With Mindanao taking a hit from the COVID-19 pandemic, authorities need to ensure it is better prepared for any crisis, restore economic and development gains, and fortify measures to secure peace and order, which are key to stronger trade ties in the BIMP-EAGA subregion, said a new report.
Located in the southern part of the Philippine archipelago, Mindanao has strong historical trade links with North Sulawesi and Sabah in the Greater Sulu–Sulawesi maritime corridor.
A report jointly produced by UNDP Philippines and the Mindanao Development Authority (MinDA), COVID-19 Socio-Economic Impact Assessment in Mindanao: Strengthening Recovery Towards Peace and Development in the Six Regions, noted that the pandemic has slowed Mindanao’s economy, increased unemployment, and disrupted the peace process. There is a need to review economic and development targets to ensure resilient recovery. The study was made to inform the updating of the Mindanao 2020 Peace and Development Framework Plan.
At the height of the crisis, Mindanao’s gross regional domestic product (GRDP) contracted by 5.6% in 2020 as strict quarantine and lockdowns slowed economic activity, the report said. Its economy was growing at an average of more than 6% between 2015 and 2019.
All regions in Mindanao reported negative growth rates for 2019 to 2020, with the Davao Region, which has the largest economy, posting the largest dip. Industry-wise, the transportation and storage, accommodation, and food service industries were the most affected.
The report does not cover Mindanao’s economic performance in 2021. According to MinDA, the economy is getting back on its feet and expanded by 6.3% last year, thanks to the government’s re-opening strategy and increased public investment in priority infrastructure projects. “The solid growth momentum came mainly from the industry sector due to the positive growth recovery of all its subsectors—manufacturing, construction, and mining and quarrying,” said MinDA Secretary Maria Belen S. Acosta in a Facebook post.
MinDA has put in place an economic recovery agenda that identified innovative solutions, along with equitable digitalization among the emerging sectors, to support Mindanao’s recovery in the new normal.
The Board of Investments also recorded 8.36 billion Philippine pesos ($159.6 million) worth of investment projects in Mindanao for 2021, translating to more than 5,000 new jobs.
MinDA is confident Mindanao can achieve 7% to 8% growth this year as it anticipates an influx of foreign capital investments, further opening of borders, and businesses operating at full capacity.
Similarly, the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) posted strong economic growth in 2021, with a 7.5% expansion, which was the second-fastest growth among all regions in the country. Health, mining and quarrying, accommodation and food services, construction, and financial services saw the highest growth rates.
Bangsamoro Planning and Development Authority Director General Mohajirin Ali said the region’s economic performance proved that BARMM is on track with its recovery efforts. “This demonstrates again that we are now waving the dividend of peace and we must keep the momentum as we are going for the BARMM advancement program, aimed at accelerating the socio-economic recovery and sustaining progress toward poverty reduction and economic growth.”
The number of unemployed increased. Between 2010 and 2020, the region posted a 2% decline in employment. In the wake of the pandemic, the annual unemployment rate rose by 6.4%.
The pandemic also disrupted the peace process as the implementation of peace-building programs, activities, and legislation were halted as authorities prioritized COVID-19 response. Budget for peace initiatives was diverted to address the pandemic. “Although there was relative peace and security within the communities, delays in implementing various peace programs negatively affected the progress in securing peace in the regions,” the report said. As a result, the number of encounters between government forces and rebel groups, clan wars, bombings, and killings increased.
Small businesses were also not spared. The report said about 71% of small businesses in Region 13 closed in 2020. Region 13 includes Agusan del Norte, Agusan del Sur, Dinagat Islands, Surigao del Norte, and Surigao del Sur. During the extended community quarantine, 98% of affected establishments in the Davao Region consisted of micro, small, and medium-sized businesses. The Davao Region covers Davao del Sur, Davao del Norte, Davao Oriental, Davao Occidental and Compostela Valley.
According to the report, the pandemic has stalled efforts to meet economic and development targets.
The impact assessment report used data from business and household surveys. Respondents in many regions in Mindanao believed that their vulnerability increased because of the COVID-19 crisis.
Although the government provided financial support to households, the survey revealed that there were households that were unable to get aid because they were not eligible nor registered. Some were unaware of the assistance.
Food security was affected as households with members who lost livelihoods or jobs coped by skipping meals. More than 50% of those polled said the situation persisted until June 2021.
Mobility restrictions and limited access to services have put more women and children at risk during the pandemic, the report said. An increase in cases of domestic violence and sexual assaults have been recorded. Trafficking has become more creative and daring with the perpetrators using social media platforms.
In education, school dropouts continue because of limited funds, inadequate access to technology, fear of contracting COVID-19, or having no access to a mentor.
Role in BIMP-EAGA
With its abundant natural resources, Mindanao has good potential for trade and ecotourism and prospects for finance and logistics in relation to BIMP-EAGA as long as relative peace and security are sustained, the report said. It said Davao Region’s emerging infrastructure, strategic location in the southeastern economic corridor of BIMP-EAGA, and relatively low-cost labor and production are key to growing trade ties with BIMP-EAGA.
The report also cited the relevance of Region 12, which covers Cotabato, Sarangani, South Cotabato, and Sultan Kudarat, as it is situated at the tip of the Mindanao mainland and that puts it right in proximity to the Greater Sulu–Sulawesi Corridor. In the past, the region’s economy has expanded due to the abundance of marine and land resources, emerging infrastructure, relative low cost of labor and production, relative peace and security, ecotourism potential, and proximity to the Davao Region.
The BIMP-EAGA corridor that includes Mindanao covers four routes: Palawan–Sabah, Zamboanga Peninsula–Sabah (including Basilan, Sulu and Tawi-Tawi in the Philippines), Davao (Davao del Sur), and General Santos–North Sulawesi. The corridor is the nerve center of barter trade in BIMP-EAGA, particularly in agriculture and aquaculture products.
The report made the following recommendations:
• Prioritize adoption of disaster risk reduction and resilience framework and the implementation of emergency and recovery responses to COVID-19.
• Keep track of targets under the framework plan and focus on three areas: the households and the community, the industries and enterprises sector, and governance and policy environment.
• Implement short-term measures to respond to the immediate socioeconomic impact to ensure continuity of basic social services, prevent the bankruptcy of critical businesses, and provide social protection for the most vulnerable.
• Restore the economy and support people’s resilience through fiscal stimulus, employment retention schemes, economic stimulus governance and social protection systems, including cash transfers, tax relief, waivers, concessions and subsidies, psychosocial support programs, social protection for the most vulnerable, and compensation for loss of informal employment, among others.
• Put in place long-term measures that address poverty, hunger, lack of education, homelessness, poor health, and nutrition.