WESM, SLEX and Low Bank Lending Pulling Down Bikol's Economic Momentum -- Salceda

LEGAZPI CITY , Aug. 17 -- The Bikol region, despite being tagged the fastest growing region in the country, still faces the negative impact of a dysfunctional political economy manifested in the spikes in power rates, transportation tollway fee hike, and the low bank lending to Small, Medium Enterprises (SMEs).

Albay Gov. Joey S. Salceda, in presenting the region's economic outlook, said the region's sustained economic development is being blocked by the Wholesale Energy Spot Market (WESM), SLEX tollway fee hike, and the non-availment of bank loans, making the region's loans to deposit ratio very low.

Salceda said the region's economic growth should have gained headway if not for WESM's and SLEX spikes in spot prices and toll way fees hike that siphoned some P1.3 billion (P940 million on WESM and P400 million on SLEX) on the region's small economy.

Moreover, the hard-earned deposits of Bikolanos have grown to P53 billion but total loans amounted to only P13 billion, resulting in a P40 billion net resource outflow, making the region's loans to deposit ratio very low.

Salceda, the Regional Development Council (RDC) chair, expressed optimism that despite the odds, the region has plodded to keep pushing development on into the remotest villages, saying "when Bikolanos are angry, they fight."

In 2009, the region registered an 8.2% growth, fastest for any region in a national economy that limped at a pace 1.1%.

And this year, "our development strategy is likely to deliver 12.4 percent Gross Domestic Product (GDP), fuelled by mining, energy development, tourism, agro-processing and Business Process Outsourcing (BPOs).

BIR collections in Bikol leapt by 36% in first half of this year demonstrating to the rest of the country and to the national leadership that, unlike NCR, economic growth in Bikol generates more, he stressed.

Salceda stressed that the region's positive growth indicates that from the state mandate of social redistribution, the national government should invest in the regions and the countryside because it yields more revenues for the country,

"The positive indicators make economic sense for the national government to invest in the regions," he said.

He said since the government accounts for only 17% of GDP, the big role falls upon the private sector, especially the local conglomerates and domestic enterprises, must contribute to this effort of spreading the benefits of free markets to the countryside.

He cited that during the term of President Cory, San Miguel aggressively undertook a regional dispersion of its industrial and logistical facilities.

Bangko Sentral ng Pilipinas (BSP) Gov. Armando Tetangco is taking a right approach to strictly enforce the new agri-agra law in order to compel NCR conglomerates to expand into the countryside with no incremental fiscal incentives, Salceda said. (PNA)