AN ECONOMIC PUZZLE: INTER-RELATING INDICATORS

In today's column, I will try to solve a puzzle.

In two of these columns last month, I mentioned some economic indicators which show a fair performance of the regional economy. I also hinted that the business sector is optimistic things will get better next year.

In today's column, I will mention indicators which when analyzed in conjunction with other indicators I cited earlier seem to show that, indeed, there are external factors helping our economy grow.

Let me point out cargo traffic which improved by 6.4 percent when comparing third quarter 2002 and third quarter 2003 figures.

A significant increase was experienced by our ports servicing foreign vessels – with a growth rate of 121.2 percent.

Vessel traffic also increased – by a high 15.3 percent, clearly indicating increased trade between Eastern Visayas and other regions in the Philippines and foreign countries.

Passenger traffic in our seaports also increased by 7.7 percent.

On the bleak side, let us look at employment. The news are not good. Employment declined from 91.2 to 88.7 percent.

When the above indicators are analyzed in conjunction with the 3.9 percent increase in palay production and the 2.8 percent increase in copra production, we wonder what the relationships are.

Are we experiencing growth with less job creation?

Moreover, there has been a significant increase in business name registration – 77.7 percent.

The puzzle emerges.

The decline in employment must be the effect of the use of machines in lieu of farm labor and the decline in area harvested due to the effect of the weather disturbances.

Again, it looks like money from abroad (we do not have regional data on this, unfortunately) must be propping up the region's economy.

Also, our ability to reduce palay imports due to the increase in palay production and to expand our exports due to increased copra production are helping keep the economy fair and progressing.

Many of the above are factors external to our economy. These are situations in the world market favorable to our goods and services.

Employment may be down but the harvest is still good. World demand is on the upswing, and our copra exports increase. Remittances from overseas workers keep coming (our national statistics reveal this). Therefore, the economy remains fair.

The puzzle is solved when the indicators are interrelated.

Solving economic puzzles can be done by looking at interrelationships.