BUSINESSES in Central Visayas will continue to expand for the remainder of the year, according to the latest outlook of the National and Economic Development Authority (Neda) 7.
This is because establishments have adjusted and have become adaptable to the ever-changing quarantine restrictions and varying threats brought about by the Covid-19 pandemic.
Neda 7 said efforts by establishments to reconfigure and innovate their businesses have allowed them to meet the demand of the “new normal.”
“This means expectations of increased economic activities in the near term,” the agency said.
As businesses continue to improve, labor market conditions will likely perk up.
“The Bangko Sentral ng Pilipinas’ Business Expectations Survey for the fourth quarter affirms this view of an improved employment environment, up from last (second) quarter. The higher positive reading suggests that firms are looking forward to hiring more people for the fourth quarter of 2021,” Neda 7 said.
Forecast for inflation, meanwhile, is anticipated to continue its upward trend until the end of the year as demand picks up with the upcoming holidays.
“Prices of many items have long been held at their current levels (for almost two years), that there is an inclination to allow prices of some items to go up a bit,” it said.
Neda 7 noted that most of 2021 was marked by rising inflation rates. Only in June did it slow down. October inflation was the highest recorded for the year so far at 3.8 percent, still lower than the government’s high end target of four percent.
Average inflation rate of the region in the first 10 months of 2021 or from January to October was 2.12 percent, just .01 percentage point lower than the 2.13 percent inflation registered for the same period in 2020. The rate was also substantially lower than the national average from January to October 2021 of 4.5 percent.
Moreover, Neda 7 also warned of La Niña to continue to prevail and likely bring rains over Central Visayas in December and in the first quarter of 2022.
“This could affect agriculture production especially if logistical concerns in the provision of inputs remain,” it said.
Outbreaks of pests due to weather variability, and outbreaks of diseases, in particular the African swine fever and bird flu, are also threats that could weigh down on agriculture production in 2022.
Foreign trade, real estate
As for foreign trade, Neda 7 said it is seen to remain upbeat as the global economy continues to recover and to scale up operation.
“The outlook of importers is more optimistic while that of exporters are less buoyant as shortage of space in vessels and rising cost of shipping are expected to continue to weigh down on exports,” it noted.
Export earnings of the region were up by four percent from last year’s third quarter earnings. Import payments in the third quarter of 2021 rose by 41 percent from last year’s import payments.
As a result of the faster growth of imports vis-a-vis exports, Neda 7 said the balance of trade deficit in goods of the region from January to August of 2021 reached US$2.084 billion, from only $949 million in the same period last year.
Business outlook in the construction and real estate industries, on the other hand, are more buoyant for the rest of the year.
Neda 7 noted that major players, especially in the real estate sector see growth momentum accelerating in the last half of the year on the back of sustained demand from buyers across all spectrum.
“As a result, the sector is gearing up for the development of new projects and to raise inventories in anticipation of another round of robust selling,” it said.