NEDA-7: Consumer demand needs to rise to improve economy
CEBU CITY, Philippines — The National Economic and Development Authority in Central Visayas (NEDA-7) said that in order to boost economic revival the consumer demand would need to rise.
In their report to the Regional Development Council in Central Visayas (RDC-7), NEDA-7 said that the region saw an improvement on the economy in the last quarter of 2020.
Maria Teresa Alambra of NEDA-7 said that fourth quarter was marked with economic recovery as businesses reopened, but the present demand was still “weighing heavily” on many sectors constraining increased growth.
The inflation rate has gone down from 1.3 percent in the second quarter to 0.9 percent in the last quarter of 2020, with a yearly average of 1.9 percent. The inflation rate in the last quarter was lowest in the entire year.
The inflation average of 2020 is 0.3 percent higher than in 2019, which was at 1.6 percent inflation average.
For commodity inflation, alcoholic beverages and tobacco, house furnishing and maintenance, and food including non-alcoholic beverages all dipped below the 4 percent inflation rate, which is the low end target of the government before the end of 2020.
Among food, vegetables saw the highest inflation at 10.4 percent followed by fruits and fish, while meat remained fairly below 1 percent by the end of 2020.
Among the provinces, Siquijor saw the highest inflation rate average at 2.9 percent for 2020 while Negros Oriental had the lowest inflation rate average at 1.7 percent.
As for crop and fisheries production, palay, corn, fruits and fisheries slightly increased in 2020 compared to 2019. Industrial and commercial products increased by 25.1 thousand metric tons (MT) in 2020 than in 2019, while vegetable production decreased by 0.9 thousand MT in 2020.
Among livestock production, hogs remain to be the highest producing industry with 192.8 thousand MT of hog produced in 2020, a slight increase in the 192.7 thousand MT production in 2019.
Carabao and cattle production decreased slightly, but goat production increased by 0.04 thousand MT in 2020.
Poultry production in 2020 dropped in the second and third quarter but regained momentum in the fourth quarter. Still, the total poultry production in 2020 is 109.3 thousand MT.
Eggs increased production in 2020 garnering a total of 55.50 thousand MT as compared to the 54.2 production in 2019.
The region also saw a decrease in the electrical consumption from households and establishments in general. Although by the end of the quarter, the establishment’s electrical consumption increased with the opening of businesses.
Aviation and shipping servicers saw major drops of passengers, flights or trips, and cargo in the second and third quarter of the year, but began to see increase in the fourth quarter.
NEDA-7 noticed a decrease in performance in the industry by 60 to 70 percent in 2020 due to the pandemic, but a rise in barter trade.
Still, the agency expects an improving economy with Business Outsource Processing (BPO) garnering more clients or accounts with the increasingly flexible and favorable environment and the reduction of the need for office spaces.
In 2020, the region saw a total of P19.964 million of investements poured in despite the pandemic most of which were from Filipino investors and less from foreigners.
The challenge, said NEDA-7, remained that the unemployment rate in 2020 reached 10.4 percent or double of that in 2019.
This is why the agency believed that if the consumer demand would rise, the businesses would flourish again and in turn unemployment rate would decrease.
“We expect more recoveries from sectors as economic activities intensifies. The BSP’s (Bangko Sentral ng Pilipinas) employment outlook index for Q1 2021 and the next 12 months, affirming the view of a possible increase in the number of employees in the said period,” said Alambra.
While the pandemic is still affecting the industries, preventing it’s full momentum on economic revival, the NEDA-7 is positive that the economy is recovering, albeit slowly but surely.
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