Fourth Quarter of 2019

Home , Agusan (province), Agusan del Norte, Agusan del Sur, Bancasi Airport, Butuan, Cabadbaran

TABLE OF CONTENTS

I. Macroeconomic Performance ...... 1 Inflation ...... 1 Exports ...... 3 Labor and Employment ...... 5

II. Agriculture, Forestry and Fishery Sector Performance . . . 6 Palay ...... 6 Corn ...... 6 Major Fruits ...... 7 Major Crops ...... 7 Fishery ...... 8 Forestry ...... 8

III. Trade and Industry Services Sector Performance . . . . 9 Mining ...... 9 Business Name Registration ...... 11

IV. Services Sector Performance ...... 12 Tourism ...... 12

V. Peace and Security ...... 13

VI. Development Prospects ...... 14

MACROECONOMIC PERFORMANCE

Headline Inflation Slowed Down

The headline inflation in the region (IMF) monitoring that there had been a eased to its slowest pace during the decline in global oil demand, which month of October, further dropping to - resulted to an overall drop in oil prices 0.4 percent from the -0.3 percent during the same period. In the recorded in September. This is below Philippines, this was reflected through a the target of the Bangko Sentral ng decline in the year-on-year change of Pilipinas (BSP), which is pegged at 3.0 the CPI of transport commodities, percent ± 1.0 percentage point. The dropping to -0.2 percent in October drop in inflation rate is due to the decline 2019. in the year-on-year change in the Consumer Price Index (CPI) for heavily As expected, the headline inflation weighted food and non-alcoholic picked up in December at 2.2 percent as beverages, which dropped to -3.6 the Christmas season induced more percent in October 2019 for the entire spending from consumers. Nonetheless, region. this figure was still below the ideal target of the BSP. The market price of rice continued to decline, as expected from the Meanwhile, the easing of price implementation of the Rice Tariffication pressures prompted the central bank to Law. Likewise, the price of pork cut its interest rates by 25 basis points 2 products also declined as the demand and reduce the required bank reserves decreased due to the outbreak of the in September 2019. This move was African Swine Flu. done to allow investors to borrow money at a cheaper rate and stimulate the The Department of Energy observed in national economy, which expanded by October that there had been a general 5.5% only in August 2019 against the decline in world oil prices 1. This is in line initial 6.0-7.0% target. with the International Monetary Funds’

Figure 1. Inflation Rate for Caraga

7 6 5 4 3 2 1 0 -1 October November December 2018 6.2 5.6 4.2

2019 -0.4 0.7 2.2

Source: PSA Caraga Figure 2. Year-on-Year Changes of the Consumer Price Index in Percent by Commodity Group (2012-00)

20.0 15.0

10.0 5.0

0.0 -5.0 Food and Housing, Furnishings, Alcoholic Non- Clothing and Communicat Water, Recreation Transport Restaurants Health Household Education Beverages, Alcoholic Footwear ion Electricity, and Culture Equipment Tobacco Beverages Gas October -3.6 -0.7 0.6 1.0 1.7 3.1 3.2 3.5 5.1 11.2 16.3 November -2.5 0.2 1.4 1.1 3.5 4.6 3.8 4.0 5.0 11.2 17.4 December -0.2 4.5 1.4 0.4 3.7 4.8 3.9 4.0 3.3 11.2 17.3

Source: PSA Caraga

Figure 3. Real GDP Growth of World Economies

Source: IMF

1 Department of Energy. (2019, October 22). Oil Monitor as of 22 October 2019. Retrieved from https://www.doe.gov.ph/oil-monitor/oil-monitor-22-october-2019. 2 Noble, L. (2019, September 27). BSP slashes key rates a third time. Retrieved from

https://www.bworldonline.com/bsp-slashes-key-rates-a-third-time/ Foreign Exports Doubled, Imports Declined

Both export volume and value doubled demand for nickel ore prompted export in October 2019, reaching USD 119 volume to also increased in the ports of Million compared to USD 55 Million Surigao. recorded during the same period in 2018. Among other factors, demand for On the other hand, import volume and local goods have increased in export value declined by 6 percent and markets as domestic goods are 79 percent, respectively in October 2019 perceived to be cheaper and attractive. compared to the volume and value of imports in October 2018. Contributory to the increase in region’s exports is the reactivation of the nickel The combined effect of the increase in export activities at the port of San exports and decrease in imports Roque Metals Inc. in Tubay, Agusan del indicates an expansion in the region’s Norte. Likewise, China and Japan’s high trade surplus.

Figure 4. Export Value in Caraga (in USD) Figure 5. Import Value in Caraga (in USD)

140,000.00 4,000,000.00 3,500,000.00 120,000.00 100,000.00 3,000,000.00 2,500,000.00 80,000.00 2,000,000.00 60,000.00 1,500,000.00 40,000.00 1,000,000.00 20,000.00 500,000.00 - - October November December October November December 2018 55,821.79 61,050.15 25,131.58 2018 2,836,877.00 3,754,157.00 3,066,313.00 2019 119,071.33 - - 2019 585,000.00 - -

Source: PSA Caraga Source: PSA Caraga

Outbound Domestic Cargo Throughput in Agusan Ports Increased, Inbound Decreased

The domestic inbound and outbound due to multiple reasons. The breakbulk cargo throughput in Agusan followed the incoming cargo decreased by general foreign trade trend movements 42.64 percent since San Miguel in the last quarter of 2019. The cargos Corporation temporarily halted the outbound from Agusan increased by shipment of their bottle cargos due to 36.35 percent. This is attributable to the the siltation at the mouth of the Agusan increase in outgoing cargos of sand and River, which is the main passageway of gravel to be used in the construction of their barge. The volume of refined roads and bridges. There was also an petroleum products unloaded at the port increase in container traffic due to the of Shell Cabadbaran and Nasipit Port rise in shipments of numerous volumes also decreased during the same period. of other general cargos and wood by- Lastly, there had been slow to zero products, such as lumber, which are growths recorded in the shipment of iron bound for Manila and Cebu. The and steel products during the last increase in shipment of fruits and quarter of 2019. vegetables also contributed to the increase in the outbound throughput. On the other hand, overall domestic imports in the ports of Surigao expanded Meanwhile, domestic cargos incoming to by 17.74 percent due to the large Agusan decreased by 35.50 percent in importation of sulfur and other inorganic 2019 compared to same quarter in 2018 fertilizers.

Table 1. Domestic Inbound and Outbound Cargo Throughput in Agusan (in MT)

2018 2019 YOY Change

Inbound 278,891.11 179,871.54 -35.50%

Outbound 201,711.71 274,840.53 36.25% Source: PPA Agusan

Table 2. Domestic Inbound Cargo Throughput in Surigao (in MT)

2018 2019 YOY Change

Inbound 8,500,950.00 10,008,936.00 -17.74% Source: PPA Surigao

Unemployment Rate Increased

The Philippine Statistics Authority Meanwhile, LFS results for the entire (PSA), through its quarterly Labor Force Philippines show that the country’s Survey (LFS) released last October employment and unemployment rates 2019, reported an increase in the stand at 95.5 percent and 4.5 percent, number of Caraganons who are respectively. This translates to an unemployed during the last quarter of increase in the national employment rate 2019, a rise to 4.6 percent from 4.0 by 0.6 percent and a remarkable 12.0 percent in the same quarter the previous percent decline in the unemployment year. This translates to approximately rate. 55,000 unemployed workers in the region. The employment rate also While the country’s employment rate is dropped from 96.0 percent in 2018 to increasing and unemployment rate is 95.4 percent in 2019. Nevertheless, the decreasing, the opposite can be said for underemployment rate significantly the region, partly due to differences in improved to 17.0 percent in 2019 from national and regional labor market 21.4 percent in 2018, which indicates dynamics. that more Caraganons are working full- time.

Table 3. Labor Force Survey Results

Philippines Caraga 2018 2019 Growth Rate 2018 2019 Growth Rate

Employment Rate 94.90 95.50 0.63% 96.00 95.40 -0.62%

Unemployment Rate 5.10 4.50 -11.76% 4.00 4.60 15.00%

Underemployment Rate 13.30 13.00 -2.26% 21.40 17.00 -20.56% Source: PSA Caraga

AGRICULTURE, FORESTRY AND FISHERY SECTOR PERFORMANCE B

OR Palay and Corn Production Declined

While the average farm gate prices of compared to the 19.58 recorded in palay remained at Php 15.54 per kilo 2018. Corn production in Agusan del during the last week of 2019, the Norte also dropped by 79.53 percent, region’s total palay production Dinagat Islands by 47.53 percent as well decreased. Agusan del Sur, which is as Surigao del Sur by 31.96 percent. Caraga’s major producer of palay, saw a decline in its production by 37.5 percent The National Food Authority reported a to 71,202 M.T. in the fourth quarter of decline in the rice stock inventory for 2019 from 131,921 M.T. posted in 2018. Caraga in the fourth quarter of 2019. This was due to the delayed arrival of Meanwhile, the year-on-year growth rate imported rice from Thailand and of the corn production slowed down in Vietnam which were earmarked to 2019. Corn produced by Agusan del augment the rice inventory and Sur, which is the major producer of corn supplement rice distribution in the in the region, increased to 57,377 M.T. region. Likewise, with the enactment in the last quarter of 2019 from 56,793 and implementation of RA 11203, the M.T. in 2018. Nonetheless, the growth in suspension of the rice importation production is only 1.02 percent lowered the region’s total rice inventory.

Figure 6 . Year -on -Year Change of Palay Production in Caraga Figure 7 . Year -on -Year Change of Corn Productio n in Caraga

60.00% 80.00% 40.00% 60.00% 20.00% 40.00% 20.00% 0.00% 0.00% -20.00% -20.00% -40.00% -40.00% -60.00% -60.00% -80.00% -80.00% -100.00% Agusan Surigao Agusan Surigao Agusan Surigao Dinagat Agusan Surigao Dinagat del del del del del Sur del Sur Islands del Sur del Sur Islands Norte Norte Norte Norte 2017-2018 2017-2018 -10.26% 6.19% 38.04% -19.84% -0.89% -13.02% 19.58% 5.00% 4.16% 60.40% % change % change 2018-2019 2018-2019 -7.75% -37.50% 1.42% -31.96% -64.65% -79.53% 1.03% 16.78% -17.76% -47.53% % change % change

Source: PSA Caraga Source: PSA Caraga

Production of Major Fruits Increased, Major Crops Decreased

A slight increase in the production of major crops, coconut and rubber in major fruits such as Banana, Mango, particular. Coconut production dropped Calamansi, and Pineapple was by -4.97 percent. Similarly, rubber observed during the last quarter of 2019 production slowed down as its growth compared to the same period the rate decelerated to 1.65 percent in 2019 previous year. On the other hand, there from the 20.07 percent posted in 2018. was a significant decline in the year-on- year growth rate in the production of

Figure 8. Volume of Production of Major Fruits in Caraga (in M.T.)

90,000.00 80,000.00 70,000.00 60,000.00 50,000.00 40,000.00 30,000.00 20,000.00 10,000.00 - Banana Mango Calamansi Pineapple 2018 71,479.48 6,661.87 3,424.00 224.94 2019 76,866.74 6,665.60 3,587.15 256.90

Source: PSA Caraga

Figure 9. Year-on-Year Change of Major Crops Production in Caraga

25.00%

20.00% 15.00% 10.00% 5.00% 0.00% -5.00% -10.00% Abaca Coffee Coconut Rubber 2017-2018 6.81% 8.93% 4.94% 20.07% % change 2018-2019 1.92% 4.73% -4.97% 1.64% % change

Source: PSA Caraga

Fisheries Production Declined

The volume of fishery production in the started back as early as the last quarter region dropped by 13.83 percent to of 2018. Warm water temperatures 18,164.64 M.T. during the last quarter of caused by El Niño prompt sea animals 2019 compared to the 21,080.82 M.T. to move to colder and deeper waters recorded in 2018. Among others, El which consequently result to challenges Niño is seen to be a factor to such in fishery production. outcome given that said phenomenon

Figure 10. Volume of Production of Fisheries in Caraga (in M.T.)

21,500.00 21,080.82 21,000.00 20,500.00 19,779.28 20,000.00 19,500.00 19,000.00 18,500.00 18,164.64 18,000.00 17,500.00 17,000.00 16,500.00 2017 2018 2019

Source: PSA Caraga

Manufactured Forest Products Increased

There was a 248 percent increase in wood by-products boosted the manufactured forest products during the manufacturing of forest products in the last quarter of 2019 compared to 2018. region. Among others, the high demand for

Figure 11. Manufactured Forest Products in Caraga in (M.T.)

80,000.00 70,000.00 60,000.00 50,000.00 40,000.00 30,000.00 20,000.00 10,000.00 - Agusan del Agusan del Surigao del Surigao del Dinagat Norte Sur Norte Sur Islands 2018 23,793.00 2,940.00 - 2,023.00 - 2019 72,517.00 19,603.13 - 8,069.00 -

Source: DENR Caraga TRADE AND INDUSTRY SERVICES SECTOR PERFORMANCE

Nickel Ore Production Expanded Nickel ore production for all provinces in Meanwhile, nickel ore production in Caraga increased remarkably during the Agusan del Norte grew the most by last quarter of 2019 compared to the 111.55 percent and earned 88.56 same quarter in 2018. Production in percent more from exports. Surigao del Norte, which is the major Despite the increase in volumes and nickel ore producer in the region, grew values of production, the jobs generated by 60.82 percent in the fourth by the mining sector declined. quarter of 2019 at 2,118,443.52 DMT Employment in Surigao del Sur from 1,317,271.12 DMT in 2018. Value decreased by 28.42 percent despite the produced by the said province also increase in production by 35.94 percent increased by 136.99 percent to and value growing by 83.62 percent. PhP 4.7 Billion from PhP 1.9 Billion Employment in mining also decreased in recorded during the previous year. the Province of Dinagat Islands by 17.35 percent.

Figure 12. Year-on-Year Growth of Nickel Ore Production in Caraga (2018-2019)

160.00% 140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% -20.00%

-40.00% Volume of Value of Employment Export Volume Export Value Production Production Generated ADN: Nickel Ore 111.55% 32.03% 23.76% 88.56% -8.64% SDN: Nickel Ore 60.82% 136.99% 36.99% 7.75% 18.06% SDS: Nickel Ore 35.94% 83.62% 12.22% 50.71% -28.42% PDI: Nickel Ore 27.00% 41.16% 23.77% 52.54% -17.35%

Source: MGB Caraga

Gold Production Declined, Silver Production Increased Gold production in Agusan del Sur, the On the other hand, production of silver only province mining gold and silver in grew by 15.25 percent while production the region, declined by 10.07 percent value increased by 36.67 percent. from 719.11 Kg in the last quarter of Export of silver also grew by 36.87 2018 to 646.70 Kg in 2019. percent, which is attributable to the Nevertheless, the value of production increase in export value by 65.88 still grew by 6.58 percent. percent to PhP 5.3 Million from PhP 3.2 Million.

Figure 13. Year-on-Year Growth of Gold and Silver Production in Agusan del Sur (2018-2019)

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

-10.00%

-20.00% Gold Silver Volume of Production -10.07% 15.25% Value of Production 6.58% 36.67% Export Volume 5.58% 36.87% Export Value 19.20% 65.88% Employment Generated 7.46% 7.46%

Source: MGB Caraga

Investments from New Business Registrations Grew

Investments from new business compared to the 1,441 new businesses registrations in the region grew by during the same period in 2018. 475 percent in the fourth quarter of 2019 Contributory are the increases in new compared to the same quarter in 2018. business registrations in Surigao del All five provinces posted positive Norte at 25.21 percent, Surigao del Sur investment growths, where the Province at 10.55 percent, Province of Dinagat of Dinagat Islands gained 2,757 percent Islands at 9.68 percent, and Agusan del rise in investments, which is the highest Sur at 6.09 percent. These new among the provinces. This was followed businesses translate to 4,175 jobs by Agusan del Sur at 780 percent, generated in the region, which is a 20 Surigao del Norte at 413 percent, percent increase from the fourth quarter Surigao del Sur at 335 percent, and in 2018. Agusan del Norte at 31 percent. Worth noting is the proposed opening of the Nonetheless, despite the rise of new multi-billion Silangan Mindanao Mining business registrations, domestic sales in Project in Surigao del Norte, whose the region dropped by 23 percent in the commercial operation is targeted to last quarter of 2019 compared to the commence by July 2022. same quarter in 2018. This equates to PhP 102 Million decrease in domestic The number of new business sales. The said decrease was largely registrations in the region also increased influenced by Agusan del Sur, which is by 8.54 percent to 1,564 new the only province with negative domestic businesses in the fourth quarter of 2019 sales growth rate for the said quarter.

Figure 14. Investments from New Business Figure 15. Domestic Sales from New Registrations in Caraga (in Million PhP) Business Registrations (in Million PhP)

700.00 400.00 600.00 350.00 500.00 300.00 250.00 400.00 200.00 300.00 150.00 200.00 100.00 100.00 50.00 - - Agusan Surigao Agusan Surigao Dinagat Agusan Agusan Surigao Dinagat Surigao del Sur del Norte del Norte del Sur Islands del Sur del Norte del Sur Islands del Norte 2018 73.42 118.42 33.86 6.82 0.42 2018 365.51 69.29 15.90 0.93 4.64 2019 645.91 607.95 44.37 29.70 12.00 2019 227.96 70.74 31.40 15.00 8.31

Source: DTI Caraga Source: DTI Caraga

SERVICES SECTOR PERFORMANCE

Tourist Arrivals Dropped

The partial data shows that tourist month of October where the passengers arrivals in the region declined in the per flight ratio increased due to the fourth quarter of 2019 compared to the International Surfing Competition held in same quarter in 2018. The said trend is Siargao. true for all provinces. According to the Philippine Chamber for Commerce and To address the possible large influx of Industry (PCCI), the sluggish growth in airline passengers during the Christmas tourist arrivals could be attributed to the season, 50 more flights were added congestion in the Ninoy Aquino starting November 2019. However, International Airport (NAIA), where most despite increasing the number of flights of the flights going to Caraga are coming going to Bancasi Airport, the number of from. Nonetheless, worth noting is the passengers per flight still decreased.

Figure 16. Tourist Arrivals in Caraga Figure 17. Passengers per Flight in Bancasi

140,000 140 120,000 120 100,000 100 80,000 60,000 80 40,000 60 20,000 40 - Surigao Agusan 20 Surigao Agusan Dinagat del del del Sur del Sur Islands 0 Norte Norte October November December 2018 122,963 66,160 54,585 35,450 15,108 2018 102 114 124 2019 85,784 6,599 24,412 2019 116 103 113

Source: DOT Caraga Source: CAAP Butuan

PEACE AND SECURITY

Crime Solution Efficiency Rate Declined

The Crime Solution Efficiency (CSE) compared to the 85 percent recorded in rate in the region, which is the 2018. The 9 percent drop in the CSE percentage of solved cases out of the rates of Cabadbaran City and Tandag total number of crime incidents filed, City influenced the region’s total CSE dropped during the fourth quarter of rate. Meanwhile, the CSE rates of 2019. Only 83 percent of the Butuan City and Surigao del Sur total reported crimes in the region during improved by 3 percent and 4 percent, the last quarter of 2019 were solved respectively.

Table 4. Crime Statistics in Caraga PERIOD

LGU Q4 2018 Q4 2019

CV CSE CCE CV CSE CCE Bayugan City 137 78% 94% 133 76% 93% Cabadbaran 56 92% 100% 92 83% 93% City Surigao City 147 68% 87% 208 69% 86% Tandag City 41 85% 97% 55 76% 89% Butuan City 498 85% 92% 413 88% 95% Agusan del 290 90% 93% 359 91% 95% Norte Agusan del 574 87% 93% 501 88% 92% Sur Surigao del 356 86% 92% 472 84% 93% Norte Surigao del 482 84% 92% 406 88% 92% Sur Dinagat 59 92% 97% 67 91% 94% Island Caraga 2,640 85% 94% 2,218 83% 92% Source: PNP Caraga

DEVELOPMENT PROSPECTS

Agriculture Development the nine engineering district offices in the region. 7 • Increase in the Caraga’s palm oil output due to the proposed initial 3 Crismundo, M. (2020, January 8). 50,000-hectare palm oil plantation to be developed in Caraga region. Retrieved from development of a 50,000-hectare https://www.farmlandgrab.org/post/view/29398- palm oil plantation in Northeastern 50-000-hectare-palm-oil-plantation-to-be-developed-in- 3 caraga-region. Mindanao. 4 Lopez, A. (2020, January 22). 15 diversion dams to further • boost Caraga’s palay production. Retrieved from Completion and rehabilitation of https://www.pna.gov.ph/articles/1091527. fifteen (15) small-scale irrigation 5 Department of Agrarian Reform Agusan Del Sur. (2020, systems in different provinces in the February 18). DAR turns-over P17-M worth of farm Caraga Region that will directly machineries to AgSur farmers. Retrieved from 4 https://pia.gov.ph/news/articles/1034732. benefit palay farmers. 6 Lopez, A. (2020, January 17). $96-M project seen to boost agri-based MSME growth in Caraga. Retrieved from • Increased agricultural output in https://www.pna.gov.ph/articles/1091172. Agusan del Sur as a result of 7 Lopez, A. (2020, January 8). Caraga to get P19.7-B infra Department of Agrarian Reform’s projects: DPWH. Retrieved from (DAR) provision of PhP 17 Million https://www.pna.gov.ph/articles/1090300.

worth of machineries and equipment 5 to Agusan del Sur farmers.

• Development for small farmers and micro, small, and medium enterprises (MSMEs) due to the implementation of the USD 96 Million worth of Rural Agro- Enterprise Partnership for Inclusive Development and Growth projects, in cooperation with the International Fund for Agricultural Development. 6

Infrastructure Development

• Implementation of a total of 207 infrastructure projects in the region amounting to PhP 19.7 Billion. This is a a result of the Department of Public Works and Highways’ (DPWH) undertaking of 57 of the infrastructure projects worth PhP 10.1 Billion across the region while the rest of the 150 projects totaling PhP 9.2 Billion will be distributed to