Western Visayas’ ‘missing middle’: more food, not enough factories

ILOILO CITY — Western Visayas must expand its processing and manufacturing industries to get more value from its agricultural output and sustain economic growth, an official of the Department of Economy, Planning, and Development (DepDev) said Friday.

DepDev Undersecretary Carlos Abad Santos said the region’s strong services sector and its agriculture, forestry, and fishing sector have yet to be matched by sufficient industrial development, limiting opportunities to generate higher-value economic activities and better-paying jobs.

“The region already has many of the assets. Our challenge is to connect these strengths, create more value, and build the industries that will drive the next stage of growth,” he said during an economic and investment briefing Friday, Nov. 6.

DepDev was formed in 2025 through the reorganization of the National Economic and Development Authority under Republic Act 12145.

While the regional economy grew 6.4% in 2025, the fastest among the country’s 18 regions, Abad Santos said its industry sector remained relatively underdeveloped, with a location quotient of 0.66.

The figure means industry’s share of the regional economy is only 66% of its share in the national economy.

The Philippine Statistics Authority valued the region’s economy at PHP 683.44 billion in 2025, making Western Visayas the country’s eighth-largest regional economy with a 2.9% share of gross domestic product.

The region’s growth outpaced the national rate of 4.4% for the same year.

Services accounted for 4.2 percentage points of the region’s 6.4% growth, while agriculture contributed 1.4 percentage points and industry only 0.8 percentage points.

“In simple terms, we produce a lot of food. We have a growing services economy, but we are not doing enough processing and manufacturing within the region,” he said.

He noted that underemployment in the region stood at 17.2% in 2025, underscoring the need to expand economic activities that can generate more productive employment.

He described processing and manufacturing as the “missing middle” in the region’s economic structure.

“This is the missing middle that we need to build: more processing, more manufacturing, and more value-adding activities that ultimately lead to better jobs,” he said.

He warned that the region’s growth faces near-term pressures, with inflation reaching 9.7% in October, driven largely by transport and energy costs that also raise the expense of moving goods and operating businesses.

“2026 has tested and continues to test the region’s growth momentum. But the medium-term prospects remain encouraging,” he said.

Abad Santos identified four areas where Western Visayas could build higher-value industries: agrifood manufacturing, digital and knowledge services, renewable energy, and tourism-related enterprises.

Iloilo’s services economy, for instance, could expand into information technology and business process management, health information management, and creative industries, he said.

The region’s wind, solar, and biomass resources could support renewable energy and related industries while providing more competitively priced electricity for businesses.

Its heritage and food culture could also strengthen tourism, events, and gastronomy as part of a broader experience economy.

Abad Santos said the region should develop industries based on the distinct economic strengths of each province rather than adopt a uniform development strategy.

Western Visayas comprises the provinces of Aklan, Antique, Capiz, Guimaras, and Iloilo, as well as the highly urbanized Iloilo City.

To improve the movement of people and goods, he cited major connectivity projects, including the Panay-Guimaras-Negros Interisland Link Bridge, the Iloilo-Capiz-Aklan Expressway, and the proposed revival of the Panay Railway.

The Department of Public Works and Highways in Western Visayas said in March that construction of the bridge’s Panay-Guimaras section is expected to start in the fourth quarter of 2027, more than a year later than the July 2026 target announced earlier.

The expressway is planned to run from Leganes, Iloilo, to Malay, Aklan, and is among the national government’s priority public-private partnership projects.

The Panay Railway stopped operating in the 1980s.

He said these investments, alongside renewable energy expansion and digital and knowledge services, could provide additional growth opportunities.

“These are not entirely new industries being introduced into the region. There are opportunities to move existing strengths into higher-value activities,” Abad Santos said.