A comprehensive analysis of the macroeconomic performance, sectoral dynamics, poverty trajectory, labor market conditions, and inflationary trends of Caraga Region for the period 2024–2025.
Caraga Region has emerged as one of the Philippines' most dynamic regional economies, registering above-national-average growth for two consecutive years and achieving landmark improvements in poverty reduction and household welfare.
Caraga's regional economy demonstrated remarkable momentum over 2024 and 2025, consistently ranking as the second-fastest-growing economy among the country's 18 regions for two consecutive years. As of June 2026, full-year results for 2026 have not yet been officially reported.
In 2024, Caraga posted a gross regional domestic product (GRDP) growth rate of 6.9%, with a total GRDP value of ₱362.8 billion and a per capita GRDP of approximately ₱124,236. The region's expansion was led by professional and business services, which contributed 14.5% to overall growth, followed closely by accommodation and food services at 13.6%, and construction at 11.9%. In terms of sector composition, services accounted for the largest share at 56.2% of GRDP, with industry contributing 33.2% and agriculture, forestry, and fishing making up the remaining 10.6%. Mining remained a significant component, contributing ₱26.73 billion or 7.4% of GRDP. Among Caraga's provinces, Dinagat Islands recorded the fastest growth at 9.6%. The year also saw a notable import surge of 40.6% and gross capital formation growth of 11.7%.
Growth continued in 2025, with Caraga recording a GRDP expansion of 5.7%, again outpacing the national GDP growth rate of 4.4%. Services remained the dominant sector, growing by 7.2% and accounting for 57.0% of GRDP, equivalent to ₱218.66 billion. Industry grew by 4.8%, while agriculture posted a modest 0.4% increase. Per capita GRDP rose to ₱129,925. Heading into 2026, inflation stood at 3.6% as of February, slightly up from 3.3% in January.
Taken together, Caraga's back-to-back performance underscores the region's sustained economic vitality, driven primarily by a growing services sector, active mining operations, and robust construction activity.
The 2025 supply-side performance reveals a structural shift toward a service-oriented economy, supported by industrial expansion, while the primary agricultural sector continues to face structural bottlenecks despite commodity-level gains.
The services sector served as the primary driver of Caraga's economic expansion in 2025, registering a growth rate of 7.2 percent and accounting for the largest share of regional GRDP at 57.0 percent, valued at approximately PHP 218.66 billion. Within the sector, financial and insurance activities led with an expansion of 24.0 percent, followed by wholesale and retail trade at 20.5 percent, and transportation and storage at 10.7 percent. This rapid expansion reflects a buoyant domestic demand environment, accelerated financial integration, and improved transit corridors linking Butuan City to peripheral economies.
The industrial sector expanded by 4.8 percent in 2025, constituting 32.9 percent of the GRDP (valued at PHP 126.37 billion). Growth within the industrial sub-sectors was highly uneven. Manufacturing led with an expansion of 39.7 percent, followed by construction at 29.3 percent and mining at 22.3 percent. The sharp divergence between these high sub-sector growth rates and the aggregate 4.8 percent figure highlights a significant structural drag from electricity, gas, water supply, and waste management sub-sectors, which were adversely affected by El Niño conditions and severe weather disturbances during the review period.
The primary sector recorded a marginal growth rate of only 0.4 percent in 2025, representing a 10.1 percent share of the regional economy (valued at PHP 38.69 billion). Despite this stagnation in aggregate growth, specific sub-sectors performed well: crop production grew by 53.0 percent, livestock and poultry rose by 21.6 percent, and agricultural support activities expanded by 11.7 percent. However, severe contractions in the forestry and fisheries sub-sectors — attributed to localized weather disturbances and marine ecological pressures — offset these gains. This widening gap between the fast-growing Services sector and the near-stagnant Agriculture sector poses a significant risk for rural-urban inequality.
| Sector | Sub-Sector | Growth Rate | Policy Implications |
|---|---|---|---|
| Services | Financial & Insurance Activities | +24.0% | Signals improving financial access and integration |
| Services | Wholesale & Retail Trade | +20.5% | Buoyant domestic demand; MSME sector growth |
| Services | Transportation & Storage | +10.7% | Infrastructure improvements bearing results |
| Industry | Manufacturing | +39.7% | Key target for DOST technology upgrading programs |
| Industry | Construction | +29.3% | Public infrastructure spending acceleration |
| Industry | Mining & Quarrying | +22.3% | Aligns with FAME Mining sector focus |
| Agriculture | Crop Production | +53.0% | Strong commodity demand; palm oil and rice gains |
| Agriculture | Livestock & Poultry | +21.6% | Native chicken and swine programs performing |
| Agriculture | Fisheries | Negative | Typhoon damage and marine pressures; DOST intervention needed |
The most significant socio-economic achievement of the Caraga Region over the past fifteen years has been its sustained and accelerating reduction in poverty incidence — confirmed to be the most notable improvement among all 18 Philippine regions.
In 2009, Caraga recorded a population poverty incidence of 54.4 percent and a family poverty incidence of 46.0 percent — among the highest in the country. By 2023, these figures declined dramatically to 20.8 percent and 14.9 percent, respectively. This represents a decline of more than 33 percentage points in population poverty over fourteen years, achieving the most notable poverty reduction among all 18 Philippine regions.
The updated 2023 official poverty statistics released in August 2024 confirmed family poverty at 14.9 percent, marking an 11.0 percentage point reduction from the 25.9 percent recorded in 2021 — a remarkable two-year improvement. Caraga's 2023 figures significantly outperformed the medium-term targets set in the Results Matrices, which had aimed for family poverty between 26.0–27.0 percent.
Despite overall progress, significant spatial disparities persist. The Dinagat Islands recorded an increase in family poverty from 30.3 percent (2021) to 30.7 percent (2023), while Agusan del Sur remains the most challenged province with family poverty at 25.9 percent and population poverty at 35.2 percent. These patterns highlight the vulnerability of isolated island economies to climate events (particularly Typhoon Odette) and the limitations of mainland-centric development approaches.
Caraga's labor market demonstrated overall resilience during the review period, with the employment rate rising to record levels in 2024, though seasonal and climate-related volatility caused disruptions in mid-2025 that were subsequently reversed by the fourth quarter.
The underemployment rate of 13.9 percent recorded in October 2025 surpassed the medium-term target of 21.0 percent set in the Results Matrices for 2028 by a significant margin. This reflects the combined effect of the regional wage increase, the expansion of youth employment programs (SPES served 4,043 beneficiaries with PHP 19 million and achieved a 75 percent placement rate), and the recovery of the services and manufacturing sectors.
The mid-year spike in unemployment (5.1 percent in July 2025) and underemployment (20.8 percent) is attributable to a series of typhoons and strong earthquakes in Mindanao that disrupted economic activities and temporarily displaced agricultural workers. This climate-related vulnerability underscores the importance of DOST's disaster risk reduction programs and smart agriculture interventions under the CEST and SSCP programs.
Price stability in Caraga showed divergent trends between 2024 and late 2025, with low annual averages masking significant acceleration toward the latter part of the review period.
In 2024, headline inflation slowed to an annual average of 2.7 percent (down from 5.6 percent in 2023) due to moderating utility and fuel prices. The full-year 2025 average settled at 1.1 percent, well within the national target range. However, this low annual average obscures a significant acceleration toward year-end: December 2025 inflation rose to 2.6 percent, driven by a rebound in food prices attributed to rising rice prices, and further accelerated to 3.3 percent in January 2026 and 3.6 percent in February 2026.
The primary drivers of 2025–2026 inflation are food and non-alcoholic beverages (rice price acceleration; +2.1% in January 2026) and housing, water, electricity, and fuel costs (+6.6% in January 2026, with electricity at +6.0% and actual rentals at +8.5%). Butuan City recorded the highest urban inflation in the region, reaching 6.3 percent in December 2025, reflecting concentrated urban demand and rental pressures.
Government infrastructure programming has been a critical enabler of Caraga's economic expansion, particularly in reducing logistics costs and improving connectivity among the region's geographically dispersed provinces.
The Department of Public Works and Highways has prioritized four major highway projects for Caraga with an aggregate value of PHP 81.9 billion: the Maharlika Highway Rehabilitation (PHP 30.3B), the Butuan-Agusan Logistical Road (PHP 26.2B, 19.94% complete by 2025), the Cabadbaran-Puting Bato-Lanuza Road (PHP 8.8B), and the Agusan Norte-Sur Lateral Road (PHP 16.5B). These investments are designed to reduce logistics costs, improve agricultural transport, and enhance inter-regional trade by connecting Caraga's provincial capitals and key production areas.
The Caraga RDC endorsed a PHP 423.74 billion budget proposal for FY 2026, covering 36 regional line agencies, four SUCs, and the Philippine Science High School Caraga campus. The ROLLS It (Rehabilitation of Local Roads and Lane Sections) program received PHP 701.165 million in 2024 (11.29 lane km) and PHP 566.535 million in 2025 (7.79 lane km), supporting farm-to-market road improvements that directly benefit DOST Caraga's agricultural and agroforestry programs.