CV economic slump felt in last quarter of 2008, says NEDA

CEBU, Philippines - Major industries in Central Visayas such as the construction, retail, transportation and agriculture started to lose their growth momentum in the last quarter of 2008, said a Regional Economic Situationer of the National Economic Development Authority 7.

NEDA 7 Assistant Director Efren Carreon presented the economic situationer during the Regional Development Council full council meeting at the Bohol Tropics Resort in Tagbilaran City last Friday.

The report said preliminary indicators suggested that Central Visayas was not at all spared from the adverse impact brought about by the global economic crisis.

For example, the construction industry, a major contributor of economic growth in Central Visayas in 2007, suffered losses after investors decided to scale down or even postpone implementation of projects until the economy would recover.  

In real estate, only big developers with enough capital to support their projects proceeded with construction activities. Smaller ones had to rely on their initial investments from property buyers, down-scaled or even postponed their projects, NEDA said.

Meanwhile, records from the Home Development and Mutual Fund show that fewer members availed of housing loans in the fourth quarter of 2008.

HDMF financed only 1,020 housing units or a short of about 534 housing units during this period and the bulk of housing loans had a maximum of only P750,000. Big ticket projects costing more than P2 million also slowed down.

The retail industry in the region also suffered a slump after it failed to surpass its performance in the fourth quarter of 2007, despite the strong performance of the tourism industry.

The same was experienced by the transportation industry owing to the lower demand for cargo shipping services due to declining exports. The aviation industry was no better, as it did not improve since the third quarter of 2008.

In the third quarter of 2008, Cebu Pacific already cancelled direct flights to Bangkok, Taipei and Macao because of limited number of passengers. The volume of domestic and foreign cargos carried via air also dropped by 6.5 percent and 23.1 percent, respectively.

The shipping sector also rendered a “poor performance” in the last quarter of 2008 with the suspension in the operations of Sulpicio Lines vessels aggravating the “already weak shipping industry.”

On the brighter side, NEDA said the agriculture and power sectors displayed a “better performance” in the last quarter of 2008. All agricultural sub-sectors, excluding poultry, yielded aggregate volume of agricultural productions compared to the previous years. Production during this period reportedly exceeded that of the fourth quarter of 2007 by 6.9 percent.

The stable prices of fuel also helped improve consumer spending and was used by consumers as “determinant” of the general economic situation. — Garry B. Lao/JMO (THE FREEMAN)