The economy of Northern Mindanao contracted by approximately 5.2 percent in the pandemic year of 2020, losing P44.9 billion with its Gross Regional Domestic Product (GRDP) declining to P 822.6 billion from P 867.4 billion in the previous year.
The Gross Regional Domestic Product (GRDP) is one of the measures being released by the Philippine Statistics Authority every year. The GRDP measures economic performance from the perspective of the producers of goods and services. It covers the value of goods and services produced in the region during the reference period.
Despite this however, there remains many glimpses of a silver lining as the region moves forward into its second pandemic year.
Region X was third among the 17 regions in terms of the slowest contraction of their regional economies, trailing only SOCCKSKARGEN (-4.3 percent) and BARMM (-1.9 percent). The region was also one of the ten regional economies which posted a decline slower than the national contraction rate of -9.6 percent.
By industry, the region recorded the slowest decrease in Education and Other Services. Moreover, the region registered the third-fastest decrease in Transportation and Storage, and fifth fastest decrease in Wholesale and Retail Trade; Repair of motor vehicles and motorcycles, and Accommodation and Food Services.
On the other hand, the region registered the second-fastest growth in Manufacturing among the 17 regions, third-fastest growth in Electricity, steam, water, waste management among the 17 regions a, fourth-fastest growth in Financial and insurance activities.
Manufacturing, Electricity, Financial and Insurance; Information and Communication; and Steam, Water and Waste Management still managed to grow by 11.0 percent, 8.0 percent, 4.7 percent, and 4.4 percent, respectively, despite the pandemic.
Agriculture, Forestry, and Fishing was the only major sector which grew by 1.5 percent.
Even with a 6.3 percent decline, the region still had the second-highest real per capita GRDP among the 17 regions. The GRDP value accounted for each person in the region is described by per capita GRDP, which decreased to P163,952 in 2020.
With the recorded decline in Northern Mindanao’s GRDP, all major expenditure items recorded declines in 2020 except Government Final Consumption Expenditure (GFCE), which increased by 13.0 percent, which was the fastest increase in government spending since 2019 among regions.
Structure of the Regional Economy
The economy of the region is predominantly Services-based. Services accounted for 53.1 percent of the total regional economy, followed by Industry accounting for 25.2 percent, and Agriculture, forestry, and fishing (AFF) with 21.7 percent share. AFF and Industry increased their shares to the regional economy in 2020 while Services had a decreased share.
Household Final Consumption Expenditure shared the bulk of the total regional expenditure
Looking at the shares of expenditures, household final consumption expenditure had the biggest share to the total expenditure at 54.7 percent, with government final consumption expenditure contributing the least share of 12.9 percent.
Region X ranked second among the 17 regions in terms of share of spending in Gross Fixed Capital Formation in Breeding Stocks and Orchard Development at 10.3 percent amounting to P40.1 billion. Moreover, the region ranked second in terms of share of spending in Valuables reaching P 0.16 billion, which constituted 22.5 percent of the total national spending in Valuables.
Net Exports to the Rest of the Philippines as the top positive contributor to GRDE growth
The main drivers of economic growth on the expenditure side are the Net exports to the rest of the Philippines and Government Final Consumption Expenditure (GFCE).
Gross Capital Formation as the top negative contributor to GRDE decline
On the other hand, expenditures that contributed most to the contraction of the region’s economy were: Gross Capital Formation with a contribution of -4.5 percentage points and household spending with -4.1 percentage points.
Real per capita HFCE
Real per capita HFCE, which is the amount of household spending per person, decreased by 8.5 percent in 2020. The real per capita HFCE in the region was recorded at P 89,612 in 2020, lower by 24.5 percent from the national level real per capita HFCE of P118,723.
The Gross Regional Domestic Expenditure (GRDE) measures the economic performance of a region from the perspective of the expenditures of residents of the region. This represents the final value of goods and services produced in the region during the reference period. It is defined as the expenditure of residents of the region in the domestic territory plus their expenditures in other regions, including the rest of the world.
The main drivers of the region’s economic contraction were: Construction (-21.7 percent); Wholesale and Retail Trade, Repair of Motor Vehicles and Motorcycles (-5.7 percent), and Transportation and Storage (39.5 percent).
Services had the fastest decline of -9.0 percent among the major industries. Among the industries under Services, Accommodation and Food Service had the biggest decline (-49.6 percent), followed by Transportation and Storage (-39.5 percent), and Real Estate and Ownership of Dwelling (-14.4 percent).
The Industry declined by 1.9 percent with Construction recording the fastest decline (-21.7 percent).
Among the industries, the three biggest industries in 2020 were the following: Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles with a decreased share of 26.8 percent, followed by Agriculture, Forestry, and Fishing (+21.7 percent share), and Manufacturing (+13.0 percent share).
In terms of the percentage share to the Philippine economy, Northern Mindanao had the seventh biggest share of the Philippine economy at 4.7 percent. Moreover, Region X contributed -0.2 percentage points to the Philippine economic decline of 9.6 percent in 2020, making it the ninth biggest contributor to the GDP decline. (JANITH C. AVES, CE, DM, Chief Statistical Specialist, Officer-in-Charge, PSA-10)