True enough, our earnest prayers were heard.
The region’s economic landscape showed a big leap from a very disheartening setback to an impressive performance in 2021. This was due to the relentless efforts of the Ilocanos and Pangasinenses who remained steadfast despite the uncertainties.
To our friends from the Philippine Statistics Authority, Asst. National Statistician Wilma Guillen, Regional Director Sheila de Guzman, to our partners in development, my colleagues in government service, to the private sector organizations, to our media partners, friends, ladies and gentlemen, a pleasant morning to each and everyone.
At the height of the Covid-19 pandemic, we were all skeptical as to whether or not we should continue with the localized lockdowns at the same time negotiating for a whole-of-a-nation vaccination program just so to protect our people from contracting the virus or to finally open certain sectors of our economy in order for people to get to work and feed their families?
I think the answer to this question seems to be very clear to us now – that we can always strike a balance between adhering to IATF-health protocols and pushing for an economic upturn. When we have finally decided to slowly open our economy, we came to the conclusion that with the right tools, our persistence and an expanded vaccination program – we can make things happen.
Today, it is my pleasure to share with you the story of our triumph as a region. Yes, we may not be among the top performers in 2021, but I am certain that our gains and our ability to bounce back are something that we remain to be very proud of.
Overall Economic Performance
Certainly, the reopening of the region’s economy aided Region 1’s recovery from 7.7 percent contraction in 2020 to a 4.6 percent growth in 2021. This can be attributed also to lifting of lockdowns, continued and easier flow of goods and services, and resumption of various economic activities where job opportunities became more available.
The economic output of Services and Industry remarkably bounced back from negative performance in 2021. The growth is brought by the increase in household consumption expenditures which accounted for 98.3 percent of the region’s gross domestic expenditure in 2021. Moreover, the re-opening of establishments due to lower quarantine restrictions led to a higher annual employment rate at 92.1 percent from 86.56 percent in 2020. With the improved employment status in the region, along with the continued provision of fiscal stimulus by the government, the people were given financial viability to contribute to our region’s economic recovery through spending. However, as we worked towards reopening our economy, an inevitable calamity struck our region. In October 2021, typhoon Maring caused much damage which magnified the reversal in the growth in the Agriculture sector. Nevertheless, the positive overall economic performance of our region is a good indication that we are back on track to achieving our vision for a matatag, maginhawa, at panatag na buhay para sa lahat.
We were able to accelerate the performance of our region’s Industry amid our struggle from the devastating economic performance in 2020.
Construction remained to be the driver of the Industry sector as the Gross Fixed Capital Formation for Construction posted a positive 16.4 growth in 2021. Under public construction, the Department of Public Works and Highways implemented at least 30 road widening projects regionwide and constructed 17 by-pass roads, eight diversion roads, and 60 access roads in 2021. The completion of the construction and improvement of 16 access roads leading to trade, industry, and economic zones is vital with the increased commodity flow due to lower mobility restrictions. As we reopened our region to tourists and visitors, the 57 completed roads leading to tourism sites in 2021 made our region more accessible to them. Private construction also boosted in 2021 as the number of approved building permits and total floor area escalated based on PSA data as of 3rd quarter 2021. With this performance, we regained our region’s momentum of accelerating infrastructure development to stimulate and support socio-economic growth.
The strong rebound of the Construction industry also resulted in a sturdier Mining and Quarrying industry. The higher demand for construction materials led to a higher production of non-metallic minerals in our region such as limestone, calcareous sandstone, and silica. Relatedly, cement production increased to cater to the demand in the construction industry.
On the other hand, the dynamism of the Manufacturing industry was back as the region moved to a low-risk level which resulted in more production hours for manufacturing establishments. In 2021 , the DTI recorded increase on investment on food processing
firms making the region’s manufacturing industry stronger. With the various programs to support manufacturing firms such as the DOST’s Small Enterprise Technology Upgrading Program, we are looking forward to continued improvement of the industry’s productivity and efficiency.
Services remained as the major contributor to economic growth in our region and provider of economic opportunities to our people through trabaho and negosyo.
As the tourism industry bounced back into the new normal, accommodation and food service activities also bounced back. As the DOT launched its Tourism Recovery Plan, the tourism industry in the region was rebooted focusing on promoting more outdoor sites and activities, taking advantage of the abundant nature sites to attract more visitors. Though the COVID-19 pandemic slowed down our performance in 2020, it did not take away the tourism industry’s potential to realize the region’s vision of becoming the tourism hub in the Northern Philippines. All that we need is to take advantage of these potentials to make ways toward recovery.
COVID-19 showed the synergy between the health system and the economy, thus creating awareness of the importance of health investment both by the government and households. The accelerated growth of Human Health and Social Work Activities could be attributed to the intensified health programs of the government such as the rollout of the COVID-19 Vaccination Program. The target vaccinated individual is 80 percent or 4.3 million of the total population in Region 1 regardless of age. In 2021, the DOH Center for Health Development 1 exceeded its committed COVID-19 vaccination program target for the year. The DOH also continued its Human Resources for Health Deployment Program to Local Government Units hiring more health workers in 2021. The 2021 Family Income and Expenditure Survey of the PSA also recorded an increase in the percentage share of health expenditures to total family expenditure showing that as we give importance to our health, we are also contributing to the economic growth of our region.
Another good news is the positive growth of Education in 2021. The Department of Education posted an increase in the Basic Education enrollment in School Year 2021-2022, specifically for the Junior and Senior High School, as students who skipped the 2020-2021 school year returned to school. This could also be possibly due to more flexible learning modalities offered. With the implementation of the Basic Learning Continuity Plan, we are confident that the region’s target of transforming the region’s most
valuable resource, the human resource, toward greater agility will continue until the next generation.
On the other hand, Financial and Insurance Activities still posted a positive growth though at a slower pace in 2021. As early as the 3rd Quarter of 2021, the Bangko Sentral ng Pilipinas already recorded an increase of 6.9 percent in the total deposit liabilities of banking institutions in the region compared to the total annual deposit liabilities generated in 2020 indicating the availability of funds for investment capital formation amid the slowdown of foreign direct investment flow due to COVID-19 pandemic. Likewise, as the COVID-19 pandemic clearly defined the presence of risks particularly to health, people became more aware of the benefits of life insurance. Based on the 2021 FIES, the percent share of insurance in the total family expenditure increased indicating people’s increased awareness of the importance of financial investments.
Challenged Agriculture Resiliency
The resiliency of the region’s Agriculture sector remained to be challenged as it suffered a reversal of growth. Based on the report of the NDRRMC, a total of 2.6 billion pesos worth of agricultural production in the region were lost due to Severe Tropical Storm Maring. To assist the farmers with the ill effects of this calamity, the government through the Department of Agriculture assisted farmers through financial grants, farm inputs, and emergency loan assistance.
Another factor that contributed to the decline of AFF outputs is the African Swine Fever which affected the livestock industry. The hog production in our region decreased by 37.5 percent in 2021. To prevent further damage to livestock production due to ASF, the DA formulated guidelines for the “Bantay ASF sa Barangay Program” which were adopted by the Local Government Units.
Region’s Outlook and Prospects
As we gear towards economic recovery, we now face the twin crisis of the Covid19 pandemic and the Ukraine-Russia tension which brought added pressure on higher global oil and commodity prices. This pressure is already being felt as inflation rates in the region surged to 4.6 percent in March 2022. Nevertheless, the government is looking into safety nets to help our people cope with rising fuel and production costs such as the provision of fuel subsidies and discount vouchers to public transportation drivers, farmers, and fisherfolks.
Amidst the pressing external challenges, we are still confident that the region’s economy will post a positive growth in 2022 which will be driven by domestic demand as we fine-tune towards looser restrictions and expanded reopening of our economy. The improved region’s labor participation rate and employment rate at 62.0 and 92.8
percent, respectively, in January 2022 is a good indication of a more active labor force contributing to the economic growth of our region.
We are also certain that the construction industry will continue to fuel economic growth in the region. We are happy to note that the construction of the 22.19 kilometer Bauang-San Fernando-San Juan Bypass Road in La Union is on track. For the year 2022, the DPWH is undertaking the road opening of the Bauang section, as well as the construction of the Bauang Bypass Bridge. Once completed, this will provide an alternate route that will address critical traffic concerns in urban areas and will establish an improved national road system that is vital for the fast delivery of goods and services.
Meanwhile, we need to work on the resilience of our micro, small, and medium-sized enterprises (MSMEs) which play a vital role in our region’s target of expanding economic opportunities in industry and services through trabaho and negosyo. We need to strengthen the implementation of government programs such as the Shared Service Facilities of MSMEs by the DTI and the SET-UP of the DOST to boost business innovation and skills development. Likewise, as the government allowed public transportation to operate at full capacity and opened the region to domestic and fully vaccinated international travelers, we are looking forward to a more robust tourism sector in 2022, especially with the new tourist attractions and activities laid down in our region’s Tourism Recovery Plan.
With the vaccination of children aged 5 years old and above, we are more confident that the education sector will perform much better and record higher enrollment at all levels. We are hoping that the conduct of pilot face-to-face classes will be successful so that by School Year 2022-2023, our learners will be able to embrace face-to-face classes under the new better normal.
We also look forward to a sustained positive economic output for health as we continue to improve our health care facilities through the Health Facilities Enhancement Program (HFEP).
Let us also continue to work on the resiliency of our agriculture and fishery sector. We believe that with the implementation of various development programs and projects such as the Philippine Rural Development Project, the Sustainable Tobacco Enhancement Program, and the Bantay ASF Program, the capacity of our farmers and fisherfolks will be upgraded. Such will lead to better productivity that contributes not only to economic growth but also to food security.
Likewise, with the formulation of the rehabilitation and recovery plan (RRP) for severe typhoon Maring which devastated the agriculture sector, we are confident that we will be able to restore the socio-economic and living conditions of the people and improve the resilience of the communities. Said plan was approved and adopted on March 11, 2022 thru RDRMMC-1 Resolution No. 1, s. 2022, anchored on the principle of “Build, Back,
Better.” This will serve as reference in ensuring the implementation of the priority programs, projects, and activities (PPAs) for Fiscal Year (FY) 2022 and their inclusion in the FY 2023 budget proposals of the concerned agencies.
Furthermore, I know that with the 10-point Policy Agenda to Accelerate and Sustain Economic Recovery that was adopted through Executive Order No. 166 s. 2022 signed on the 21st day of March 2022, we will be able to sustain our economic recovery from the pandemic.
But I think, despite the good economic performance we had in 2021, we should not be complacent. The threat of the COVID-19 virus remains to be a threat even to this day. Let us continue to support the COVID-19 vaccination program of the DOH so we could finally reach our target herd immunity. As of 20 March 2022, Region 1 was at 2nd place nationwide with the highest vaccination coverage next to NCR. The region recorded 79 percent coverage for fully vaccinated individuals and 85 percent coverage for individuals with at least one dose.
The concept of Covid-19 superspreading is back in the spotlight as other countries seem to experience sudden outbreaks. However, I am confident that we are now able to manage it with the use of tools now available to limit the risks – our continuing vaccination program will surely spell the difference.
Let us continue to work together in increasing our region’s accomplishments on the COVID-19 vaccination program. Let us not put our guards down and continue to strictly adhere to the health protocols.
Again, thank you to everyone. This will not be made possible without our concerted efforts as one region, as one people.
Naimbag a bigat ken Dios ti agngina.