‘Farm sector not ready for Asean integration’

The agriculture sector’s persistent low growth performance continues to drag the economy’s local output, measured as the GDP, and it appears to economists and business leaders to be an arena
where the Philippines has the littlest hope of competing well as the economic fusion of nations under the Asean happens.

This dim view, as indicated by actual historical data, is in stark contrast to a fearless forecast made by Agriculture Secretary Proceso J. Alcala some five years ago that the Philippines should no longer be importing rice by the end of the Aquino administration that is even now winding down its affairs in preparation for an exit some eight months hence.

According to figures presented by Ateneo economics professor Cielito Habito, also the head of the United States Agency for International Development  Trade-
Related Assistance for Development Project, the agricultural sector very nearly contracted in the second quarter this year by growing at a rate of 0.5 percent. Prior to that, the sector posted an expansion  averaging only 1.1 percent in the  first quarter. In contrast to the disappointing performance, the $285-billion  Philippine economy reported a modest 5.6-percent GDP expansion in the second quarter  this year.

In terms of job creation, the country’s unemployment rate
actually moderated to 6.5 percent in July from 6.7 percent a year earlier. The 768,000 new jobs created in the industry and services sector thus far have proven insufficient to compensate for the loss of 877,000 jobs in the agricultural sector the past year alone.

This moderating trend in almost all aspects of the agricultural sector has been noticed also by business leaders like Asia-Pacific Economic Cooperation (Apec) COO Summit COO Guillermo Luz.

Luz said in an earlier exclusive forum with Apec CEO Summit media partner  the BusinessMirrror that the government should start rethinking it’s strategy to win back the Philippines’s former position as the foremost agricultural producer in the region.

Luz said one of the measures that could help the country compete in agricultural production is to revisit the agrarian-reform program, which, according to him, has not worked to the country’s advantage because the resulting smaller farmer landholdings do not produce as much agricultural output as the large landholdings have.

The country’s foremost economist and Finance Undersecretary Gil Beltran has recommended that the Philippines import more rice on top of what it already regularly imports to ward off inflationary pressures on food anticipated in the wake of the devastation wrought by Typhoon Lando on the rice-producing provinces of the country.

According to Beltran, rice production in the so-called food basket of Central Luzon would likely contract by 8.2 percent for the whole year, bringing the total rice production forecast to negative
2.5 percent.

“As of October 20, 2015, the Department of Agriculture has estimated that 360,00 metric tons of palay has been damaged due to Typhoon Lando, of which, 326,000 tons was borne by Central Luzon. Assuming 0.65 conversion rate, total palay loss translates into 234,000 tons of rice, or roughly seven days of annual rice consumption,” Beltran said in the economic bulletin.

source:  Business Mirror