Mixed economic trends

If we are to take into account key economic indicators, 2006 featured mixed trends. Palay production did not fare well when it increased by 5.3 percent in 2006 compared to the 9.3 percent increase in 2005. Copra did better by maintaining practically the same level of production. Fish production increased but at a slower 12.9 percent in 2006 compared to 20.1 percent in 2005. Abaca production declined from a growth of 6.3 percent in 2005 to a reduction in production by 11.1 percent.

The effect of the typhoons on palay production was significantly felt and the effect of diseases on abaca production is not slowing down. It will take several years for affected abaca areas to replant again and be productive while affected areas continue to increase.

The flow of people and goods improved significantly with airline passengers increasing by 14.1 percent.

Despite the negative trends, the positive ones appear to have greater effect as employment rose from 91.4 percent to 95.6 percent. Consequently, unemployment went down from 8.6 to 4.4 percent.

The data suggest that overall the region was better off in 2006 than in 2005, despite the typhoons (the positives outnumber the negatives, although year to year growth could show a slight slowing down in 2006). Will 2007 be better?

A lot depends on how far we can recover the lost production resulting from the typhoons. If the effects spill over into mid-2007, then our economic growth will go down. However, if we can recover fast and harvests in palay and coconut go up, then it is going to be a better year.

There was a slight shift in job generation from agriculture to industry and services. This means that the impact of the decline in agricultural production will be recovered by increased production in industry and services as the economy gradually shifts to one that is less dependent on agricultural production. However, agribusiness enterprises will continue to grow. This trend is expected to hold this year and onwards.

Productivity per unit of labor is usually higher in industry services due to automation and recourse to efficient technology.

These are mixed trends but these should make us feel optimistic.