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A Snapshot of the Regional Economy

2017 2018
Indicator 2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
Consumer Price 111.5 112.0 112.6 113.7 114.5
Index
(2012=100)
Inflation Rate 4.0 3.7 2.8 2.0 2.7
(%)(2012=100)
Employment 93.3 93.3 92.9 94.0 94.6
Rate (%)
Underemploym 9.7 10.3 10.0 11.5 13.8
ent Rate (%)
Palay 1,119,454 287,696 1,553,435 679,557 1,128,907
Production (MT)
Second Quarter Corn Production 119,195 22,270 5,041 124,654 122,317
(MT)
2018 Livestock 100,690 107,107 158,977 116,013 109,392
Production1 (MT)
Poultry 198,690 177,097 194,089 197,799 208,135
Production2 (MT)
Fisheries (MT) 83,176 39,825 71,828 92,187 97,199

Foreign 782.6 1257.2 1,722.5 351.3 2,663.4


Investments
(PhP Million)
1 Totals of Carabao, Cattle, Hog and Goat
2 Totals of Chicken, Duck, Chicken Eggs and Duck Eggs

The table above presents the key economic indicators in Central Luzon
from second quarter of 2017 to second quarter of 2018.

The region’s consumer price index (CPI) slightly increased to 114.5 in the
second quarter of 2018, from 111.5 in the same quarter of 2017. On the
other hand, the inflation rate decelerated by 1.3 percent, from 4
percent in the second quarter of 2017 to 2.7 percent in the second
quarter of 2018.

The labor market showed mixed performance. Employment rate inched


up to 94.6 percent in April 2018 from 94.0 and 93.3, in January of 2018
and April 2017, respectively. On the other hand, underemployment rate
in the region continued its upward course to 13.8 percent in April 2018
from 9.7 percent in April 2017.

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In agriculture, palay, corn, livestock, poultry and fisheries production posted
improvements during the quarter. Palay production in the second quarter reached
1.13 million metric tons, an increase of 0.84 percent from the same quarter in 2017. The
region remained the top palay producing region in the country accounting for 28%
of national production. Production of corn, livestock, and poultry increased 2.62
percent, 8.64 percent, and 4.57 percent, respectively. Furthermore, the fisheries sector
bounced back in the second quarter of 2018 with 16.86 percent production increase
over the same quarter the previous year.

A great influx of investment pledges was recorded this period as the total approved
foreign investments spiked to 2.7 billion marking a two-fold increase from 782 million
recorded in the same quarter of the previous year.

DRIVERS OF CENTRAL LUZON’S ECONOMY

I. PRICES AND INFLATION

The overall inflation rate slightly accelerated to 2.7 percent in the second
quarter, up 0.4 percentage points from 2.3 percent in the first quarter but still
slower compared to 3.7 percent inflation posted in same period of 2017.

Alcoholic beverages and tobacco index registered the highest inflation rate of
12.2 percent among the commodity groups which is 5.1 percentage points
higher than that of the second quarter 2017. Notable price increases were also
observed in the food and non-alcoholic beverages, recreation and
transportation indices (Table 1.).

For the period January to June 2018 (Figure 1.), the region consistently sustained
an inflation rate below the national average. The increasing level of prices may
be attributed to the surge in global oil prices, weakening of the peso, and tight
supply of local commodities such as rice and vegetables.

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Table 1. CPI and Inflation Rates: Central Luzon
Second Quarter 2017 to Second Quarter 2018
Commodity Group 2017 2018
(2012=100) 2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
Average CPI 111.5 112.0 112.6 113.7 114.5
Average Inflation Rate 3.7 2.9 2.2 2.3 2.7
I. Food and Non-Alcoholic 3.1 2.9 2.8 3.7 4.1
Beverages
II. Alcoholic Beverages and 7.1 5.7 4.3 8.6 12.2
Tobacco
III. Clothing and Footwear 9.3 5.2 2.7 1.0 1.0
IV. Housing, Water, Electricity, Gas 4.2 1.2 0.3 -0.6 -0.6
and Other Fuels
V. Furnishings, Household 1.8 1.2 0.8 1.1 1.4
Equipment and Routine
Maintenance of the House
VI. Health 6.9 4.0 2.6 0.3 0.4
VII. Transport 3.5 3.2 2.2 3.2 5.3
VIII. Communication 0.4 0.3 0.3 0.3 0.3
IX. Recreation and Culture 5.6 10.6 7.7 5.4 5.0
X. Education 2.2 8.2 5.2 3.9 3.8
XI. Restaurants and 2.7 2.7 1.8 1.6 1.5
Miscellaneous Goods and
Services
Source: Philippine Statistics Authority

Figure 1. Inflation Rate by Month: Central Luzon


January 2018 to June 2018 (2012 Base Year
6.0 5.2
4.5 4.6
5.0 4.3
3.8
4.0 3.4
2.8 3.0
3.0 2.4 2.6
1.9 2.1
2.0

1.0

0.0
Jan Feb Mar Apr May Jun
Central Luzon Philippines
Source: Philippine Statistics Authority

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Four of the seven provinces in the region, namely: Aurora, Pampanga, Tarlac
and Zambales recorded inflation rates higher than the regional average. For
the second consecutive quarter, Bulacan recorded the lowest inflation rate
among the provinces at 1.5 percent.

Table 2. Inflation Rate by Province: Central Luzon


Second Quarter 2017 to Second Quarter 2018 (2012 Base Year)

2017 2018
REGION/
2nd 3rd 4th 1st 2nd
PROVINCE
Quarter Quarter Quarter Quarter Quarter
CENTRAL
LUZON 3.7 2.8 2.0 2.2 2.7
Aurora 4.5 5.5 5.0 4.2 5.0
Bataan 3.2 2.4 2.2 2.1 2.1
Bulacan 6.9 3.9 2.3 1.1 1.5
Nueva Ecija 0.8 1.5 1.1 1.7 2.7
Pampanga 2.4 2.0 1.8 2.6 2.8
Tarlac 2.0 2.3 1.9 3.5 5.0
Zambales 3.4 3.3 3.4 3.8 4.5
Source: Philippine Statistics Authority

Figure 2. Inflation Rate by Province: Central Luzon,


Second Quarter 2017 and 2018 (2012 Base Year)
8
6.9
7

6
5 5
5 4.5 4.5

4 3.7
3.2 3.4
2.7 2.8
3 2.7 2.4
2.1
2 1.5
2
0.8
1

0
Central Luzon Aurora Bataan Bulacan Nueva Ecija Pampanga Tarlac Zambales

2017 2018

Source: Philippine Statistics Authority

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II. EMPLOYMENT

The labor market situation in April 2018 showed showed mixed performance.
(Table 3.) A quarter-to-quarter comparison showed that the employment rate
increased from 93.3 percent to 94.6 percent. This entailed a 1.3 percentage
point reduction on the unemployment rate, from 6.7 percent to 5.4 percent.
The underemployment rate, however, increased from 9.7 percent to 13.7
percent which may mean that employees decide to extend their working
hours and/or have additional jobs to earn extra income to cope with the
increasing prices of commodities in the local market.

Table 3. Employment, Unemployment and Underemployment Rates:


Central Luzon, January 2017 to January 2018

2017 2018
Indicator April July October January AprilP
Population 15 years 7,719 7,794 7,849 7,853 7,810
and Over (‘000)
Labor Force (‘000) 4,433 4,719 4,614 4,769 4,704
Employed (‘000) 4,135 4,385 4,338 4,511 4,451
Unemployed (‘000) 298 335 276 257 253
Underemployed 401 451 435 517 612
(‘000)
Labor Force 57.4 60.5 58.8 60.7 60.2
Participation Rate
Employment Rate 93.3 92.9 94.0 94.6 94.6
Unemployment Rate 6.7 7.1 6.0 5.4 5.4
Underemployment 9.7 10.3 10.0 11.5 13.8
Rate
` PPreliminary Data
Source: Philippine Statistics Authority – Labor Force Survey

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III. AGRICULTURAL PRODUCTION

Crops – Palay and Corn

Central Luzon remains the top Figure 3. Second Quarter 2018 Palay
contributor of palay in the country Share per Region (Top 5)
for this quarter. The 1,128,907 (Source: PSA - Countrystat)

metric tons (MT) it produced


accounted for about 28 percent of
28%
the national palay output (Figure CENTRAL LUZON 32%
3). CAGAYAN VALLEY
BICOL REGION
More than half of the region’s CARAGA
palay originated from Nueva Ecija
EASTERN VISAYAS
which produced 778,448 MT or
OTHER REGIONS 6%
equivalent to 68.96 percent of the 18%
regional output. 7%
9%
The increase in palay production of Aurora, Bataan, Pampanga, Tarlac and
Zambales contributed to the increase in the overall palay production of
Central Luzon by 0.84 percent which may feed an additional 82,921 persons.

Table 4. Palay Production by Province: Central Luzon


First Quarter 2017 to First Quarter 2018 (In Metric Tons)
2017 2018 Percent Percent
Region/ Change Share
2nd 3rd 4th 1st 2nd
Province Q2 2017- To
Quarter Quarter Quarter Quarter Quarter
Q2 2018 Region
CENTRAL 1,119,454 287,696 1,553,435 679,557 1,128,907 0.84% 100%
LUZON
Aurora 36,678 28,186 12,378 18,268 40,413 10.18% 3.58%
Bataan 18,240 12,436 51,904 47,999 20,744 13.73% 1.84%
Bulacan 83,292 22,146 174,958 100,559 78,976 -5.18% 7.00%
Nueva 788,956 132,956 807,471 166,275 778,448 -1.33% 68.96%
Ecija
Pampanga 94,615 33,973 148,597 153,615 94,684 0.07% 8.39%
Tarlac 80,835 51,725 277,374 174,107 91,338 12.99% 8.09%
Zambales 16,838 6,274 80,753 18,734 24,304 44.34% 2.15%
Source: Philippine Statistics Authority – Country Stat

Corn production also increased by 2.62 percent this quarter, from 119, 195 MT
to 122, 317 MT. The 4.9 percent increase in Tarlac, the top contributor of corn in
the region with a 34.58 percent share, was enough to make up for the decline
in production recorded in Aurora and Nueva Ecija.

Remarkably, corn production in Zambales for the second quarter of 2018


recorded five times more than its total output during the same quarter of the

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previous year. However, the province’s share to the regional output was only
1.84 percent.

Table 5. Corn Production by Province: Central Luzon


First Quarter 2017 to First Quarter 2018 (In Metric Tons)
2017 2018 Percent Percent
Region/ Change Share
2nd 3rd 4th 1st 2nd
Province Q2 2017- To
Quarter Quarter Quarter Quarter Quarter
Q2 2018 Region
CENTRAL 119,195 22,270 5,041 124,654 122,317 2.62% 100%
LUZON
Aurora 9,066 3,992 2,547 6,140 7,221 -20.35% 5.90%
Bataan 2,089 920 934 3,582 1,747 -16.37% 1.43%
Bulacan 1,839 37 78 3,246 2,475 34.58% 2.02%
Nueva 15,669 11,738 867 11,042 15,310 -2.29% 12.52%
Ecija
Pampanga 30,170 1,624 307 32,310 30,388 0.72% 24.84%
Tarlac 59,987 3,851 198 67,675 62,926 4.90% 51.45%
Zambales 375 108 110 659 2,250 500.00% 1.84%
Source: Philippine Statistics Authority – Country Stat

Livestock and Poultry

The total inventory of livestock this quarter increased by 8.6 percent, from
100,690 MT to 109,392 MT (Table 6.). According to the PSA report, the sustained
demand of hog triggered the increase in production this quarter. On the other
hand, the decline in goat production was attributable to the lower marketable
stocks of goat as well as the reported drop in the local demand of chevon.

The total poultry production also increased from 198,690 MT to 208,135 MT this
quarter (Table 6.). All poultry commodities except for Duck recorded increases.
PSA reported that the expansion of broiler farm capacity, resumption of farm
operations, and improvement of farm facilities and opening of new
commercial broiler farms in Central Luzon contributed to the increase in
chicken production. PSA also noted that the better egg-laying efficiency and
expansion of layer commercial farms help improve chicken egg production.
The decline in duck production on the other hand could be attributed to the
closure of some duck farms in the region.

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Table 6.Volume of Production in Livestock and Poultry, By Animal Type: Central Luzon
First Quarter 2017 to First Quarter 2018 (In Metric Tons)
2017 2018 Percent
Change
Livestock 2nd 3rd 4th 1st 2nd
Q2 2017 –
Quarter Quarter Quarter Quarter Quarter
Q2 2018
Carabao 2,020 1,155 1,488 1, 174 2,123 5.10
Cattle 3,875 4,064 4,524 3,886 4,087 5.47
Hog 93,030 99,610 150,311 109,400 101,748 9.37
Goat 1,765 2,278 2,654 2,727 1,434 (18.75)
TOTAL 100,690 107,107 158,977 116,013 109,392 8.64
2017 2018 Percent
Change
Poultry 2nd 3rd 4th 1st 2nd
Q2 2017 –
Quarter Quarter Quarter Quarter Quarter
Q2 2018
Chicken 168,984 145,211 159,917 162,321 176,890 4.68
Duck 1,434 2,851 3,181 4,013 1,374 (4.18)
Chicken Eggs 23,330 25,148 26,548 27,533 24,950 6.94
Duck Eggs 4,942 3,887 4,443 3,912 4,921 0.42
TOTAL 198,690 177,097 194,089 197,779 208,135 4.57
Source: Philippine Statistics Authority – Country Stat

Fisheries

Overall fisheries production increased by 16.86 percent from the 83,176 MT


harvest in 2017 to 97,199 MT this quarter (Table 7.). This was primarily driven by
increases on the municipal and aquaculture subsectors at 26.03 percent and
16.15 percent, respectively.

Based on PSA report, more harvests in the aquaculture subsector particularly


of tilapia were attributed to the high quality of fingerlings stocked, feeds used
and water pumps provided by the Bureau of Fisheries and Aquatic Resources
(BFAR).

Table 7. Volume of Production in Fisheries: Central Luzon


Second Quarter 2017 to Second Quarter 2018 (In Metric Tons)
2017 2018 Percent
Change
Subsector 2nd 3rd 4th 1st 2nd
Q2 2017 –
Quarter Quarter Quarter Quarter Quarter
Q2 2018
CENTRAL 83,176 39,825 71,828 92,187 97,199 16.86
LUZON
Commercial 994.68 2,459 1,194 873 834 (16.15)
Municipal 9,239 10,872 9,714 14,400 11,644 26.03
Aquaculture 72,942 26,494 60,920 76,914 84,721 16.15
Source: Philippine Statistics Authority – Country Stat

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IV. INVESTMENTS

The second quarter of 2018 showed an upsurge in total approved foreign


investments. According to the PSA, approved foreign investments this quarter
reached a three year high. Overall the total approved foreign investments in
the country increased by 70.4 percent, from PhP 18.2 billion in the second
quarter of the previous year up to 30.9 billion this year (Table 8.).

The manufacturing sector registered the largest share of approved investments


this quarter. This amounted to PhP 12.1 billion or about 41.5 percent of the total
investment pledges. This was followed by construction with investment pledges
valued at PhP 7.1 billion or 23 percent of the total pledges.

PSA also reported that Central Luzon is the third highest recipient of investments
next to National Capital Region (NCR) and CALABARZON. The region hauled
PhP 4.3 billion worth of investments which is 13.9 percent of the national total
of PhP30.9 billion this quarter.

Among the investment promotion agencies located in the region, Subic Bay
Metropolitan Authority (SBMA) managed to have more investment pledges
amounting to PhP 657.6 million, almost ten times its PhP 62.4 million total from
the same quarter in 2017 (Table 8). The Clark Development Corporation also
got higher influx of investments recording investment pledges worth 2 billion
which is almost four times the pledges it recorded during the second quarter of
2017.

Table 8. Total Approved Foreign Investments by Investment Promotion Agency in


Central Luzon, First Quarter 2017 to First Quarter 2018 (In Million Pesos)
2017 2018 Percent
Investment Promotion Change
2nd 3rd 4th 1st 2nd
Agency Q2 2017 –
Quarter Quarter Quarter Quarter Quarter
Q2 2018
Clark Development 441.0 1,063.9 1,568.1 339.8 2,005.8 354.83
Corporation
Subic Bay Metropolitan 62.4 51.1 145.4 11.5 657.6 953.85
Authority
Authority of the Freeport 279.2 142.2 9.0 - -
Area of Bataan*
Total 782.6 1257.2 1722.5 351.3 2,663.4 240.33
Source: Philippine Statistics Authority
*no data submitted

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V. CONSTRUCTION

The total number of constructions generated from approved building permits


for this quarter of 2018 reached 5,028 approximately worth a total of PhP10.09
billion or 35. 93 percent higher than the 3,699 total recorded in the same
quarter of the previous year. This included construction on residential, non-
residential, s, additions, alterations and repairs.

The number of residential and non-residential constructions increased by 38.86


percent and 40.69 percent, respectively.

Table 10. Comparative Construction Statistics from Approved Building Permits:


Central Luzon, First Quarter 2017 to First Quarter 2018

2017 2018 Percent


Change
Type of Construction 2nd 3rd 4th 1st 2nd
Q2 2017-
Quarter Quarter Quarter Quarter Quarter
Q2 2018
Total
Number 3,699 3,642 3,611 3,589 5,028 35.93%
Floor Area (sq. m.) 840,467 914,000 922,758 936,140 1,454,579 73.07%
Value (PHP ‘000) 6,881,120 7,368,355 7,807,708 8,081,807 10,086,091 46.58%
a. Residential
Number 2,545 2,592 2,482 2,453 3,534 38.86%
Floor Area (sq. m.) 338,154 393,695 413,831 400,026 679,843 101.05%
Value (PHP ‘000) 3,252,598 3,297,372 3,843,166 3,825,246 4,557,072 40.11%
b. Non-Residential
Number 671 698 734 735 944 40.69%
Floor Area (sq. m.) 487,655 506,429 480,175 524,387 750,501 53.90%
Value (PHP ‘000) 3,242,569 3,694,821 3,535,138 3,906,173 4,778,873 47.38%
c. Addition
Number 121 81 95 86 114 -5.79%
Floor Area (sq. m.) 14,658 13,876 28,752 11,727 24,235 65.34%
Value (PHP ‘000) 105,728 76,513 178,613 94,216 128,713 21.74%
d. Alteration & Repair
Number 362 334 300 315 436 20.44%
Value (PHP ‘000) 280,225 299,649 250,791 256,172 621,434 121.76%
Source: Philippine Statistics Authority

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