TABLE OF CONTENTS

I. Macroeconomic Performance ...... 1 Inflation ...... 1 Consumer Price Index ...... 1 Purchasing Power of Peso ...... 2 Labor and Employment ...... 2

II. Agriculture, Forestry and Fishery Sector Performance . . . 3 Crops ...... 3 Palay ...... 3 Corn ...... 4 Fruit Crops ...... 5 Vegetables ...... 6 Non-food and Industrial and Commercial Crops . . . . 7 Livestock and Poultry ...... 7 Fishery ...... 7 Forestry ...... 8

III. Trade and Industry Services Sector Performance . . . . 9 Business Name Registration ...... 9 Export ...... 9 Manufacturing ...... 10 Mining ...... 10

IV. Services Sector Performance ...... 12 Financing ...... 12 Tourism ...... 12 Air Transport ...... 13 Sea Transport ...... 13 Land Transport ...... 14

V. Peace and Security ...... 16

VI. Development Prospects ...... 18

MACROECONOMIC PERFORMANCE

Inflation Rate Figure 1. Inflation Rate, Caraga Region Page 1 The region’s inflation further eased down in the second quarter of 2019 compared to its performance on the same period last year (Figure 1). On the average, the region’s inflation rate declined by 0.9 percentage point to settle at 2.4 percent in Q2 this year from 3.3 percent in the same period last year. The region’s inflation rate continued to slow down from 2.6 percent in April 2019 to 2.0 percent in June 2019, a decrease of 0.6 percentage point between those Source: PSA Caraga periods. This was attributed to the slow price increases in the overall price indices over time Figure 2. Inflation Rate by Province on the region’s basic goods and services, particularly food items and education. The implementation of Republic Act No. 10931, which provides free tuition, essentially reduced the cost of education in the region.

At the provincial level, only the provinces of Agusan del Norte and Agusan del Sur have exhibited improved inflation rates in Q2 2019 compared to the same period last year, which decreased by 2.10 and 1.50 percentage points, Source: PSA respectively (Figure 2). Meanwhile, the Province of Dinagat Islands surpassed other and maintenance; health services; provinces on inflation rate, which slightly up by transportation; housing, water, electricity, gas 0.40 percentage point from 5.30 percent in Q2 and other fuels; and other commodity groups. 2018 to 5.70 in Q2 2019. The province of Surigao del Norte also posted a high inflation In particular, the average prices of beverages rate of 4.20 percent in Q2 2019 from 4.10 and tobacco commodity group rose by 17.8 percent relative to its last year’s performance. index points in Q2 2019 compared to last year. The thriving mining industry, booming tourism The cost of housing, water, electricity, gas and industry and high demand for transportation in other fuels climbed by 5.7 index points, while the delivery of goods and services were the furnishings and household equipment and major factors contributing to the high inflation in maintenance increased by 3.6 index points. the two provinces. Meanwhile, Surigao del Sur’s Meanwhile, education pared down by 9.4 index inflation was maintained at 1.90 percent in Q2 points from 110.3 in Q2 2018 to 100.9 in Q2 2019 compared to the same period last year. 2019 as tertiary education students in state

Figure 3. Consumer Price Index, Caraga Region

Consumer Price Index

The region’s average consumer price index (CPI) for all items went up by 2.7 index points to 119.5 in Q2 2019 from 116.8 in Q2 2018 (Figure 3). The rise in the average CPI was mainly attributed to the rising cost in some of the region’s basic commodities as affected by the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, particularly the alcoholic beverages and Source: PSA Caraga tobacco; furnishings and household equipment Page 1 of 18

universities and colleges continue to benefit free Purchasing Power of Peso tuition fees as mandated by Republic Act 10931, otherwise known as the Universal Access to The region’s purchasing power of peso declined Quality Tertiary Education Act. in Q2 2019 at 0.84 centavos or a drop of 2.33 percent from 0.86 centavos in the same period As to provinces, Agusan del Norte and Agusan last year (Figure 5). Throughout the second del Sur exhibited slow increase in the average quarter of 2019, the PPP of the region steadily price indices of basic goods by 1.9 and 1.7 index maintained at 0.84 centavos as inflation waned points, respectively (Figure 4). Both provinces during the period. This implies that a consumer are major producers of agricultural products, of could only buy PhP 84.0 worth of goods for PhP which the prices of rice, corn, bread and cereals 100.0 at 2012 constant prices. The rising prices dropped during the period. Meanwhile, Surigao of basic commodities in the region further del Sur’s average price index posted an increase reduced the amount of goods and services that of 2.4 index points, which mainly attributed to the can be bought by the consumers. upswing in the prices of alcoholic beverages and tobacco commodity group. However, the Figure 5. Purchasing Power of Pesos, Caraga Region province posted the lowest CPI in education with 70.5 compared to the region’s 100.9, which has been ascribed to the presence of Surigao del Sur State University with satellite campuses spread throughout the province.

On the other hand, the Province of Dinagat Islands recorded the highest increase in CPI at 6.5 index points. Aside from high prices on tobacco and alcoholic beverages, the cost in Source: PSA Caraga transportation is high considering that it is an island province, importing mostly of its goods Labor and Employment from the mainland Surigao e.g. agricultural products. In addition, the province cost for The region’s labor force increased by 2.94 education surged at an average of 19.7 index percent to 1.927 Million in Q2 2019 from 1.872 points due to the absence of a state-run tertiary Million in the same period last year (Table 1). education institution, which has been benefiting However, participation rate slightly decreased by the implementation of the free tuition policy of 0.8 percent percentage point, which recorded at the government. 65.3 percent from 66.1 percent in Q2 last year.

Employment rate slightly rose by 0.2 percentage Surigao del Norte’s CPI also rose by 4.9 index point to reach 96.0 percent in Q2 2019, which points due to high prices on food items, resulted in the drop of the unemployment rate to alcoholic beverages and tobacco, and non-food 4.0 percent during period. Meanwhile, the items, such as solid fuels, dental services and region’s underemployment posted a significant secondary education. drop by 10.4 percentage points. Figure 4. Consumer Price Index by Province Table 1. Labor and Employment, Caraga Region Indicator Q2 ‘18 Q2 ‘19 Percent (%) Change Labor Force (in 1.872 1.927 2.94 Million) Labor Force 66.1 65.3 (0.80) Participation Rate Employment Rate 95.8 96.0 0.20 Unemployment Rate 4.2 4.0 (0.20) Underemployment 29.4 19.0 (10.4) Source: PSA Caraga Source: PSA Caraga

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AGRICULTURE, FORESTRY AND FISHERY SECTOR PERFORMANCEBOR AND EMPLOYMENT

Crops Figure 6. Palay Production by Province

Palay

The region’s volume of palay production shrunk by 2.16 percent, generating a total output of 271,230.48 MT in Q2 2019 compared to 277,219.00 MT in the same period last year (Figure 6). Surigao del Sur contributed largely to the decline in the region’s overall palay production with the provincial output dropped by Source: PSA Caraga 14.68 percent during the period. Agusan del Norte also posted lower production output by Figure 7. Palay Area Harvested by Province 1.02 percent from previous year’s produce.

Meanwhile, the other provinces registered growth in palay production with Surigao del Norte generated the highest increase of 7.33 percent. This was followed by the Province of Dinagat Islands at 5.92 percent. Being the food basket of the region, Agusan del Sur exhibited only a slight increase of less than 1.0 percent with its output totalled to 140,617.50 MT in Q2 2019 from 139,884 MT in the same period last Source: PSA Caraga year. The province’s palay production comprised more than half of the region’s total commodity output. Figure 8. Palay Yield by Province

Consequently, the low palay production output of the region was ascribed to the decline in the area harvested, particularly in the provinces of Surigao del Sur and Agusan del Norte by 6.30 percent and 2.84 percent, respectively (Figure 7). The expansion in the area harvested in Agusan del Sur by 6.95 percent, Dinagat Islands by 1.84 percent and Surigao del Norte by 1.17 percent, failed to compensate the reduction in Source: PSA Caraga the aggregate area harvested in Agusan del Norte and Surigao del Sur. Palay Farmgate Price In terms of yield, the region’s average yield per hectare decreased by 3.94 percent to settle at The implementation of Republic Act No. 11203, 3.15 MT/ha. in Q2 2019 compared to 3.28 liberalizing the importation, exportation and MT/ha. in Q2 2018 (Figure 8). Palay yield in the trading of rice, made a dint in the farmgate price provinces of Surigao del Sur and Agusan del Sur of region’s locally produced palay. The region’s dropped by 8.94 percent and 6.01 percent, palay farmgate price declined by 21.39 percent respectively. Meanwhile, the provinces of from an average of PhP 19.82/kg. in Q2 2018 to Dinagat Islands and Surigao del Norte PhP 15.58/kg. in the same period this year generated an increase in palay yield at 4.0 (Figure 9). Among the provinces, Surigao del percent and 6.08 percent, respectively. Sur recorded the highest farmgate price at PhP

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16.04/kg., while Surigao del Norte posted the same period last year. The aggregate volume of lowest at PhP 14.00/kg. in Q2 2019. rice distributed in the local market remarkably grew by roughly 134 percent, which totalled to Figure 9. Palay Farmgate Price by Province 70,939 bags in Q2 2019 from 30,284 bags in Q2 2018 (Figure 12). The arrival of imported rice early this year and the additional individual retailers’ outlets accredited by NFA Caraga to achieve its 10 percent market participation target were the contributing factors to the huge surge in the volume of rice distributed in the local markets.

Figure 11. Palay Procurement by Province Source: PSA Caraga

Rice Stock Inventory, Procurement and Distribution

The region exhibited high rice stock inventory in Q2 2019, representing roughly 508 percent increase of the aggregate rice stock in the same period last year (Figure 10). This was ascribed to early arrival of imported rice from Vietnam and Source: NFA Caraga Thailand in Q1 2019, which were subsequently distributed all throughout the provinces in the Figure 12. Rice Distribution by Province region in the following quarter to augment and supplement rice stock inventory and distribution in the local markets. Apart from it, there was also substantial volume of locally produced palay procured by NFA Caraga in Q2 2019.

Figure 10. Rice Stock Inventory by Province

Source: NFA Caraga

Corn

The region’s corn production remarkably grew Source: NFA Caraga by 16.20 percent, from 31,560 MT in Q2 2018 to 36,672.94 in the same period this year (Figure 13). Agusan del Sur displayed a significant The significant increase in the locally produced increase in the volume of produced corn by palay procured by NFA Caraga by 7,735 21.80 percent, from 27,707 MT in Q2 2018 to percent, which totalled to 167,828 bags in Q2 33,746 MT in Q2 2019. The notable growth in 2019 compared to 2,142 bags in the same the province’s production output, which quarter last year (Figure 11), was attributed to comprised 92.0 percent of the region’s total corn the implementation of additional PhP 3.00/kg production, even out the low output generated in buffer stocking incentive, continuous Agusan del Norte and Surigao del Sur. The implementation of drying, delivery and the increase in the region’s overall corn production cooperative development incentive fee (CDIF) output was attributed to the expansion of the and higher buying price offered by the agency total area harvested, which grew by 9.90 compared to the rice traders. On the other hand, rice distribution in the local market went well in Q2 2019 compared to the

Page 4 of 18 percent, from 8,615 has. in Q2 2018 to 9,468 Figure 13. Corn Production by Province has. of the same period this year (Figure 14). Except for Agusan de Norte, the rest of the provinces of the region managed to expand their corn production areas. In particular, a remarkable uprsurge in the total corn production area was noted in Agusan del Sur, which grew by 15.82 percent. On the other hand, Agusan del Norte’s aggregate area planted to corn plunged by 34.49 percent.

On the other hand, the region’s corn yield improved by 5.73 percent in Q2 2019 to register Source: PSA Caraga at 3.87 MT/ha. from 3.66 MT/ha. of the same period last year (Figure 15). The province of Figure 14. Corn Area Harvested Production by Province Surigao del Norte exhibited a significant increase in corn yield by 20.11 percent from 1.83 MT/ha. in Q2 2018 to 2.20 MT/ha. in Q2 2019. The provinces of Agusan del Norte and Agusan del Sur achieved higher corn yields posted at 7.42 percent and 5.16 percent, respectively. However, the Province of Dinagat Islands recorded a drop its corn yield by 2.29 percent, while Surigao del Sur exhibited a hefty decline of 15.85 percent yield. Source: PSA Caraga

Fruit Crops Figure 15. Corn Yield by Province

The region’s overall fruit crops production marginally grew by 1.61 percent in Q2 2019, from 80,128.96 MT in Q2 2018 to 81,419.79 MT (Figure 16). All fruit sectors generated better production output in Q2 2019 led by priority fruits, which yielded an increase of 31.08 percent. The major fruits, which comprised about 96 percent of the total fruit crops production, generated only a slight increase of 0.97 percent. The other fruits eked out by 0.31 percent. Source: PSA Caraga

The major fruits comprised of banana, Figure 16. Fruit Crops Production, Caraga Region calamansi, mango and pineapple. All fruits under this category exhibited growth, except for calamansi, which production output declined by 11.05 percent. The banana commodity, which comprised roughly 92 percent of the region’s major fruit production, marginally rose by 0.70 percent. Mango and pineapple also expanded by 5.65 percent and 3.75 percent, respectively

All provinces generated an increase in major Source: PSA Caraga fruit production, except for Agusan del Sur, which output declined by 8.56 percent in Q2 posted 5.48 percent growth in production and 2019 (Figure 17). Surigao del Sur accounted contributed 29.30 percent of the region’s total 41.31 percent of the region’s total major fruit output. The province of Dinagat Islands production, which comprised mainly by banana. registered the highest increase with 8.49 This was followed by Agusan del Norte, which percent, which comprised largely by banana.

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However, the province contributed minimally Surigao del Sur recorded a major decline in (0.10 percent) to the region’s total output. vegetable production by 30.31 percent in Q2 2019 due to a 51.54 percent drop in cassava production (Figure 19). The Province of Dinagat Vegetables Islands and Surigao del Norte also exhibited low production output by 1.48 percent and 3.85 The region’s total vegetable production went up percent as cassava production contracted by only a margin of 0.90 percent in Q2 2019, during the period. Meanwhile, the increase in the generating a total volume of 24,068.54 MT from production output in Agusan del Norte by 19.32 23,853.72 MT in Q2 2018 (Figure 18). The percent was attributed to the increase in the decline in the production volume of major and volume of production of peanut and camote. The other vegetables by 0.90 percent and 2.03 growth generated by Agusan del Sur by 11.18 percent affected the overall vegetable percent was contributed by the improved production output of the region. Nonetheless, production of eggplant and camote. the drop in the production performance of those commodity groups was compensated by the Figure 19. Major Vegetables Production, By Province substantial increase in the priority vegetables output by 5.74 percent.

Figure 17. Major Fruit Crops Production, By Province

Source: PSA Caraga

Non-Food Industrial and Commercial Source: PSA Caraga Crops

The major vegetable crops encompassed about The production output of non-food industrial and 62 percent of the region’s total vegetable commercial crops (NFICC) in the region dropped production. Except for peanut and cassava, by 4.71 percent from 239,221.73 MT in Q2 2018 which production output declined by 0.63 to 227,955.56 MT in Q2 2019 (Figure 20). This percent and 31.15 percent, the rest of the major was due to the drop in the volume of production vegetable crops generated growth in production of major and priority NFICCs, which fell by 4.02 outputs, such as camote (24.64%), mongo percent and 8.62 percent, respectively. The (20.58%), cabbage (20.00%) and eggplant major NFICCs covered 85.04 percent of the (18.86%). The top three major vegetables region’s aggregate output, while priority NFICC products of the region in Q2 2019 were camote, accounted only 14.76 percent. Meanwhile, cassava and eggplant, which accounted 60.94 production of other NFICCs jumped by 8.91 percent of the region’s total vegetable produce. percent. However, this commodity group Figure 18. Vegetables Production, Caraga Region contributed only 0.20 percent to the region’s total output.

By commodity, coconut was the region’s top commercial produce in Q2 2019, comprising 81.64 percent. It is followed by rubber at 2.25 percent only. However, coconut production declined by 4.60 percent along with sugarcane by 3.57 percent. Production of rubber, abaca and cofee improved by 14.55 percent, 8.19 Source: PSA Caraga percent and 1.71 percent, respectively.

The drop in the regional NFICC aggregate output was attributed to low coconut production

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Figure 20. NFICC Production, Caraga Region production volume compared to other commodities despite a drop of 2.78 percent. Hog production contributed the lion’s share of the regional output by 87.19 percent in Q2 2019. Cattle and carabao production rose 31.68 percent and 20.76 percent, respectively. Despite the availability of locally grown corn and cassava, livestock production is declining due to diminishing margins for production in Caraga drove by rising prices of feeds. Poultry production also decreased by 4.12 percent Source: PSA Caraga across all commodities except for duck which increased 15.91 percent but with minute volume. in the provinces of Agusan del Sur, Dinagat The production of chicken and chicken eggs Islands, Surigao del Norte and Surigao del Sur tapered down by 1.92 percent and 8.28 percent, (Figure 21). Only Agusan del Norte exhibited an respectively. Chicken encompassed the region’s increase in coconut production by 11.34 percent. share of 67.21 percent followed by chicken eggs The coconut industry is still confronted by which accounted for 29.32 percent in Q2 2019. declining copra prices, which is dependent on the prices of the international market. Figure 22. Livestock Production, Caraga Region

On the other hand, the production performance of abaca substantially expanded as Surigao del Norte and Agusan del Sur’s production output grew by 95.52 percent and 87.96 percent, respectively.

Moreover, substantial growth in rubber production was noted in Agusan del Sur by 14.29 percent, Agusan del Norte by 23.26 percent and Surigao del Norte by 30.56 percent, Source: PSA Caraga respectively. Figure 23. Poultry Production, Caraga Region Surigao del Sur is the region’s top coffee producer, contributing 85.56 percent share of the region’s total output. Figure 21. Major NFICC Production, By Province

Source: PSA Caraga

Fishery

Source: PSA Caraga The overall fishery output in the region slightly increased by 1.75 percent in Q2 2019, totalled to 20,060.85 MT from 19,716.50 MT in Q2 2018 Livestock and Poultry (Figure 24) despite decline of the aquaculture by 4.02 percent. The commercial and municipal The combined livestock and poultry production fisheries production generated a hefty increase in the region slumped by 1.70 percent in Q2 by 11.69 percent and 2.50 percent, respectively. 2019 to reach 16,813 MT from 17,104 MT in Q2 In Q2 2019, the region’s top fish catch under 2018 (Figures 22 and 23). Livestock production commercial fisheries were Bigeye Tuna slipped 0.33 percent due to huge decline in hog (Tambakol/Bariles), Frigate Tuna (Tulingan),

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Roundscad (Galunggong), Skipjack (Gulyasan) Figure 24. Fishery Production, Caraga Region and Yellowfin Tuna (Tambakol/Bariles).

Consequently, the region’s total fishery production value grew by 15.62 percent in Q2 2019 to reach PhP 1.65 Billion from PhP 1.78 Billion in Q2 2018 (Figure 25). Municipal fisheries generated the highest growth at 8.92 percent. It is followed by commercial fisheries at 8.45 percent. Meanwhile, production value of aquaculture fishery commodities yielded an increase of 4.77 percent despite the decline in quantity outputs during the period. This was Source: PSA Caraga attributed to high market prices on aquaculture fishery fishery, specifically milkfish, mudcrab Figure 25. Fishery Value, Caraga Region and seaweed.

All provinces exhibited increase in fisheries production in Q2 2019, except for Agusan del Sur, which is a landlocked province (Figure 26). The major fish producing provinces, Surigao del Norte and Surigao del Sur, generated production growths at 1.41 percent and 1.37 percent, respectively. Both provinces accounted 80.43 percent share of the region’s total fisheries production. The Province of Dinagat Islands, Source: PSA Caraga eked out a mere 0.66 percent growth. Agusan del Norte bettered other provinces with 5.84 Figure 26. Fishery Production, By Province percent hike in fishery production. Meanwhile, fishery production in Agusan del Sur fell by 8.50 percent.

Forestry

The region’s log production in Q2 2019 slightly went up by 2.0 percent, generating a total volume of 138,707 cu.m. from 135,958 cu.m. in Q2 2018 (Figure 27) despite the notable Source: PSA Caraga decrease in the production outputs generated in Agusan del Sur and Surigao del Norte by 8.87 percent and 34.75 percent, respectively. Agusan Figure 27. Log Production, Caraga Region del Sur produced 55.75 percent of the region’s total log production in Q2 2019. Nevertheless, the low forestry output in the said provinces were absorbed by the substantial increase in production generated in Agusan del Norte and Surigao del Sur by 9.0 percent and 36.09 percent, respectively. Surigao del Sur remarkably produced 10,745 cu.m. more logs in from 29,772 cu.m. in Q2 2018 to 40,517 cu.m in Q2 2019.

Source: DENR Caraga

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TRADE AND INDUSTRY SERVICES SECTOR PERFORMANCE

Business Name Registration assistance to key industry players, particularly palm oil industry. Surigao del Sur topped among other provinces in the region on domestic sales, Fewer business enterprises have registered achieving 1,050.36 percent increase, which was through the Business Name Registration ascribed to the implementation of CARP and System (BNRS) in Q2 2019 as the business ICE Program of DTI Caraga that provide name registrants waned by 18.76 percent, which financial support to micro, small and medium totalled to 1,771 registrants from 2,180 enterprises (MSMEs). registrants in Q2 2018 (Table 2). All provinces displayed lower number of business registrants Table 4. Domestic Sales, Caraga Region compared to the same period last year. Province Q2 2018 Q2 2019 Percent (%) Change Table 2. New Business Name Registered, Caraga Region ADN 119.2 63.58 -46.66% Province Q2 2018 Q2 2019 Percent (%) ADS 74.53 106.98 43.54% Change SDN* - - - ADN 706 690 (2.27) SDS 6.95 79.95 1050.36% ADS 449 371 (17.37) PDI 18.50 5.60 -69.73% SDN 520 334 (35.77) Caraga 219.18 256.11 16.85% SDS 420 319* (24.05) *No submission PDI 85 57 (32.94) Source: DTI Caraga Caraga 2,180 1,771 (18.76) *Comprised only walk-in clients. Moreover, the upsurge in the region’s Source: DTI Caraga investments in Q2 2019 was mainly contributed

by the additional investments generated locally, On the average, jobs generated from registered particularly in Agusan del Sur and Surigao del business enterprises in Q2 2019 decreased by Sur. The RC Square located in Trento, Agusan 13.88 percent, which totalled to 6,476 jobs from del Sur has expanded its store. The Tropics 7,520 jobs in Q2 2018 (Table 3). Among the Hotel and Resort in Barobo in Surigao del Sur provinces, only Surigao del Sur showed growth has expanded its facilities upon approval of local on jobs generated during the quarter by 30.70 investment incentive by the Barobo Investment percent, which include jobs monitored under the Promotion Unit (IPU). On the other hand, the Comprehensive Agrarian Reform Program CARP and ICE Program of DTI Caraga (CARP) and Industry Cluster Enhancement extended financial support to MSMEs at the (ICE) Program of DTI Caraga. local level.

Table 3. Jobs Generated, Caraga Region Table 5. Investment, Caraga Region Province Q2 2018 Q2 2019 Percent (%) Province Q2 2018 Q2 2019 Percent (%) Change Change ADN 3,707 3,303* (10.90) ADN 156.11 155.74 -0.24% ADS 1,683 1,266 (24.78) ADS 125.48 341.14 171.87% SDN 1,183 791 (33.14) SDN 228.22 136.18 -40.33% SDS 824 1,077 30.70 SDS 29.83 138.34 363.76% PDI 123 39 (68.29) PDI 23.40 6.16 -73.68% Caraga 7,520 6,476 (13.88) *Preliminary data only as some LGUs failed to submit reports on cut-off date. Caraga 563.04 777.56 38.10% Source: DTI Caraga Source: DTI Caraga

Despite the slumped figures in business Export registration and jobs generation, domestic sales and investments were significantly up in Q2 The region’s aggregate volume of exported 2019 by 16.85 percent (Table 4) and 38.10 products jumped by 35.89 percent in Q2 2019 to percent (Table 5) compared to the same period 7.55 Billion kilograms from 5.56 Billion kilograms last year. The increase in domestic sales was in Q2 2018 (Figure 28). The surge in the quantity attributed to the expansion of government of exported products was mainly attributed by

Page 9 of 18 the increase in mineral ores shipments to China on the top, generating an increase of 66.32 and Japan. However, the corresponding value percent. Lumber and plywood recorded an slightly fell by 1.95 percent, which totalled to upsurge of 62.37 percent 48.30 percent, US$ 186.09 Million from US$189.79 Million. This respectively. was due to low shipment of high value mineral products (Figure 29). Mineral ores comprise a The increase the volume of manufactured wood- large share in the region’s total export, based products was attributed to the increase in comprising more than 90 percent. log production by 2.0 percent and in the number of operating wood processing plants (WPPs) The region’s shipment of mineral products operating in the region by 8.82 percent in Q2 slightly rose by 4.92 percent in Q2 2019, which 2019 compared to the same period last year. To total to 192 shipments from 183 shipments in Q2 date, there are 37 WPPs operating in the region. 2018. The nickel ores comprised about 90.63 A large bulk of the wood-based manufactured percent of the region’s total mineral shipments, products are produced in Agusan del Norte, which increased by 6.75 percent during the comprising 91.45 percent. period. Meanwhile, the shipments of gold and nickel/cobalt mixed sulfides went down by 33.33 Figure 30. Manufactured Wood-based Products, Caraga Region percent and 50.00 percent, respectively. Nickel/cobalt mixed sulfides are currently being produced by Taganito HPAL Nickel Corporation, operating in Claver, Surigao del Norte, by processing low-grade nickel oxide ore through high pressure acid leach (HPAL).

Figure 28. Volume of Export, Caraga Region

Source: DENR Caraga

Mining

Majority of the region’s minerals products exhibited substantial increase in volume of Source: PSA Caraga production, except for nickel ores. Quantity outputs of gold, silver and nickel/cobalt mixed Figure 29. Value of Export, Caraga Region sulfides generated double digits growth for Q2 2019 relative to volume of production in Q2 2018 by 14.52 percent, 10.10 percent and 22.40 percent (Table 6). Moreover, a mineral product is newly added in the list of the region’s mineral produce starting in Q2 this year called scandium oxalate, a rare earth element produced by Taganito HPAL Nickel Corporation as a by- product of HPAL process. For Q2 2019, the volume of production of scandium oxalate Source: PSA Caraga reached 3,670 dry kilogram. Meanwhile, nickel ores production declined by 13.93 percent compared to the quantity output generated in Q2 Manufacturing 2018.

The quantity output of the region’s manufactured Despite low production in nickel ores, the wood-based products exhibited a substantial aggregate gross value of minerals remarkably increase by 58.92 percent in Q2 2019, which increased by 31.18 percent, from PhP 10.81 totalled to 114,058 cu.m. from 71,769 cu.m. in Billion in Q2 2018 to PhP 14.17 Billion in Q2 the same period last year (Figure 30). All wood- 2019. All mineral commodities generated a based manufactured products showed double surge in gross sales with nickel/cobalt mixed digits growth in production outputs with veneer

Page 10 of 18 sulphides posted the highest increase by 49.29 Percent percent. Indicator Q2 ‘18 Q12 ‘19 (%) Change Nickel/Cobalt Mixed On government revenue generated from mining - 222.91 - development, collection of excise tax was up by Sulfides 15.84 percent in Q2 2019, which totalled to PhP Scandium Oxalate - 3.22 - Metallurgical Chromite 408.35 Million from PhP 352.50 Million in Q2 Total 731.24 707.12 (3.30) 2018. However, collection of royalty tax Employment (Peak) plummeted by 3.30 percent, from PhP 731.24 Gold 5,239 5,540 5.75 Million in Q2 2018 to PhP 707.12 Million in Q2 Silver 2019. Nickel Ore 18,037 16,124 (10.61) Nickel/Cobalt Mixed 3,192 - Table 6. Mining Statistics, Caraga Region Sulfides Percent Scandium Oxalate - 3,501 - Indicator Q2 ‘18 Q12 ‘19 (%) Metallurgical Chromite 34 29 (14.71) Change Total 26,502 25,194 (4.94) Production Volume *Preliminary data only Gold (kg-1000 Source: MGB Caraga 710.24 813.38 14.52 fineness) Silver (kg) 146.98 161.83 10.10 Nickel Ore (in ‘000 Dry 7,488.90 6,445.48 (13.93) Metric Ton/DMT) Nickel/Cobalt Mixed 12,848.50 15,726.50 22.40 Sulfides (DMT) Scandium Oxalate (dry - 3,670.20 - kilogram) Metallurgical Chromite - - - Production Value (PhP Million) Gold 1,526.63 1,793.11 17.53

Silver 4.00 4.01 0.13

Nickel Ore 5,704.01 6,941.47 21.69

Nickel/Cobalt Mixed 3,571.45 5,331.94 49.29 Sulfides

Scandium Oxalate - 103.23 - Metallurgical Chromite - - - Total 10,805.10 14,173.76 31.18 Estimated Excise Tax (PhP Million) Gold 69.79 76.28 9.31 Silver 0.14 0.17 26.51 Nickel Ore 282.58 331.90 17.45 Nickel/Cobalt Mixed - - - Sulfides Scandium Oxalate - - - Metallurgical Chromite Total 352.50 408.35 15.84 Estimated Royalty Tax (PhP Million)* Gold 87.23 95.35 9.31 Silver 0.17 0.22 26.51 Nickel Ore 643.84 385.41 (40.14)

SERVICES SECTOR PERFORMANCE

Financing Indicators Q2 ‘18 Q2 ‘19 Percent (PhP (PhP Page 11(%) of 18 Billion) Billion) Change The performance of the region’s banking sector Rural 5.37 3.68 (31.47) contracted as total assets and total gross Cooperative operating income decreased by 11.54 percent Banks and 9.49 percent in Q2 2019 compared to the Total 25.58 28.01 9.50 same period last year (Table 7). The banking Source: BSP sector’s total assets decreased by PhP 8.9 Billion in Q2 2019, which was attributed by the Table 8. Banking Statistics by Province drop in the total assets of universal, commercial Indicators Q2 ‘18 Q2 ‘19 Percent (%) (PhP Billion) (PhP Billion) Change and rural cooperative banks. The sector’s total Total Assets gross operating income by PhP 90 Million due to ADN 30.82 26.84 (12.90) the decline in gross operating income of thrift ADS 13.49 12.08 (10.43) and rural cooperative banks. Meanwhile, the PDI 1.04 1.10 5.39 loan portfolio of all banks in the region surged by SDN 18.98 16.26 (14.33) 9.49 percent, yielding an increase of PhP2.43 SDS 12.86 12.00 (6.66) Billion. Total 77.19 68.28 (11.54) Total Gross Operating Income On provincial performance of banking sector, ADN 0.60 0.55 (7.69) only the Province of Dinagat Islands exhibited ADS 0.35 0.35 2.42 growth in all three financial parameters in Q2 PDI 0.03 0.06 69.57 2019 compared to Q2 2018. The province’s SDN 0.29 0.25 (14.78) banking sector overall performance achieved a SDS 0.35 0.33 (5.68) remarkable surge of 5.39 percent in gross total Total 1.58 1.49 (6.18) assets, 69.57 percent in gross operating income Loan Portfolio and 55.17 percent in loan portfolio. Meanwhile, ADN 12.47 13.63 9.33 all the provinces displayed positive performance ADS 5.18 6.02 16.39 in all banks’ loan portfolio. PDI 0.06 0.10 55.17 SDN 4.06 4.23 4.19 Table 7. Banking Statistics by Type of Banks SDS 3.81 4.02 5.57 Indicators Q2 ‘18 Q2 ‘19 Percent Total 25.58 28.01 9.49 (PhP (PhP (%) Source: BSP Billion) Billion) Change Total Assets Universal and 63.49 56.22 (11.45) Tourism Commercial Banks Preliminary tourist arrival data released by DOT Thrift Banks 6.91 6.99 1.16 Caraga for Q2 2019 indicated a huge decline by Rural 6.79 5.07 (25.33) 81.31 percent, from 410,268 tourist arrival in Q2 Cooperative Banks 2018 to only 76,655 tourist arrival in the same Total 77.19 68.28 (11.54) period this year (Figure 31). This was attributed Total Gross Operating Income to the drop in the tourist arrival of both domestic Universal and 0.61 0.62 1.64 and foreign tourists. Commercial Banks The number of domestic tourists visiting the Thrift Banks 0.46 0.40 (13.04) region, which encompassed 86.05 percent of the Rural 0.52 0.47 (9.62) aggregate tourist arrival in the region, plunged Cooperative by 83.00 percent compared to the same period Banks in 2018. Likewise, the number of foreign tourists Total 1.58 1.49 (5.70) plummeted by 51.02 percent during the period. Loan Portfolio On the other hand, no data on the overseas Universal and 14.56 19.09 31.11 tourist arrival was recorded for Q2 2019. Commercial Banks Thrift Banks 5.65 5.24 (7.26)

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Figure 31. Tourist Arrivals, Caraga Region number of flights and air passengers by 21.61 percent and 36.77 percent that was ascribed to the thriving tourism industry in Siargao Islands, Surigao del Norte.

Figure 33. Number of Flights, Caraga Region

Source: DOT Caraga

Moreover, the number of accredited tourism- related establishments (TREs) rose 53.75 percent in Q2 2019 relative to the same period in 2018 (Figure 32). Notable increase of Source: CAAP Butuan, Surigao, Siargao and Tandag accredited TREs was noted in Surigao del Norte and Surigao del Sur, which was attributed by the Figure 34. Number of Passengers, Caraga Region continuous effort of DOT Caraga and the concerned LGUs on mandatory accreditation of primary tourism enterprises in the region.

Figure 32. Accredited Tourism-Related Establishments Caraga Region

Source: CAAP Butuan, Surigao, Siargao and Tandag

Figure 35. Volume of Cargo, Caraga Region

Source: DOT Caraga Page 14

Air Transportation

The recorded air traffic in the region for Q2 2019 declined by 6.42 percent, which totalled to 3,601 Source: CAAP Butuan, Surigao, Siargao and Tandag flights against 3,848 flights in the same period of 2018 (Figure 33). Consequently, a decline was Sea Transportation noted in the number of air passenger and the volume of cargoes during the period by 6.60 percent (Figure 34) and 3.0 percent (Figure 35), The region’s sea traffic significantly expanded in respectively. Q2 2019 as evident in the recorded number of ship calls, which grew by 11.93 percent from In particular, there was a drop in the number of 7,982 in Q2 2018 to 8,934 ship calls (Figure 36). flights and air passengers recorded particularly Both the Agusan and Surigao Ports exhibited a in Butuan and Surigao Airports, while no surge in domestic ship calls at an average of recorded commercial operation in Tandag 12.0 percent, which comprised roughly 98 Airport since February of this year. Meanwhile, percent of the region’s sea traffic. This was the Siargao Airport exhibited growth in the attributed to the increase in the number of voyages of passenger vessels operating within

Page 13 of 18 and outside the region to accommodate the Both inbound and outbound domestic cargo volume of passengers during the summer throughputs exhibited an increase by 6.79 vacation. In particular, the PPA Surigao percent and 16.52 percent, respectively. The recorded additional roll-on and roll-off (RORO) high inbound domestic cargo throughputs was and other passenger vessels plying the Surigao ascribed to the increase in the shipments of to Leyte, Dinagat Islands and Siargao routes. diesel fuels, logistics equipment, cement and Foreign ship calls also rose at an average of 9.9 other construction materials and machineries, percent due to the rise in the number of mineral particularly to the island municipalities of the shipments to foreign countries by the operating region. In particular, PPA Surigao observed an mining companies in the region. upsurge in the shipments of sand and gravel materials to Siargao and Socorro islands due to Figure 36. No. of Ship calls, Caraga Region massive infrastructure developments in those areas.

On foreign cargo throughput, imports fell by 5.74 percent while exports rose by 9.88 percent. For PPA Agusan recorded a significant decrease in the volume of export product by 31.04 percent due to low recorded shipment of nickel ores from mining companies in Agusan del Norte and weather constraints resulting in the delayed loading operations of foreign vessels in the Source: PPA Agusan and Surigao Agusan Port. Meanwhile, PPA Surigao posted an increase in outbound foreign cargo throughputs in Q2 2019, as the number of The aggregate passenger traffic displayed an mineral shipments to foreign countries soared by increase of 24.72 percent Q2 2019, which 16.84 percent. totalled to 1,507,701 passengers compared to 1,208,883 passengers in Q2 2018. The higher Figure 38. Volume of Cargo (MT), Caraga Region volume of passengers recorded both in Agusan and Surigap Ports was attributed by the influx of tourists visiting the major tourist destination areas of the region summer time (Figure 37). Page 15 Figure 37. Number of Passengers, Caraga Region

Source: PPA Agusan and Surigao

Land Transportation

The region’s new motor vehicle registration was Source: PPA Agusan and Surigao down by 10.42 percent while renewal accelerated by 10.39 percent in Q2 2019 (Figure 39). New vehicle registration fell by 1,787 units Total cargo throughput was up by 9.28 percent from 17,157 units in Q2 2018 to 15,370 units in in Q2 2019, from 9.9 Million MT in Q2 2018 to Q2 2019. On the other hand, renewal of vehicles 10.88 Million MT (Figure 38). The volume of jumped by 4,012 units from 38,613 units in Q2 domestic cargoes throughput rose by 9.18 2018 to 42,625 units in Q2 2019. percent, reaching 884,421 MT in Q2 2019 from 810,074 MT in Q2 2018. Meanwhile, volume of foreign cargoes throughput surged by 9.28 percent, from 9.14 Million MT in Q2 2018 to 9.99 Million MT in Q2 2019.

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About 93.00 percent of the newly registered Figure 39. Motor Vehicle Registration, Caraga Region vehicles were accounted in Agusan del Norte and the remaining 7.00 percent was contributed by Surigao del Sur. The bulk share of the region’s renewal of vehicles is situated in Agusan del Norte at 55.90 percent. This was followed by Surigao del Sur at 16.58 percent, Surigao del Norte at 15.94 percent and Agusan del Sur at 11.58 percent.

Source: DOTr Caraga

.

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PEACE AND SECURITY

Criminality incidents in the same period last year. This was attributed to the substantial increase in the The region’s average monthly crime rate reported cases of reckless imprudence resulting (AMCR)1 reduced by 1.75 percentage points in (RIR) to physical injuries and damage to Q2 this year, which recorded at 27.31 percent properties by 15.30 percent and other non-index compared to 29.06 in the same period last year. crimes by 23.81 percent, particularly in Butuan This implies that on the average, there were 27 City and the provinces of Agusan del Norte and crimes recorded per 100,000 population in the Surigao del Norte. region from April to June of this year (Table 10). The region achieved substantial improvement in The region’s incidents of index crimes2, which crime clearance efficiency (CCE)4 and crime accounted 17.37 percent of the total crime solution efficiency (CSE)5, with an average of 94 volume substantially dropped by 15.43 percent percent and 90 percent, respectively. Surigao in Q2 2019 due to substantial reduction in the del Norte topped other LGUs at 95 percent on reported incidents of murder (13.75 percent), CCE while the Province of Dinagat Islands physical injury (6.04 percent), rape (3.70 obtained the highest CSE at 93 percent. percent), robbery (29.41 percent) and theft (39.45 percent), particularly in Butuan City and The decrease of index crimes is attributed to the the provinces Agusan del Sur, Surigao del Norte region’s intensified law enforcement and anti- and Surigao del Sur. Meanwhile, both Agusan criminality operations such as “Oplan Sita” and del Norte and the Province of Dinagat Islands campaign against loose firearms particularly on recorded notable surge in index crimes, which crime prone areas. The continuous illegal-drug posted at 22.03 percent and 15.38 percent, operations also contributed to the reduction on respectively. Higher incidents of murder and index crimes. Strengthened collaboration with physical injuries were recorded in Agusan del the communities also played a significant role in Norte in Q2 this year, which grew by 15.38 the reduction of crimes and insurgency. percent and 12.5 percent compared to the same period last year. Moreover, the reported cases of Continuous trainings and seminars such as rape and physical injuries in the Province of basic skills and techniques in criminal Dinagat Islands amplified by 133.33 percent and investigation made a positive impact on the 300.0 percent relative to the recorded incidents successful solution of crimes and filing of cases in the same period last year. in court. Proper and effective implementation of the Police Integrated Patrol System (PIPS). On the other hand, non-index crimes3 increased by 1.09 percent in Q2 2019 against the reported ) through foot and mobile patrols enhanced the Indicator Q2 ‘18 Q2‘19 Percent (%) region’s crime prevention and solution. Change Non-Index Crime Table 9. Crime Statistics, Caraga Region Butuan City 300 381 27.00 Indicator Q2 ‘18 Q2‘19 Percent (%) ADN 292 292 0.00 Change ADS 519 430 (17.15) Index Crime PDI 37 39 5.41 Butuan City 74 68 (8.11) SDN 302 356 17.88 ADN 59 72 22.03 SDS 380 352 (7.37) ADS 114 89 (21.93) Caraga 1830 1820 1.09 PDI 13 15 15.38 Crime Volume Butuan City 374 449 20.05 SDN 106 81 (23.58) ADN 351 364 3.70 SDS 94 64 (31.91) ADS 633 519 (18.01) Caraga 460 389 (15.43) PDI 50 54 8.00

1 AMCR is calculated as number of crimes over total population over number 4 PNP defined CCE as the percentage of cleared cases out of the total of months multiplied by 100,000 population. number of crime incidents handled by law enforcement agencies for a 2 PNP defined index crimes as crimes which are sufficiently significant and given period of time. which occur with sufficient regularity to be meaningful, such as murder, 5 PNP defined CSC as the percentage of solved cases out of the total physical injury, robbery, theft and rape. number of crime incidents handled by law enforcement agencies for given 3 PNP defined non-index crimes as all types of crimes not considered as period of time. index crimes. Page 16 of 18

Indicator Q2 ‘18 Q2‘19 Percent (%) Change SDN 408 437 7.11 SDS 474 416 (12.24) Caraga 2290 2239 (2.23) Crime Clearance Efficiency (%) Butuan City 85 93 8 ADN 90 93 3 ADS 88 94 6 PDI 85 94 9

SDN 83 95 12

SDS 84 93 9

Caraga 86 94 8

Crime Solution Efficiency (%) Butuan City 70 87 17 ADN 85 90 5 ADS 82 87 5 PDI 78 93 15 SDN 74 91 17 SDS 76 89 13 Caraga 78 90 12 Source: PNP Caraga

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DEVELOPMENT PROSPECTS

Agriculture Development funded under RCEF. (Source: Department of Agriculture – Caraga Facebook Page)  Ongoing construction of Integrated Rubber Production and Marketing in Km. 7, Tungao, Butuan City with a total project Infrastructure Development cost of PhP 22.46 Million. The project, which is funded under the Department of  On-going conduct of feasibility study on Agriculture’s Philippine Rural Development DOTR’s Mindanao Railway Project Phase Project (DA-PRDP), involves the 2, which is pipelined for China financing. construction of a Nursery Seedling The proposed project will encompass a Production Facility, a Nursery Seed Bed construction of a 206.20 km. railway line and a Consolidation Warehouse, which that would extend from Tagum City to would benefit 158 households. (Source: Butuan City with an estimated total project Reports from RPCO-13, cost amounting to PhP 71.63 Billion. http://prdp.da.gov.ph/ensuring-project-quality-by- (Source: neda.gov.ph, infrastructure flagship strict-monitoring-and-inspection/) projects as of July 2019, http://www.neda.gov.ph/infrastructure-flagship-  On-going construction of Warehouse and projects) Multi-Purpose Drying Pavement for the Cassava Granules Processing and  Construction of new Anao-aon Bridge that Marketing located in Brgy. Cayetano, is utilizing Corrugated Steel Plates (CSP), Dinagat, Province of Dinagat Islands. The a support material to make bridges project has a total project cost amounting earthquake-resistant, with a total cost of to PhP 2.93 Million. Said project is a PhP 179.92 Million. (Source: Department of component of a PhP 10.0 Million DA- Public Works and Highways – Caraga Facebook Page) PRDP-funded subproject that would benefit

1,069 beneficiaries in the province. (Source: Reports from RPCO-13,  On-going construction/maintenance of http://prdp.da.gov.ph/ensuring-project-quality-by- flood mitigation structures and drainage strict-monitoring-and-inspection/) systems of Butuan City’s Lower Agusan Development Project - Flood Control  Distribution of hauling trucks to farmers’ Component with a total project cost cooperatives in the region by DA Caraga amounting to PhP 101.87 Million. (Source: with a total cost of PhP 10.9 Million. (Source: Department of Public Works and Highways – Caraga Philippine Information Agency – Caraga Facebook Facebook Page) Page)  Ongoing repair of Surigao City Airport  Implementation of a 3.6 km Concreting of runway wherein the initial 400 meters R. Ecleo to Upper Laguna Farm-to-Market portion is on track to meet the deadline by Road Project funded under the DA-PRDP, November this year and the remaining 700 which is located in Cagdianao, Dinagat meters is on February 2020. (Source: Islands with a total project cost amounting Jennifer P. Gaitano, to PhP 108 Million. (Source: Department of https://pia.gov.ph/news/articles/1027008) Agriculture – Caraga Facebook Page)

 Distribution of 67 units of rice combine Business and Commercial Development harvesters by DA-Caraga with a total worth of PhP 82 Million, which is funded under the  Sprouting of 7-Eleven convenience stores Rice Competitiveness Enhancement Fund in Caraga Region. (RCEF). (Source: Department of Agriculture – Caraga Facebook Page)  Construction of Penong’s Butuan  Distribution of farm machineries and Restaurant along JC Aquino Avenue near equipment to 249 farmers associations by Metrobank, Butuan City. DA-Caraga with total project cost amounting to PhP 209 Million, which is

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