Gross Regional Domestic Product (GRDP) is a unit to measure the economic performance of a region. It covers the value of goods and services produced in a region.
The GRDP includes the regional estimates on the three major industries of the economy including their sub-industries. The three major industries are Agriculture, Forestry and Fishing (AFF), Industry, and Services.
The GRDP is presented in nominal and real terms. Nominal GRDP measures the value of the outputs of the economy at current prices while real GRDP or at constant prices measure the value of economic outputs using the prices of a fixed base year. The GRDP is usually reported in real terms or constant prices since the effects of inflation are removed.
CAR’s economy declines by -9.9% in 2020
- The economy of the Cordillera Administrative Region (CAR) had a drastic decrease from the 4.4 percent growth in 2019 to -9.9 percent growth in 2020. All three major industries contributed to this decrease in CAR’s economy. Agriculture, Forestry and Fishing (AFF) declined by -2.2 percent, Industry posted a -12.3 percent decrease, and Services sector plunged -10.1 percent.
Figure 1 CAR GRDP: 2018-2020
(At Constant 2018 Prices, In Thousand Pesos)
Services industry declines deeper with -10.1% contraction
- The Services industry decreased from a positive growth of 6.8 percent in 2019 to a drastic - 10.1 percent in 2020. Most of the Services sub-industries declined in 2020, except for Financial and Insurance Activities that grew by 8.2%. Its share to total GRDP was 11.8%, the third biggest share of the total economic output of CAR.
- The second highest increase was Human Health and Social Work Activities with 6.7% growth rate, followed by Information and Communication with 4.1% growth, and Public Administration and Defense; Compulsory Social Activities with 1.1% growth.
Table 1 GRDP Grwoth Rates, CAR 2018-2019 and 2019-2020
Services Sector (A t Constant 2018 Prices)
- Other Services, which include but are not limited to arts, entertainment and recreation, barbershops, salons, and funeral parlors, recorded the biggest decline among all subindustries with 51.4% contraction. But take note this sub-industry contributed only 1.0% to the total GRDP of CAR with an output of 2.9 billion pesos in 2020.
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Accommodation and Food Service Activities contracted 49.0%. The share of the subindustry was 6.1% in 2019, down to 3.4% in 2020. Its output declined from 19.6 billion pesos in 2019 to 10.0 billion pesos in 2020. This subindustry pulled down the region’s economy by 3.0 percentage points, hence, the biggest contributor to the decline of the region’s economy.
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Transportation and Storage also declined by 26.6%. Its share to total GRDP was 2.1%. This was the result of the pandemic impeding the movement of tourists or people to CAR, affecting these sub-industries.
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Real Estate and Ownership of Dwellings declined by 16.1% and Education by 11.4%. Other industries that declined were Trade (-5.7%) and Professional and Business Services (-4.2%).
Services comprise 66.3% of CAR’s economy
- CAR shifted from being industry-driven to being services-driven back in 2018. This shift in economic distribution was evident still in 2020 as the region’s total output was mainly from the Services with 66.3% share. Industry sector contributed less than half of that with 23.6% which was a decrease in contribution to 2019’s Industry percent share of 24.3%. Meanwhile, the AFF contributed 10.1%.
- The distribution of sub-industries in the Services sector showed that Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (Trade) had the biggest share with at 27.8% which was higher than the previous year’s 17.6% share. Financial and Insurance Activities followed with 11.8% which was an increase from the previous year of 9.8% share.
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Real Estate and Ownership of Dwellings contributed 11.6% to the total Services output, while Professional and Business Services shared 8.8%.
Contribution to growth
- Services contributed most to the region’s economic contraction with 6.7 percentage points. Industry further slowed down the regional economy by 3.0 percentage points and Agriculture, Forestry, and Fishing contributed less than a percent to the overal decline of the Cordillera economy in 2020.
Table 2 GRDP Contribution to Growth CAR:2020
(A t Constant 2018 Prices)
CAR performance versus other regions
- CAR ranked 13th, among 17 regions, with a GRDP growth rate of -9.9 percent. This was a slightly higher rank than in 2019 in which the region ranked 15th with a GRDP growth rate of 4.4%.
- Among the regions, CAR’s services sector ranked 14th out of 17 with a growth rate of -10.1% in 2020.
