2020 Economic Indicators and 2021 Outlook
The economy of Central Visayas, the 4th largest economy of the country, grew at a rate of 5.9 percent in 2019 and contributed to 6.5% to the country’s national gross domestic product of the same year. This growth is mainly driven by the business process outsourcing (BPO), tourism, retail and trade, real estate, and construction industries as the main growth drivers.
However, the region’s economy slowed down due to the COVID-19 pandemic. Unemployment rate in Central Visayas went up to 16.7% in April but this started to go down to 11.7% in July and 9.9% in October. This yields an average unemployment rate for the region of 10.4% for the three quarters of 2020, about twice the rate in 2019.
Wholesale and retail experienced the sharpest decline in employement caused by the lockdown.The tourism industry is also one of the hardest hit during the pandemic where accommodation, food services, transport partly belong to.
The total number of construction in the second quarter of 2020 declined to 2,347, about 54% lower compared to the 5,072 constructions in the same period in 2019 . The total value of construction decreased in the 2020 second quarter to 3.26 billion pesos, almost 80% lower compared to the second quarter 2019 construction worth 15.87 billion pesos. Non-essential construction is prohibited during the ECQ.
The BPO industry continued to stay afloat in 2020. As of September 2019, there were 3,654 IT enterprises in the Ecozones in Region 7. Despite the pandemic, this increased by 95 enterprises to 3,749 as of August 2020. Cebu City continues to be named as one of Tholons Top 100 outsourcing destinations in the world ranking 7th in 2016, 12th in 2017, 11th in 2018, 12th in 2019, and 15th in 2020.
Central Visayas’ inflation rate remains stable at 1.9% in 2020, increasing by only 0.3 percentage points from its 2019 average of 1.6%. In terms of power consumption, industrial consumption dropped by almost 90 million kwh between the period February to April 2020 but started gaining back to its normal consumption from May to September 2020, with the easing of quarantine restrictions on business operations. Commercial power consumption, on the other hand, was slightly affected with less than 20-million kwh decrease from the 2019 period, while residential power consumption increased from March to September 2020. Petroleum product consumption dropped in the period March to April 2020 but started to recover from May to September 2020 with the resumption of most business operations.
Despite the downturn in the regional economy in 2020, the Bayanihan to Heal as One Act (R.A. No. 11469), the Bayanihan II Act (R.A. 11519), and the Central Visayas COVID-19 Regional Recovery Program (RRP) provide a brighter outlook for 2021. The extension of Bayanihan II to June 30, 2021 and the GAA 2020 budget to December 31, 2021 will allow 195.3 billion pesos more government spending in 2021. With the continuous calibrated reopening of businesses, mass transportation, and the relaxation of age group restrictions, more economic activities are expected in the next months while waiting for the vaccine roll out. The updated Philippine Development Plan 2017-2022 estimates that the economy will grow by 6.5% – 7.5% in 2021-2022.