More 2011 business highlights

As tradition dictates, we always end the year with an assessment of how major industries and government agencies performed for the year. Last week, we wrote about the BPO industry, the Board of Investments, the Philippine Economic Zone Authority and the country’s flour millers.

We were able to get some inputs from the Department of Agriculture’s Asst. Secretary Edilberto de Luna on how their agency performed. This is one agency that most of us are keenly watching, given the tall order that the Secretary himself, Proceso Alcala, has given himself and his department which is to make the country self-sufficient in rice in five years’ time. Well, the good news is rice and corn production grew by 16 percent for the year. For rice for instance, for the first nine months our production reached 10.75 million metric tons, while corn production reached 5.5 million MT.

The average price of corn however went up for 2011, from P13.50 to P15.50/k, to the detriment of the livestock industry where corn accounts for 50 percent of their production cost, but of course favoring the country’s corn farmers.

Overall livestock production likewise grew by 15.8 percent, with the poultry section accounting for a four percent growth. The only downside is the fisheries section which had a negative growth of four percent.

The over-all growth of the agriculture sector, compared to the same period last year, is 4.7 percent and it is important to note that this growth is in spite of the non-provision of the usual subsidies by way of seeds, fertilizers, etc. by the government to the farmers. In place of this, the DA has intensified its training program, providing technological support, and has facilitated credit for the farmers as well. The department has likewise improved the post-harvest facilities in some areas especially in the rice-producing regions.

It looks like the Secretary can make good on his promise of rice-sufficiency in 2016.

The country’s real estate developers and builders are also very upbeat, as shared with us by the Chamber of Real Estate & Builders Association’s (CREBA) Charlie Gorayeb, National President of the association. The biggest leap of course was registered by the residential sector, followed by the commercial sector. And as to be expected, the industrial sector lagged behind dismally again for 2011.

This has always been true for the industrial sector, at least in the last decade or so. When China started their industrial revolution several years back, they invited big industrialists, ours included, to build factories in China, virtually on free lease for the first few years. Several of our big businessmen, especially the Filipino-Chinese went to China and grabbed the opportunity, and all of them have reaped windfalls.

Anyway, CREBA is now kept busy with administrative matters, studying modes of compliance with new laws such as Republic Act 7279 which requires all big ticket developers to set aside 20 percent of either their total area or projected cost for socialized housing development. Vice President Jojo Binay reportedly is serious about having these units produced quickly enough to address the housing shortage in the country. The VP has successfully done away with the “spare tire” image, choosing to focus on an area where tangible results can be seen and felt by the marginalized members of our society.

Prices of real estate have increased tremendously since 1997, and mostly the prices were driven by jacked up construction costs and hefty taxes. Still, the real estate industry has been on an upswing in the last few years, with new developers joining the fray. Well, people are still buying, which means to say that we still have the purchasing power.

It is interesting to note that the National Association of Realtors of the US invited CREBA recently to Anaheim, California to join NAR as a cooperating association, which means that CREBA will carry the NAR brand as realtor exclusively in the Philippines. This is a singular achievement for the country’s premier realtors’ and builders’ organization. NAR has reported declared CREBA as the second biggest realtors’ association outside of the USA, second to Mexico. They also gave the association a $20,000 bonus to be used for CREBA’s educational programs in the Philippines.

For 2012, the country’s realtors are all set to submit their position paper on the government’s plan to increase (again!) realty taxes, and address certain persistent issues with the Land Registration Authority. Way to go CREBA.

And capping the 2011 year ender is the National Economic Development Authority (NEDA) of course with their year-end report on the country’s economic performance for the year.

NEDA Chair Cayetano Paderanga invited some members of media for his year-end assessment, and here are some excerpts we got from him. Over-all, the Philippine economy grew by 3.6 percent iin the first three quarters, lower than the 8.2 percent in the same period last year. Compared to our neighbors in the region, Indonesia, China, Singapore, Vietnam and Malaysia, this growth was in the lower range. He admits that the global economic slowdown, the continuing weakness in the US economy and the twin disasters in Japan have contributed much to this pale performance. In the local front, growth was weakened by the construction sector, he said, mostly due to low government spending. The industry sector decelerated by 1.4 percent because of the decline in construction which has weighed down the sector’s growth.

The government’s under-spending has also affected the export sector which saw a decline of 3.7 percent in total exports. This was also further aggravated by our currency appreciation.

Per NSO labor survey, however, more jobs were made available to Filipinos, and the government has made good on its promise to create at least one million jobs.

For budget purposes, the Philippine government projects the GDP growth to remain between 4.5 to 5.5 percent for 2011, and between five to six percent for 2012. According to the NEDA Secretary, “we will also experience the full implementation of the P72 billion disbursement acceleration program of the government in the coming year. As of November 2011, the government has released P43.3 billion or 60.2 percent of the total program cost.” They have also identified measures to boost export which include diversification of export products, integration with other faster-growing Asean economies, and more concrete programs for export promotions.

Mabuhay!!! Be proud to be a Filipino.

For comments: (email address) [email protected]