BOHOL AFFECTED BY ECONOMIC SLUMP

By BINGO P. DEJARESCO III

Bohol has also been somewhat affected by the overall slowdown of the Philippine economy in 2011, according to two bankers in town.

The Philippine economy slackened – reflected by a weakened GDP (Gross Domestic Product) growth rate in 2011 of 3.8%, down from an over 7% growth in 2010, an election year.

“The demand for loans province-wide is estimated to have reduced by 5-10% last year for various reasons”, according to Deo R. Butawan, vice president of the Bohol Bankers Association of the Philippines and senior manager/cluster head of the Bank of Philippine Islands here.

The spending confidence level has been stymied a bit and the enormous drop in infrastructure spending by government has slowed down business activities nationwide. In Manila, it was admitted by Budget Head Butch Abad that government had deliberately slowed down spending “to make sure that every centavo is spent wisely”.

Thus, aside from the usual provincial government spending and the P70-million “pork barrel” of each congressman and the local LGUs, not much additional DBM-driven spending has been noted. According to Butawan, he has heard of complaints from the LGUs that the IRA allocation has been reduced in 2011thus “slowing economic activities in Bohol”.

The BPI stalwart’s findings were confirmed by Chito Glovasa, manager (sales officer) of UCPB (United Coconut Planters Bank), who said that although his bank had noted a 15% rise in deposit levels in 2011, it was more of people not “spending or investing much in Bohol businesses”. They were content in just keeping their hard-earned money in the shelter of bank security. This is not always good sign of progress.

DEPOSIT AND

REMITTANCES

Bohol which is known to have at least a province-wide deposit level of P13 billion had shown some slackening in deposit increases of about 5% in 2011 according to the CPA-BPI Cluster Head.

“The weakening of remittances because of the slowdown in Europe, trouble in the Middle East and Europe had somehow affected the flow of remittances. There was also attrition (reduction) in the number of employed OFWs due to political and economic troubles abroad which offset the new entrants as freshly-hired OFWs”, he said.

The exchange rate between the dollar and the pesos had dropped from three years ago – level of P50: $1 to today’s P42:$1.  That means Boholanos received less pesos for every dollar of remittance compared to three years back. The inflation rate also increased the prices of goods every year. This represented “double trouble” for depositors.

WHAT AUGURS FOR 2012?

Butawan, however, expressed optimism that 2012 will be better economics for the country including Bohol.

For instance, government which has been criticized for “under-spending” is poised to launch P80 billion in the so-called PPP projects including the famous Panglao International Airport project and other pump-priming projects this year.

Aside from that, it seems that there are other markets for OFWs that have opened up for Boholanos based on the application papers BPI had seen for the year 2012, notably Canada.

Compared to other previous years where the preponderant applications for Boholano employment were for the USA, there is a significant number now for “Canada, the Middle East and Europe” Butawan mentioned.  BPI is a known significant private sector partner of government in the OFW industry.

Most of the town mayors are apparently poised to join Gov. Edgar Chatto in aligning their political flags with that of the Liberal Party of the president. This could provide a relatively easier access to discuss projects for national government funding and improve government spending in the province, a prime mover of GDP growth.

The jump starting of the bidding process of the Panglao airport and the upgrading of the Tagbilaran City airport are bound to positively impact the mindset of both foreign and local investors to start bringing their money to Bohol for various businesses, it was noted.