COVID batters WV economy to lowest level since 2017

As expected, the COVID-19 pandemic took a heavy toll on the economic performance of Western Visayas in 2020.

But data from the Philippines Statistics Authority (PSA) in Region 6 indicated a rather resilient agriculture sector.

After a consistent growth rates since 2016, the region’s economy plunged in 2020 with a -9.7 percent contraction, the region’s lowest since 2017, according to the Philippines Statistics Authority in Region 6 (PSA).

In his presentation during a virtual press conference on Thursday, PSA-6 Regional Director Fred Sollesta noted that from a 6.3 percent growth and P915.3 billion gross regional domestic product (GRDP) in 2019, the region’s GRDP decreased to P825.4 billion in 2020.

The services sector, which accounted for the region’s economic performance, suffered a huge blow with a -8.8 contraction while the industry sector decelerated to -1.9 percent.

Only the agriculture sector posted a 1.1 percent growth in 2020.

Among the main drivers for the decline are the sectors of accommodation and food service activities which suffered the largest contraction at -59.4 % followed by other services sector (-55.6%), transportation and storage (-39.1%), construction (-18%), human health and social work activities (-16.3%), and real estate and ownership of dwellings (-13.3).

Meylene Rosales, OIC regional director of the National Economic and Development Authority (NEDA) 6 said the prolonged community quarantine resulted to a significant blow in the services and the industry sector in the region.

According to Rosales, establishments in the services sector particularly in transport, accommodation, and entertainment suffered from adverse impact due to the lockdowns and other consequences of the Covid-19 pandemic.

In 2020, Rosales noted that 204 establishments in the region have completely shutdown affecting 2,112 employers. This is 140% higher compared to only 85 establishments who closed down in 2019.

Meanwhile, 1,013 establishments retrenched their workers resulting to 9,422 displaced workers in the region in 2020.

“What started as a health emergency has turned into a full-blown socio-economic crisis that unfortunately disrupted the region’s growth trajectory. From consistent growth since 2016 to 2019, the region’s economy slumped in 2020,” Rosales said.

The pandemic also affected household spending which is also one of the main drivers of the regional economy.

Western Visayas’ household spending or Household final consumption expenditure (HFCE) contracted by 8.5 percent in 2020 from a 5.4 percent growth in 2019.

The contraction was also observed in gross capital formation, (-28%); exports of goods and services, (-38.8%) and import of goods and services, (-17.5%).

Despite the huge contraction in the overall economy of Region 6, the agriculture, forestry, and fishing (AFF) sector managed to post a remarkable growth amid the pandemic.

Amid community restrictions and border controls, the AFF which accounted 19.9 percent of the region’s economy grew by 6.2 percent in 2020.

Among the regions, Western Visayas has the biggest annual growth of agriculture production, PSA 6 furthered.

For one, palay production increased by 10% with almost 2.8 million metric tons produced in 2020.

According to Rosales, the agriculture’s positive performance in the middle of the pandemic should be a signal for the government to focus on the said sector and provide more resources.

“This signals to the government t to provide more resources to the agriculture sector. It is now high time that we take a look at our agriculture sector. Although this is not to say that we have not been paying attention to the agriculture sector but what is needed is to add more considering that it has been our saving grace amid this pandemic,” she added.

Rosales said that the recovery program on Covid-19 of the agriculture sector had laid down interventions to help the farmers cope with the effects of the pandemic.

Among the measures include the promotion of commodity diversification to increase production; enhancement the skills of farmers and fisherfolks; linking of farmers to supply the government feeding program; and promotion of urban agriculture.

Due to its sluggish performance in 2020, Western Visayas failed to secure its fourth spot as the largest economy among regions outside of NCR (National Capital Region) and is now on the fifth spot.

Based on the growth rate, the region ranked 11th among the regions in the country.

The economic performance of the region is measured from the perspective of producers of goods and services through the GRDP and the expenditures of the residents of the region using the gross regional domestic expenditure (GRDE). (ERS)