CY 2015 Annual Regional Economic Situationer

The CY 2015 Annual Regional Economic Situationer (ARES) provides a quick snapshot of the performance of Davao Region’s economy in 2015 by highlighting key socioeconomic indicators and assessing their performance vis-à-vis 2014. The ARES also provides a brief development outlook of the Region for 2016.

Macroeconomic Performance

Prices and Inflation

 Prices of basic commodities in Davao Region posted an average of 2.6 percent in 2015, 1 percentage point lower than the level recorded in 2014. The deceleration of inflation could be attributed to downward adjustments in petroleum products.

The prices of electricity, gas and fuels declined by 2 percent compared to the 2014 levels. The drop in the prices of this commodity group was more evident in the frequent downward adjustments in the prices of gasoline, diesel, and kerosene which decreased by totals of PhP16.60 per liter, PhP15.20 per liter, and PhP17.05 per liter, respectively. These price rollbacks were relatively larger than the total price increases for the year of PhP16.30 per liter for gasoline, PhP13 per liter for diesel, and PhP12.04 per liter for kerosene; resulting to net rollbacks of PhP0.30 per liter, PhP2.20 per liter, and PhP4.65 per liter, respectively. Moreover, the total price rollback for LPG of PhP15.90 per kilogram exceeded the total price increase of PhP5.50 per kilogram for the year, which resulted to net rollback of PhP10.40 per kilogram.

However, even with substantial decreases in the prices of fuels, the prices of other major commodities increased. The price index of food items increased by 3.5 percent compared to its year-ago rates. Prices of major food commodities such as rice, corn, bread and cereals, meat, fish, and vegetables increased by 2.9 percent, 6.6 percent, 3.6 percent, 2.8 percent, 3 percent, and 3.9 percent, respectively.

Price hikes in food items registered higher in the second quarter of the year due to lower supply of these commodities in the market as the Region experienced drought in the months of April and May in 2015.

Aside from food, the prices of alcoholic beverages and tobacco and clothing and footwear; as well as the costs of health, transport, communication and education also increased by 5.4 percent, 3.5 percent, 2.6 percent, 1.6 percent, 0.3 percent, and 4 percent, respectively.

Overall, the performance of the all-item regional inflation rate for the year fell within the range of 3 percent, plus or minus 1 percentage point, set for CY 2015 by the Development Budget Coordinating Committee (DBCC) of the NEDA Board.

Labor and Employment

 The Region’s employment statistics for 2015 were relatively unchanged compared to the rates in 2014. The average employment rate for 2015 of 94.2 percent remained constant compared to its rate a year ago. While the unemployment rate slightly increased by 0.09 percentage point, from an average of 5.78 percent in 2014 to 5.87 percent in 2015.

The slight increase in the unemployment rate was attributed to the influx of new graduates looking for employment. This is evidenced by the slight increase of the labor force for the year, from an average of 2,862,500 in 2014 to 2,906,250 in 2015, a difference of 43,750 or 1.5 percent. In addition, Davao Region’s constant employment rate could still be considered positive as it indicates that Davao Region’s economy was able to provide a steady number of jobs despite the increased number of workers in the labor market.

Breaking down employment by major industry group, the services sector had the highest share among the Region’s total employed persons with 53 percent, followed by agriculture with 34 percent, and industry with 13 percent. In services, most of the employed engaged in wholesale and retail trade, repair of motor vehicles, and transportation.

In the case of the Region’s underemployment, it was noted that the average underemployment rate for 2015 of 18.98 percent was 0.30 percentage point lower than 2014’s 19.28 percent. The slight dip in underemployment indicates that there were more number of part-time workers that were able to secure more regular jobs, with working hours of at least 40 hours a week. This improvement could be attributed to intensified programs such as skills development vocational courses and aligning academe curricula to the needs of the Region’s industries.

Investments

Investments in the Region, both in project commitments and value of private building construction, registered a substantial decline in 2015.

BOI project commitments declined by 61.2 percent, from PhP12.5 billion in 2014 to PhP4.9 billion in 2015. The decline in project commitments could be attributed to reduced energy and logistics-related projects which contributed a substantial share in 2014. Most of the project commitments for 2015 were registered in the fourth quarter of the year, which constituted about 65 percent of the total project commitments. Some of the biggest project commitments were the PhP2.56 billion solar power project of the Enfinity Philippines Renewable Resources, Inc. in Digos City; the PhP169.3 million wood pellets production project of Starbridge Global Corporation in Tagum City; and the PhP167.1 million palm oil development and production project of Palm Asia Milling Corporation in Matanao, Davao del Sur.

Similarly, the total value of private building construction of PhP11.1 billion was 8.9 percent lower than 2014’s PhP12.2 billion. Breaking down its components, construction for residential purposes declined by 17.9 percent, from PhP4.3 billion in 2014 to PhP3.6 billion in 2015; while repairs dropped to PhP997.4 million, 26.5 percent less than 2014’s PhP1.4 billion. On the other hand, construction for commercial purposes slightly increased by 0.8 percent, from PhP6.49 billion in 2014 to PhP6.54 billion in 2015. The decline in residential construction projects could be attributed to lesser projects during the year as big housing projects in previous years were in the final stages of completion. While the slight increase in commercial construction could be attributed to establishment of big shopping malls in major cities of the Region.

Accounting the share, construction for commercial purposes remains the biggest among private building projects in the Region which constituted 58.9 percent of the entire construction projects, followed by construction for residential purposes with 32.1 percent, and repairs with 9 percent.

Some of the notable real estate projects during the year were the hotel and accommodation facility project of Gohotels Davao, Inc. in Lanang, Davao City; the office complex construction of Davao City Water District in Matina, Davao City; and the commercial building construction of the Sta. Lucia Land, Inc. in Maa, Davao City. Other notable projects were the mass housing projects of Johndorf Ventures Corporation in Brgy. Sasa; Davao Joyful Homes Realty Corporation in Brgy. Cabantian Road, Buhangin District; and Deca Homes in Tugbok, all in Davao City.

In other cities of the Region, major projects were the construction of berthing facility and container depot by TADECO, Inc. in Panabo Port, Panabo City; construction of Robinsons Mall by Robinsons Land Corporation in Tagum City; 4-storey classroom project of Immaculate Heart of Mary Academy in Mati City; and the construction of Gaisano Mall by Tagum Commercial and Realty Corporation in Digos City.

Exports and Imports

The Region’s performance in foreign trade declined in terms of value of transactions in 2015 compared with the value recorded in 2014.

Davao Region’s exports contracted sharply by 43.9 percent, with export value declining from US$2.2 billion in 2014 to US$1.2 billion in 2015. Desiccated coconut recorded the biggest drop of 66.9 percent, from US$111.6 million in 2014 to US$37 million in 2015. Slightly behind desiccated coconut was banana, which declined 62.8 percent, reaching only an export value of US$392 million in 2015 compared to 2014’s US$1.05 billion. Other commodities with significant declines were pineapples and copra or coconut crude oil with declines of 38.8 percent and 24.5 percent, respectively. Pineapple’s export value declined from US$100.4 million in 2014 to US$61.5 million in 2015; while copra declined from US$331.2 million in 2014 to US$245 million in 2015.

For coconut-based products, one of the reasons for the decline was the cutting of old trees in Davao del Norte, Davao Oriental and Davao del Sur.  In addition, there were also recorded cases of coconut-scale insects or cocolisap infestation which affected the production this year. In the case of copra or coconut oil, the drop in demand in the world market was attributed to the widening price gap between copra and palm kernel oil. The average international market price of copra of US$1,144 per metric ton was significantly higher than palm kernel oil’s average price of US$840 per metric ton.

For banana, the slide in exports was due to the declining consumer demand from its major destinations including Japan, South Korea, China and Europe. For Japan, the low level of banana exports continued to be partly attributed to the stiff import tariffs for Philippine bananas, which ranged from 8.5 percent to as high as 18 percent. The high cost of Philippine bananas compelled Japanese importers to strike deals with competing suppliers from Latin America and Southeast Asia where import tariffs were lower. Moreover, the weak performance of banana exports may also be the result of the economic slowdown that Japan experienced in 2015. For China, economic adjustments such as currency devaluation affected the performance of Philippine bananas. The continued devaluation of the yuan resulted to reduced purchases, as Chinese importers had to pay more dollars for the bananas that they bought. In addition, the territorial dispute over the West Philippine Sea was also considered by some banana players to have contributed in the decline of banana exports. In the case of Europe, the unsteady demand could be attributed to the recovery of the area from the debt crisis in Greece.

Locally, the lower exports performance of the Region was also due to the lingering effects of El Niño, which severely affected the production capacity and quality of produce in agri-based production areas. The El Niño phenomenon started in September 2015 and is expected to last until May 2016.

The Region’s top ten exports for 2015 were (1) banana; (2) copra or coconut crude oil; (3) activated carbon; (4) refined (cochin) or fraction of unrefined oil and refined, bleached and deodorized (RBD) oil; (5) fresh pineapple; (6) prepared or preserved lychee, longans, jackfruit, mangoes, etc; (7) natural rubber used in air dried sheets and remilled crepes; (8) desiccated coconut; (9) wood charcoal (including shell or nut charcoal); and (10) prepared or preserved pineapples. The Region’s top export markets were Japan, the Netherlands, USA China and Korea.

On the other hand, the Region’s imports rose by 47.1 percent. Its value during the year reached US$1.7 billion, compared to US$1.2 billion in 2014. The rise was driven by imports of raw materials or intermediate goods, capital goods, consumer goods, and mineral fuels and lubricants. The Region’s top five imports were (1) medium oils such as lamp kerosene, aviation turbine fuel and lubricating oils; (2) light oils such as motor spirit, premium leaded, unleaded and regular; (3) Boxes, cases, and crates; (4) urea; and (5) semi-chemical fluting paper.

The major sources of Davao Region’s imports were China, Taiwan, Japan, USA, Vietnam, and Indonesia. The value of imports from China, the Region’s biggest source of imports, amounted to US$427.6 million, which was 97.1 percent higher than 2014’s US$217 million.

 Davao Region’s Economic Growth Drivers

Tourism

 Tourist arrivals in Davao Region during the year have considerably surpassed those recorded in 2014. The domestic tourist arrivals reached 2,649,625 and surpassed 2014’s 2,380,104 by 11.3 percent. More notably, overseas Filipino tourist arrivals grew by 107 percent, from 7,102 in 2014 to 14,699 in 2015; while foreign tourist arrivals increased by 26.5 percent or 36,486 more foreign tourists than 2014’s 137,679. Overall, the total volume of tourists reached 2,838,489 with a total tourist receipts value of Php 34.2 billion, surpassing 2014’s tourist receipts by almost Php 9 billion or 32.7 percent.

 Breaking down the volume of tourist arrivals per province, Compostela Valley achieved the highest growth for the year with 84.4 percent, from 112,079 tourists in 2014 to 206,648 tourists in 2015.  Following Compostela Valley was Davao del Norte with a growth of 19 percent, from 581,903 tourists in 2014 to 692,145 tourists in 2015. Davao City also grew by 13.1 percent, reaching 1,730,009 tourists in 2015 compared to 2014’s 1,529,907 tourists. Meanwhile, Davao del Sur and Davao Oriental declined by 57.9 percent and 28 percent, respectively, compared to their volume of tourist arrivals a year ago. Davao del Sur declined to 9,834 tourists, from 23,364 tourists in 2014; while Davao Oriental declined to 199,853 tourists, from 277,542 tourists in 2014.

As to the share of provinces to the total value of tourist receipts, Davao City contributed a PhP26.2 billion tourist receipt value or 76.9 percent; followed by Davao del Norte with PhP6.3 billion or 18.4 percent contribution; next by Davao Oriental with PhP899.3 million or 2.6 percent contribution; then by Compostela Valley with PhP619.9 million or 1.8 percent contribution; and Davao del Sur with PhP88.5 million or 0.3 percent contribution.

The remarkable performance of the tourism sector was credited to the extensive tourism promotions such as the conduct of festivals and events regionwide. The major festivals during the year were the Kadawayan Festival and Pasko Fiesta in Davao City; Durian Festival and Musikahan Festival in Tagum City; Kariyawan Festival in Monkayo, Compostela Valley and Dinawag Festival in Montevista, Compostela Valley; Sambuokan and Pujada Bay Festivals in Mati City; Binulig Festival in Panabo City; and Padigosan Festival in  Digos  City. Several conventions were also hosted by the Region which included the Livex 2nd National Congress, the 2nd Le Maste Congress, the Prosecutors League National Convention, the PREX Convention, the Knights  of  Columbus  10th  National  Convention, the 2015 Palarong  Pambansa, the Institute  of  Integrated  Electrical  Engineers  National  Convention, the Philippine Institute of Civil Engineers Convention, the Philippine Councilors  League Convention,  Laag ta Uy  Tour  in Compostela Valley, Amihan  sa  Dahican  in Davao  Oriental and the Davao International Expo 2015.

 

Agriculture

Crops

For major crops and fruits, increased production was recorded for banana, durian, mango, rubber, abaca and cacao. Declines, however, were noted for palay, corn, pineapple, coconut, coffee and sugarcane.

Output growth for cacao recorded the highest for the year with 12.7 percent, from 4,366 metric tons in 2014 to 4,920 metric tons in 2015. The increase in production was due to additional bearing trees and increased area harvested in Davao del Sur, Davao del Norte, Compostela Valley and Davao City.

Next to cacao was durian which grew by 7.9 percent or 4,930 metric tons more than Q3 2014’s 62,769 metric tons. The output growth in durian could be attributed to the increased number of bearing trees in Davao del Norte and Davao del Sur.

Other crops with output growth during the year were banana, mango, rubber and abaca which grew by 2.6 percent, 1.2 percent, 5.1 percent and 2.1 percent, respectively. For banana, the increased production was attributed to increased harvest area and bearing hills in all the Region’s provinces. Similarly, for rubber and abaca, growth in output was attributed to the increased harvest area and tapped trees in Compostela Valley, Davao City, Davao del Norte, and Davao Oriental. In the case of mango, the hot weather in the first quarter of 2015 favored the production in Davao City. The harvest area in Davao del Norte had also expanded during the year.

On the other hand, major crops such as corn and palay recorded substantial declines during the year. Corn output declined to 224,100 metric tons, 20.1 percent lower than 2014’s output of 280,293 metric tons; while palay declined by 2.30 percent, from 452,267 metric tons in 2014 to 441,868 metric tons in 2015. For corn, the reduced yield was due to hot weather and insufficient rainfall especially in the latter months of the year when the El Niño phenomenon started to intensify. Similarly, output decline in palay was attributed to hot weather which affected the rainfed areas in Davao City. Delayed cropping in Davao del Norte, Compostela Valley and Davao del Sur; as well as the damaged irrigation systems in Davao del Norte and delayed release of water from NIA in Compostela Valley, were among the reasons for the decreased production in 2015.

However, the crop with the biggest output decline in 2015 was sugarcane with its output reaching only 208,743 metric tons, 37.8 percent lower than its output in 2014 of 335,684 metric tons.  The main reason for the decline was the low harvesting in the latter months of 2015, as bulk harvesting of sugarcane in Davao del Sur was moved in January of 2016.

Other crops that experienced declines in output were pineapple, coconut, and coffee which dropped by 4.3 percent, 1.8 percent, and 1 percent, respectively. For pineapple, the output decline was due to decreased harvest area in Davao City. While for coconut, the decrease was attributed to the cutting of old trees in Davao del Sur and Davao del Norte. And for coffee, the slight dip was due to crop shifting to cavendish in Compestela Valley and lacatan, latundan and cacao in Davao City.

Logistics

Air Transport

The air transport sector showed positive growth in 2015 over its performance the previous year. Passenger traffic, both inbound and outbound, at the Francisco Bangoy International Airport (FBIA) increased by 9.47 percent, from 2,928,267 passengers in 2014 to 3,205,705 passengers in 2015. Similarly, there were more flights during the year with 22,112 or 13 percent more than the previous year’s. The substantial increases in the number of flights and passenger traffic were attributed to the continued growth of the Region’s tourism sector with more tourists visiting throughout the year.

However, inbound and outbound cargo, both for foreign and domestic destinations, showed that 22,112 metric tons passed through the Francisco Bangoy International Airport in 2015, which was 1.3 percent lower compared with the total cargo volume in 2014. The slight decline in air cargo traffic was consistent with the lower performance of Davao Region’s exports during the year.

Road Paving

For road paving, DPWH XI accomplished 92.3 percent of the 836.215-kilometer target of national arterial roads paved by 2016. This accomplishment was 2.3 percentage points higher than 2014’s accomplishment of 90.1 percent. The total length accomplished for the year reached 772.045 kilometers.

Similarly, accomplishment on the paving of national secondary roads also grew by 12.2 percentage points; reaching 83.7 percent accomplishment of its target of 819.038 kilometers by 2016, compared to only 71.5 percent in 2014.

The substantial progress in road paving projects was due to the prioritization to complete all roadwork projects before the end of 2016.

Power

Power supply in Davao Region, and in Mindanao as a whole, was relatively erratic in 2015, especially in the second quarter of the year. This scenario was almost similar to 2014 where power shortages heavily occurred in the latter part of the first quarter and in the second quarter of that year.

Mindanao Grid’s average power reserve for 2015 was 48 megawatts, with the average available capacity of 1,416 megawatts surpassing the demand of 1,368 megawatts. This power reserve was slightly higher than 2014’s average power reserve of 31 megawatts, which was the difference between 2014’s average available capacity of 1,312 megawatts and its demand of 1,281 megawatts.

One of the reasons for the inadequate power supply in the second quarter was the the low water levels at the main hydroelectric plants in Mindanao such as the Agus 1 and Agus 6 Plants located in Marawi City and Iligan City, respectively.

In Davao Region, numerous power outages occurred not only in the second quarter but also in the latter part of the third quarter to the fourth quarter of the year. These frequent brownouts were compounded by the low power supply in the Region as additional power sources such as the 150-MW of Therma South Inc. (TSI) coal-fired power plant Unit 1 commenced operation only in September 2015 while the 150-MW TSI Unit 2 underwent reliability tests for the remainder of the year.

Meanwhile, another energy project that was in the final stages of completion in 2015 was the San Miguel Consolidated Power Corporation Coal-Fired Power Plant Project, which was expected to provide an additional 300 MW of power.

Social Investment and Protection

 A total of 231,756 households had been covered under the banner Pantawid Pamilyang Pilipino Program (4Ps) in the Region in 2015. This was 2.9 percent higher than the 225,176 households that benefited from the poverty reduction program in 2014. Most of the households were found in Davao del Sur, Compostela Valley and Davao del Norte.

The higher accomplishment was due to the expansion of the program which now covers 0-18 years-old children, thus, there were beneficiaries whose inclusion in the program were extended.  Previously, family beneficiaries whose children reached the age of 15 were graduated from the program; however, a change in the policy reincluded those families in the High School Extension Program of the 4Ps.

Breaking down the growth per province, Davao del Norte recorded the highest growth of households covered at 7.5 percent, followed by Compostela Valley at 7.1 percent, Davao Oriental at 3.6 percent, and Davao City at 1.1 percent. On the other hand, Davao del Sur’s beneficiaries declined by 3.4 percent.

However, majority of the beneficiaries were still located in Davao del Sur which constituted 27 percent of the total beneficiaries, followed by Compostela Valley with a share of 24 percent, Davao del Norte with 21 percent, Davao Oriental with 18 percent, and Davao City with 9 percent of the beneficiaries.

 Security Management

The Region’s crime solution efficiency rate rose significantly from 49.12 percent in 2014 to 64.73 percent in 2015, up by 15.61 percentage points. Decreases were also recorded for total crime volume, with both index and non-index crimes reduced to 50,510 in 2015, which was 22.4 percent lower than what was recorded in 2014. In terms of crime solution efficiency by province, Davao City achieved the highest rate at 78.88 percent, followed by Davao del Norte with 73.93 percent, Compostela Valley with 51.39 percent, Davao del Sur with 42.91 percent and Davao Oriental with 37.73 percent efficiency rate.

 

The improvement in crime solution efficiency, as well as the relative decrease in crime volume, were attributed to intensified law enforcement operations through increased visibility of mobile patrols in crime-prone and highly-crowded areas. Moreover, anti-crime campaigns such as the Oplan Lambat-Sibat, implemented in the later part of 2015, helped in the prevention of crime. The Oplan Lambat-Sibat is a reinvigorated crime prevention effort using “deliberate, programmatic and sustained” police operations such as the establishment of checkpoints, strengthened campaign against loose firearms and the full implementation of mobile and foot patrols that aim to improve crime prevention and enhance crime solution efficiency.

Development Outlook

 Opportunities

In investments, Davao City ranked high and was considered one of the biggest movers in the Asia Pacific Region in the Tholon’s Top 100 Outsourcing Destinations for 2016. Davao City moved three places, from rank 69 in 2015 to rank 66 in 2016. Tholon’s considered Davao City as one of the Philippines’ Next Wave Cities and has risen to become one of the more viable alternative destinations beyond Manila/NCR and Cebu City. Many service providers show increasing interest in the City due to its strategic geographical location and higher feasibility of physical expansion due to its less congested area.

In addition, Davao City was also awarded by the Department of Science and Technology-Information and Communications Technology Office (DOST-ICTO) and the Information Technology and Business Process Association of the Philippines (IBPAP) as the Center of Excellence for Information and Technology- Business Processing Management (IT-BPM) due to its sustained growth throughout the years. The award recognized the City’s position as one of the top IT-BPM hubs in the country and considered at par with other IT juggernauts like Cebu City, Metro Clark, Metro Bacolod, and Iloilo City.

Aside from IT and BPO, several companies also plan to expand and invest in the manufacturing, services and real estate sectors of the Region this year.  This includes the Php 2.7 billion feed mill plant project of the San Miguel Corporation in Darong, Sta. Cruz, Davao del Sur; and the PhP 11 billion bulk water project of the Apo Agua Infrastructura, Inc. in Davao City. A Luzon-based steel manufacturing company is also set to invest around PhP 1 billion for a construction of a steel plant in Davao City. For real estate, the Euro Towers International, Inc. is planning to invest about P1.5 billion for the development of a residential component and renovation of the Apo View Hotel in Davao City. Similarly, Damosa Land, Inc. (DLI) is also set to develop an 88-hectare mixed-use property project in Panabo City. The first phase, which is a residential component, shall have an initial project cost of around PhP 1 billion. The project also plans to host the Mindanao campus of the University of the Philippines-Los Baños.

In tourism, 13 hotels and restaurants from Davao City shall be awarded with Halal certification by the Halal International Chamber of Commerce and Industries of the Philippines, Inc. Among these establishments include the Marco Polo Davao, Seda Hotel, Grand Regal Hotel, and Park Inn by Radisson-Davao. The certification of these establishments is in line with the Department of Tourism’s Philippine Halal Tourism Project. The project aims to make halal services available to tourist destinations and to increase the number of halal-certified kitchens in the country. Moreover, the project also targets to put the country on the Muslim travel index of Crescent Rating, which is the world’s leading authority on halal-friendly travel.

In addition, the Davao City Council passed a Halal Ordinance, which requires the segregation of halal food from non-halal food in the market. The purpose of the ordinance is to protect and respect the sacred concept of halal and to ensure the spiritual purity and cleanliness of the goods bought by the Muslim constituents. The passage of the said legislation is also expected to boost the city’s bid to become the prime destination of foreign tourists from Islamic countries.

Lastly, economic growth in the Region is expected to be sustained as strong private consumption and election spending during the year is expected to boost growth. In addition, the 8-point economic agenda of the incoming administration, which puts emphasis on the acceleration of infrastructure, foreign investment, agricultural development, job generation, and tax reforms, is expected to stimulate economic development.

Challenges

For the Region’s economy, the Business Expectations Survey of the Bangko Sentral ng Pilipinas- Davao shows that overall business sentiment of the Region for the second quarter of 2016 was less upbeat, with confidence index of the 87 firms surveyed declining to 37.5 percent, down by 4.4 percentage points compared to the previous survey’s result. Some of the reasons for the less optimistic outlook include (1) concerns over the significant decrease in export market prices, (2) impact of El Niño on agriculture, and (3) completion of construction projects in the first half of the year.

However, business firms’ outlook on the volume of business activity and employment prospects were relatively positive in the second quarter. The percentage of the 87 firms surveyed with expansion plans increased to 32.4 percent, 13.9 percentage points higher than the result in the previous survey. These developments suggest that regional economic growth could accelerate in the succeeding quarters of the year.

In agriculture, the Region shall prioritize recovery efforts to address the effects of the El Niño phenomenon, especially in the provinces, cities, and municipalities that were significantly affected by the intense drought. During the height of the El Niño, the provinces of Davao del Sur and Davao del Norte; the cities of Digos and Mati; the municipalities of Hagonoy, Sta. Cruz, Matanao, Magsaysay, Bansalan, Kiblawan, Malalag and Sta. Maria in Davao del Sur; the municipality of Kapalong in Davao del Norte; and the municipalities of Tarragona, San Isidro, Lupon and Banaybanay in Davao Oriental had declared state of calamity.

Specifically, damage to palay production was estimated to have already reached PhP232 million; while estimated losses for corn have amounted to more than PhP154 million. Recorded losses for the two commodities per province were PhP129.5 million for Davao del Norte, PhP110.9 million for Davao del Sur, PhP91.8 million for Davao City, PhP 28.5 million for Compostela Valley, and PhP25.6 million for Davao Oriental.

To address these concerns, the Department of Agriculture XI intensified their programs which include effective water management, provision of open-source pumps, small farm reservoirs and spring development, distribution of plastic water drums, and distribution of drought-tolerant and early maturing corn and rice varieties.

Another challenge is the inadequate power supply due to the onslaught of El Niño and the growing demand of commercial and residential consumers. The operations of Agus and Pulangi Hydropower Complexes (APHC), which supply nearly half of Mindanao’s power requirement are still below operating capacity and are expected to recover only in the second half of 2016.

To ease the low supply of power especially in Davao Region, the full operation of several energy projects have been hastened. These include the San Miguel Consolidated Power Corporation Coal-Fired Power Plant Units 1 and 2 in Malita, Davao del Sur; and the Solar Power Project of Enfinity Philippines Renewable Resources, Inc. in Digos City, Davao del Sur. These projects have a combined rated capacity of about 330 MW and are expected to fully operate before the end of the first semester of 2016.

Other projects in Mindanao targeted to fully operate in 2016 include the Southern Mindanao Coal Fired Power Station Unit 1 in Maasim, Sarangani, the FDC-Misamis CFB Coal-Fired Power Plant Project in Misamis Oriental, and GNPower Kauswagan Clean Coal-Fired Power Plant in Kauswagan, Lanao del Norte. Overall, a total of 19 energy projects were committed in 2016, which are expected to generate an additional 1,853.60 MW of power.

 

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