NCR’s economic output grew 4.9% in 2023

METRO MANILA’s economic output grew 4.9% in 2023, the slowest pace in two years, due to base effects and weaker output from key sectors, the Philippine Statistical Authority (PSA) said Thursday.

Preliminary PSA data on the latest regional accounts showed that the National Capital Region’s (NCR) economic growth slowed sharply in 2023 from 2022’s 7.2% growth.

This was Metro Manila’s weakest economic growth since 2021’s 4.4%.

NCR growth was also slower than the Philippine gross domestic product (GDP) of 5.5% last year.

“NCR’s growth, while slower, was still in positive territory. An easing from 2022 figures, which reflected the reopening of the economy, was only to be expected,” Paciano B. Dizon, regional director of PSA-NCR, said at the briefing.

He also said base effects are at work as the normalization of the post-pandemic boom becomes evident in GDP growth in 2023.

At constant 2018 prices, NCR’s economy stood at P6.57 trillion last year, up 5% from P6.27 trillion in 2022.

NCR contributed the largest share to the total Philippine economy last year at 31.2%, followed by Calabarzon (14.7% share) and Central Luzon (11%).

All seventeen regions recorded growth in 2023, although slower than the previous year. Eight regions showed economic growth faster than the national average.

Central Visayas was the fastest growing region at 7.3%, up from 7.6% in 2022. This was followed by Western Visayas at 7.2% (from 9.3%) and the Ilocos Region at 7.1% (was 7.6%).

Meanwhile, Soccsksargen recorded the slowest growth among the regions at 3.5% in 2023, down from 6.6% in 2022. It was followed by the Bangsamoro Autonomous Region in Muslim Mindanao (4.3% from 6.6%) and the Bicol region (4.6% of 8%). and the Zamboanga Peninsula (4.6% versus 7.5%).

Metro Manila’s economy was mainly driven by services, which accounted for 82.7% of the economy. The services sector rose 5.7% last year, a slowdown from 8.2% in 2022.

Wholesale and retail trade, which accounted for over a quarter of the services sector, grew by 4.4% in 2023, down from 7.2% in 2022.

Financial and insurance activities, which account for 24% of services, grew by 8% last year, compared to 7.1% in 2022. Growth in professional and business services slowed to 5.8% from 9.6% in 2022 last year.

Meanwhile, manufacturing, which accounted for 17.3% of the NCR economy, grew 1.3% last year, slower than 3.2% in 2022.

Agriculture, which accounted for 0.01% of NCR’s economy, was the only major sector to show annual growth. Agriculture grew by 5.4% in 2023, compared to 3.5% in 2022.

“Contribute to [NCR’s] The slowdown in growth despite the country’s full reopening includes inflationary pressures amid high policy rates,” Security Bank Corp. Chief Economist Robert Dan J. Roces said. in a Viber message.

The Monetary Board has raised borrowing costs by 450 basis points from May 2022 to October 2023, taking the policy rate to a near 17-year high of 6.5%. Overall inflation averaged 6% last year.

“(NCR) growth is slower than it should be due to higher interest rates, market volatility and supply chain constraints,” said John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc., said in a Viber message.

Measured by sectoral output, Western Visayas saw the fastest growth in services, reaching 10.2% last year, but slower than 13% in 2022. This was followed by the Cordillera Administrative Region (8.9% from 10.9%) and Mimaropa (8.8% of 11.7%).

Cagayan Valley led the industrial sector last year with a growth of 8.5%, up from 11.5% in 2022.

Central Visayas recorded the fastest growth in agricultural production at 8%, reversing the previous year’s 4.7% contraction.

On the expenditure side, BARMM recorded the highest growth in household expenditure (7.5% versus 6.2%).

Government expenditure growth was fastest in Northern Mindanao, at 4.3% last year, up from 4.2%.

Western Visayas saw the fastest growth in gross capital formation, the investment component of the region’s economy, at 12.9% last year. This was still lower than the 14.8% in 2022.

NCR remained the largest gross regional domestic product (GRDP) last year at EUR 460,969 per capita, up 3.8% from EUR 443,976 in 2022.

“Looking ahead, the [NCR’s] The GRDP is expected to accelerate on the back of resilient commercial activity, higher spending on public infrastructure and the growth of digital financial services,” Mr. Roces said, “provided inflation is managed effectively.”

PSA will release April inflation data on May 7. Andrea C. Abestano