UNDERSTANDING THE ECONOMY: DEEPENING THE KNOWLEDGE

Interview with the Economists Presented to MR. NASH REGINIO Faculty-in-charge, College of Governance and Business University of Southeastern Philippines Bo. Obrero, Davao City

In Partial Fulfilment of the Requirements For the course, Economics 106, Advance/Intermediate Macroeconomics

Group 3 BA 3-2

March 13, 2013

Alana O. San Pedro

Senior Economic Development Specialist National Economic and Development Authority Regional Office XI, Davao City

Ms. Alana Ongchua-San Pedro is a Senior Economic Development Specialist assigned at the Plan and Policy Formulation Division (PPFD) of the National Economic and Development Authority, Region Office XI. She is involved in the formulation and monitoring of socioeconomic plans; formulation and evaluation of policy that have anticipated regional development impact; provision of technical assistance to local Government Units on regional development planning. In line with this, she was directly involved in the formulation of the Updated Regional Development Plan, 2008-2010; Regional Physical Framework Plan, 2003-2030; and Davao Regional Development Plan, 2011-2016. She also prepares quarterly economic situationers that serve as bases for planning and decision-making by both government and private sectors.

Within 17 years of working in NEDA XI, she has attended various trainings related to macroeconomic surveillance and land use planning. She has extensive trainings and experiences along the line of Disaster Risk Reduction and Climate Change Adaptation or DRR/CCA, as she handles the NEDA project on integrating DRR/CCA in SubNational Development Planning. Before joining NEDA XI in 1995, Ms. San Pedro worked for the Department of Trade and Industry in Cotabato City and later in Davao City. Her 10 years of service in DTI gave her an opportunity to obtain trainings and exposures in local and export trade promotions. She also had a research on High Cost of Domestic Shipping (NEDA, 2010, elevated to the RDCom-Mindanao and NB-RDCom) and pricing estimation and supply for printed materials. Ms. San Pedro graduated at the Notre Dame University in Cotabato City with the degree of Bachelor of Arts in Economics.

GROUP 3 Face to face with

Alana Ongchua-San Pedro

Group 3: What is the role of NEDA? San Pedro: NEDA is the highest planning body of the government. As such, it is responsible performance for of assessing the country the and San Pedro: For 2010 and 2011, Davao region is the biggest economy in Mindanao and has topped in terms of value of output or GRDP in the whole Mindanao. But in terms of GRDP growth rate, it was 2nd highest in 2010 and 3rd in 2011, among Mindanao regions. In 2011, the service sector has contributed 51.6% of our GRDP, followed by the Industry sector and agriculture, industry, fishery and forestry with almost flat growth rates. Group 3: How does the government respond to natural disasters such as San Pedro: GRDP at constant prices takes out the inflationary pressures and irregularities, thus, it is more stable when compared to other years in review. In addition, using the current prices would be more risky. During the Arroyo Administration, the President preferred to use GDP or GRDP at current prices. Perhaps to reflect higher economic figures. San Pedro: The government Reduction has and designated the National and Regional Disaster Risk Management Councils (N/RDRRMCs) to spearhead efforts for the mitigation, preparedness, relief and recovery and rehabilitation in the event of natural typhoons and floods? What are the plans of the government for the said matter? Group 3: What is the value of the GRDP for Davao region? What sectors are the growth economy? drivers of the regional

disseminating them to the public and the business sector for planning and decision-making. NEDA also ensures that appropriate policies are put in place so that priority projects can be effectively implemented. The national income accounts reflect the performance of the country and usually, the government uses the economic figures in real terms or GRDP at constant prices. Group 3: Why not the current?

and man-made disasters. NEDA is a member of these Councils and Chairs the Recovery and Rehabilitation Committee. The various committees have crafted various strategies to effect these interventions. NEDA partners with the Local Chief Executives such as Governors and Mayors for the implementation of the disaster risk reduction plans in the local level as it is where implementation is most crucial. Group 3: How does the increase in population affect the economy? San Pedro: The population of Davao region is still manageable so there is no large negative effect. Population growth will not be a problem as long as our GRDP/GDP growth rate is much higher than the population. If you achieve that then you will be sure that the economy has the absorptive capacity to provide jobs and individuals will have a higher family incomes that will eventually reduce poverty. Group 3: How does the theory of AS-AD applied in the assessment of the economy? San Pedro: Theoretically, the Aggregate Supply (AS)-Aggregate Demand (AD) theory is interpreted in the National Income Accounts (NIA) as published by

NSCB. The production approach of the NIA reflects the supply side while the expenditure approach reflects the demand side. In the supply side, the GVA by industrial origin is used in the NIA to record the economic output of an economy. Aggregate supply sums the whole output in the region. If we say firm level, it only talks about the micro level in the economy. In the macro level, they measure all the output of the firms in a particular economy, and then sum it all for the whole economy. Group 3: How typhoon Pablo did affect our GRDP? San Pedro: The devastation brought about by Typhoon Pablo will certainly have negative effects on the outputs of the agriculture sector, which is the most vulnerable to disasters and climate change. The impact to GRDP will have to be ascertained when we simulate the value of damages and losses to an impact analysis. As of January, the value of damages for banana plantations in Davao alone is already at P3.5 billion. Add to this the then damages you can in only infrastructure,

imagine its impact in the economy since it disrupted economic activities.

When I went to Comval, the farmers have already harvested their crops and rice. So its a good thing that they harvested before typhoon Pablo. However, the coconut farms were not saved so these will heavily reflect on the GRDP for 2013. Group 3: Did our unemployment rate decrease? San Pedro: Over the years, the regions unemployment rate hovered to 6 to 7%. This did not significantly increase since employment generation as reflected by the employment rate were sustained at higher levels. We should understand that unemployment is not only influenced by people out of work. You also have to consider the reason they are unemployed. Maybe some of them are not willing to work; also the mismatch of workers qualification from the companys skill requirements in a worker. If this is the case, then it would be impossible for some people to be employed. Statistically speaking, 1 out of every 3 employed persons are considered unskilled and are categorized as laborers. Group 3: How can the people feel the growth in our GDP?

San Pedro: Ideally and theoretically, through the concept of Inclusive growth, all sectors of society should be felt by all sectors of society especially by the marginalized sector, the poor. The Department of Social Welfare and Development (DSWD) is very focused in terms of providing social protection, SSS and 4Ps to the poor. If the economic growth of Davao Region is sustained at high levels and almost all people, especially the poor, are able to obtain social protection benefits, then we can say, to a certain extent, that the benefits of growth trickled down or has been felt by the masses, especially the poor. Group 3: What advices can you give to business economics majors like us? San Pedro: Study hard. Work well. Later you will realize that it is very much useful not just in your occupation but also in your own life. Whether you will be company presidents or plain housewives in the future, you will still need to apply economics in your personal lives that is the judicious allocation of scarce resources. Maging kuripot ka na!(youll be thrifty). More important is not to be complacent with just being employees, but start your own business to help the economy provide jobs. In this way, you can be productive citizens of this nation.