and has been the highest among regions since July 2013. The national average was 4.3%.

Of the total crime volume for the quarter, 48.60% (3,358 incidents) were index crimes while 51.36% (3,551 incidents) were non-index crimes (Figure 13).

Except for Leyte and Biliran, the four other provinces posted higher inflation rates than the regional average for the quarter.

Purchasing Power of Peso The higher prices of goods brought down the purchasing power of peso to 0.67 from 0.73 a year ago. This is below the national average of 0.72. Compared to the quarter-ago level, it was slightly lower.

Labor and Employment The January 2014 Labor Force Survey (LFS) did not cover Region VIII. Likewise, the April 2014 LFS did not include the Province of Leyte. Both exclusions were due to ST Yolanda, eventually affecting the employment and labor statistics of the region for the two periods.

Source: Philippine National Police (PNP) VIII

The crime solution efficiency was placed at 23.23%, a decrease from the same quarter of the previous year, recorded at 24.91%. Again, the dramatic rise in number was due to a change in the methodology of recording incidents.

Minus the situation in Leyte, the data nevertheless show that labor force participation rate for the quarter was high at 67.6%. This could be explained by the seasonal influx of new graduates from the school year that ended.

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Employment rate decreased by 1.3 percentage points from the 95% employment rate in April of 2013 to 93.7%. This current rate is equivalent to 1.1 million employed workers. The decline is surmised to be caused by the displacement of many workers due to ST Yolanda. However, this may not be conclusive considering the exclusion of the region and Leyte in the first two surveys conducted in 2014.

projects (34.08%), social services projects (33.1%), resettlement projects (19.72%), and livelihood projects (13.05%) Moreover, Samar reported that the typhoon damage amounted to PhP5.3 billion and losses, PhP342 million. The province’s total funding requirement is PhP7.4 billion with a big portion (49.8%) alloted to social services, 28.7% to the productive sector, 20.2% to the infrastructure sector, and 1.2% to cross-sectoral projects.

While underemployment is down by 2.7 percentage points from the same quarter of the prior year, it remains high at 18.1%, considering that this percentage is equivalent to a total of 87,000 underemployed workers.

Tacloban City suffered the greatest damage from the typhoon. The total damages, based on Tacloban City Recovery and Rehabilitation Plan is estimated at about PhP7 billion. With the following breakdown: PhP2.5 billion for infrastructure, PhP726 million for productive sectors, PhP3.4 billion for the social sector, and PhP361 million for other cross cutting sectors. The total budget for the identified projects in the rehabilitation plan is PhP20.7 billion. Economic development and livelihood needs PhP12.8 billion, shelter - PhP4.7 billion, infrastructure- PhP2.1 billion, and social services PhP690 million.

The agriculture, forestry and fishery sector contributed more than half of the workers employed (51.8%) or 558,000 workers followed by the services sector (40.2%) or 433,000 workers. The least contribution was from the industry sector (8.1%) or 87,000 workers. A big portion (41.7%) were in stable and remunerative work, classified as wage and salary workers. Table 2 Rates of Labor Force Participation, Employment, Unemployment and Underemployment Second Quarter 2013 vs Second Quarter 2014

Once implemented, the typhoon-affected areas will see better days.

Thank you to our data providers: Philippine Statistics Authority: Bureau of Agricultural Statistics VIII National Statistical Coordination Board VIII National Statistics Office VIII

Source: PSA VIII

Development Outlook

Bureau of Internal Revenue-Revenue Region XIV Land Transportation Office VIII

The approval of the Yolanda Rehabilitation and Recovery Plans of Leyte, Eastern Samar, Samar, and Tacloban City on July 25, 2014 was announced during the State of the Nation’s Address (SONA) of Pres. Benigno S. Aquino III. This signaled the massive implementation of rehabilitation projects in the region. An estimated PhP96 billion will be downloaded to fund reconstruction projects along infrastructure, resettlement, social services and livelihood sectors.

Philippine National Police VIII Philippine Ports AuthorityPort Management Office of Ormoc City Philippine Ports AuthorityPort Management Office of Tacloban City census.gov.ph

The Province of Leyte estimated that their total damage and losses (March 2014 PDNA) amounted to PhP74.9 billion. The total funding requirement to finance the rehabilitation projects in the next three years (20142016) was estimated at Php22.7B. From this amount 41.1% is allotted for infrastructure, 28.2% for resettlement, 18.9% for environment, 7.1% for social services, and 1.36% for livelihood, trade and industry.

Contact us for more information: Policy Formulation and Planning Division (PFPD) NEDA Regional Office VIII, Government Center Palo, Leyte 6501 Telephone/Fax: (053) 323-3092 Website: nro8.neda.gov.ph

Eastern Samar, on the other hand, recorded a total damage of more than PhP5.3 billion. Rehabilitation and recovery needs will entail an estimated amount of PhP9.91 billion to cover the cost of infrastructure

Email: [email protected]

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