01
Overview of Regional
Economy, Development
Context, and Trends
CHAPTER 1
Overview of Regional
Economy, Development
Context, and Trends
Central Luzon fared well from 2016 through 2019 because of its strong foundation for robust
economic growth and sustainable development. However, this picture of a vibrant Central Luzon
economy was dramatically altered when the COVID-19 pandemic was declared in March 2020.
The region’s macroeconomic performance has all the regions, even higher than the National
been sound, stable, and well-functioning since Capital Region (NCR).
2016. The growth of gross regional domestic
product (GRDP) averaged 7.8 percent during Despite the grim scenario, the year 2021 was
the 2016-2019 period, placing Central Luzon a year filled with promise and optimism. It
among the fastest-growing regions in the commenced with an upbeat outlook despite
country. concerns about the resurgence of COVID-19
cases after the government bolstered efforts to
Like the rest of the country, Central Luzon close vaccination deployment gaps and provide
suffered from the impact of the pandemic and policy support to accelerate socioeconomic
the stringent quarantine measures imposed by recovery.
the government to halt the spread of the Corona
Virus Disease (COVID-19), save lives, and In the same year, the region’s economy indicated
afford the public health sector enough time and strength, with businesses and households
resources to respond effectively to the problem. demonstrating a remarkable volume of
The value of GRDP (at constant 2018 prices) activities. The value of GRDP (at constant
in the year 2020, estimated at PHP 1.88 trillion 2018 prices) reached PHP 2.02 trillion pesos,
pesos, contracted by 13.9 percent relative to the representing a 7.4 percent increase relative to
2019 figure. The decline was the highest among 2020.
The economy of Central Luzon is expected to quickly recuperate and to get
back on top of the business cycle.
Growth is poised to maintain its full vigor rate ranging from 10 percent to 11 percent as
and ideal pace at a rate of 9.3 percent as the events in the external environment, such as the
essential sectors of the region augur for higher reduction of global oil prices, and appreciation
productivity levels. of the peso ensue.
The industry sector is envisaged to lead the The services sector of the region is forecast to
economy’s expansion and to sustain a growth kick into higher gear and exhibit growth between
Chapter 1 Overview of Regional Economy, Development Context, and Trends | 5
7 percent and 8 percent in the coming years as pace. The results of the Labor Force Survey
industry players uncover huge potentials for from January 2021 – October 2022 indicated a
increasing value-added in outputs, as well as declining unemployment rate — far from the
deepening participation in global value chains. 27.3 percent recorded in April 2020.
Moreover, the agricultural, hunting, forestry, Such positive development heralds the
and fishing (AHFF) sectors will likely reinforce resiliency of the labor market and the regional
the performance of the regional economy. It economy. The positive trend is expected to
is projected that these industries will exhibit a continue as domestic and foreign investments
modest growth rate that will keep up with the in the economic corridors of Bataan, Bulacan,
population progression of Central Luzon. Pampanga and Zambales continue to grow. This
likelihood is boosted as concerned government
Efforts such as (i) rationalization of land use agencies strengthen employment facilitation
allocation; (ii) promotion of value addition services, enhance social protection programs,
on agricultural products; (iii) expansion of and advance formalization processes for the
the forward and backward linkages of the workers of Central Luzon.
agri-fisheries sector with the other sectors;
(iv) advancement of co-operative farming; (v) The region is confident that the percentage of
support for R&D in disaster risk reduction the unemployed will soon reach its natural rate,
and climate change adaptation: and (vi) i.e., between 4 percent and 5 percent — the level
implementation of high-impact projects, such of unemployment when the aggregate labor
as the Balog-Balog Multipurpose Project, are market is in equilibrium, or the state when all
anticipated to accelerate the productivity of the those who want to be employed at the prevailing
AHFF sector to 3.9 percent in the next six years. real wage rate have work. Improvements in
the quality of jobs may be the by-product of
It is expected that inflation shall remain as a unemployment reduction.
manageable macroeconomic concern despite
registering a rate faster than expected during Despite the good news, the fight against poverty
the pandemic. Nevertheless, it is estimated to remains far from over. Deprivation persists in
follow a downward trend and fall within the certain areas of the region. Some segments of
target range of 2 percent to 4 percent set by the the population remain inadequately served
Development Budget Coordination Committee in essential elements of well-being such
(DBCC) in coordination with the Bangko as, education, healthcare, sanitation, social
Sentral ng Pilipinas (BSP). This scenario is protection, safety, and security.
expected as the government continues to
execute monetary and non-monetary measures Based on the 2021 Full Year Official Poverty
to ensure price stability. Statistics of the Philippines, the poverty
incidence among the population in Central
The implementation of programs and projects, Luzon rose to 11.4 percent from 7.0 percent
designed to improve agricultural productivity in 2018. This double-digit figure illustrates
and reinforce the country’s strategic trade the reversal of the region’s gains in reducing
policies, is foreseen to bring inflation toward poverty due to the pandemic which induced
the goal-consistent path over the medium term. community lockdowns, and consequently,
dried up jobs and other sources of livelihood.
Meanwhile, the region’s labor market is
sustaining recovery at a consistent but gradual
6 | Central Luzon Regional Development Plan 2023-2028
Central Luzon is confident that such concern is gaining solid response from all
levels of government.
New and better inroads against extreme expedite the healing, recovery, and rebuilding
poverty are being done to ensure that the of the economy of Central Luzon. A set of
poorest members of the population will be able legacy projects will be developed to expand
to participate, contribute to, and benefit from the region’s infrastructure base, develop new
the socioeconomic successes of the region. and better industries, increase the productive
capacity of the economy, create jobs, increase
In the near term, the government will push for incomes, and strengthen the investment
the delivery of programs that uplift the lives of climate. These projects are expected to sustain
individuals and households pushed to poverty inclusive growth.
by the pandemic. Concrete actions will be taken
by the public sector to develop the economic The rapid pace of innovation and the
resilience of communities. dynamics of technological flows are expected
to offer good platforms to address the crucial
In the medium and long term, the public sector aspects of poverty and advance balanced and
will pursue critical economic and fiscal reforms sustainable socioeconomic development. Their
to support the region’s poverty reduction advent infuses renewed vigour to capacitate
strategy. Both the National Economic and communities and re-energize the regional
Development Authority (NEDA) and the economy.
Regional Development Council III (RDC 3) will
support policy reforms that will: (i) enhance The next wave of the digital revolution will
available resources for social services, poverty introduce a range of technologies such
alleviation, and infrastructure development; as artificial intelligence, genome editing,
(ii) maintain price stability to protect the poor augmented reality, robotics, 3-D printing,
from the negative impact of increasing food mobile supercomputing, and many others
prices; (iii) improve the investment climate; and that will transform how people in our society
(iv) engage the private sector in the formulation communicate, learn, entertain themselves and
of collective and coordinated response to the relate to one another. It will likewise bring
problem of indigency. systemic change that will impact many sectors
and aspects of human lives, particularly the way
Strategic core initiatives under the ‘’Build individuals create, exchange, and distribute
Better More” program will be executed to value.
The medium-term socioeconomic outlook for Central Luzon is generally
favorable. Economic rebound will be more sustainable, balanced, and inclusive
in the coming years. Individuals and communities will be more resilient.
The economic momentum is forecast to gain Domestic policies are geared towards
ground early in 2023 as the general price level addressing inequality and fostering economic
is seen to stabilize and as the employment inclusion. These policies expand access to
situation continually improves. This situation quality education and healthcare for the poor,
will accelerate private consumer spending. investments in infrastructure, measures for
Chapter 1 Overview of Regional Economy, Development Context, and Trends | 7
financial inclusion to reach the most vulnerable, secure position. It will continue to strengthen
and incentives to increase female labor force the ability of the region’s populace and
participation, thereby boosting productivity communities to prepare and plan for, absorb,
and ensuring that future economic expansions recover from, and more successfully adapt to
will not come at the expense of equality. disaster-related risks, conflicts, shocks, stresses,
and uncertainties. Thus, the region is confident
Critical attributes such as enhanced capacity, that it can withstand threats and crises, recoup
good governance, available resources, broad and protect the gains of development it achieved
infrastructure base, and better social safety nets in recent decades.
place Central Luzon in a much safer and more
Table 1-1: Table of Headline Indicators
BASELINE ANNUAL TARGETS MEANS OF
INDICATOR
(YEAR) 2023 2024 2025 2026 2027 2028 VERIFICATION
National
Gross regional Accounts of
domestic product 7.4% the Philippines
6.2 - 9.3 6.2 - 9.3 6.2 - 9.3 6.2 - 9.3 6.2 - 9.3 6.2 - 9.3
(GRDP) (growth (year 2021) (NAP); Philippine
rate, %) increased Statistics
Authority (PSA)
Unemployment 5.0 Labor Force
4.0 – 5.0 4.0 – 5.0 4.0 – 5.0 4.0 – 5.0 4.0 – 5.0 4.0 – 5.0
rate (%) decreased (year 2022) Survey (LFS), PSA
Poverty incidence Family Income
11.4
(% of population) 9.43 8.44 7.46 6.47 5.59 4.50 and Expenditure
(year 2021)
reduced Survey (FIES), PSA
Food inflation rate 5.6
2.5–4.5 2.0–4.0 2.0–4.0 2.0–4.0 2.0–4.0 2.0–4.0 PSA
(%) kept stable (year 2022)
Headline inflation
6.5
rate (%) kept 2.5–4.5 2.0–4.0 2.0–4.0 2.0–4.0 2.0–4.0 2.0–4.0 PSA
(year 2022)
stable
8 | Central Luzon Regional Development Plan 2023-2028
