The Department of Finance (DOF) stressed the critical role of a robust agriculture industry in growing the economy at a sustainable and inclusive pace and supporting poverty alleviation in the long term.
In a statement on Tuesday, Aug. 2, Finance Secretary Benjamin E. Diokno said a more vibrant, more organized, and more productive agriculture sector will have a significant impact on the reduction of the poverty incidence of the country.
Diokno noted that the agriculture industry was not working in the past, with fluctuating and almost negligible contribution to the economy.
The finance chief added that poverty incidence in the agriculture sector is also high.
He said that based on previous performances of the economy, sustained growth will help drive poverty incidence rate reduction.
“Before the crisis, the Philippine economy was growing between six to seven percent and, in fact, we were close to our original target of reducing poverty to around 14 percent in the country by the end of President Duterte’s term, but of course the virus–the pandemic–intervened,” he said.
“We were not able to do that, but we are back to where we want to be. Maybe by the end – that’s the promise of [President Marcos] – by the end of his term, 2028, we will cut poverty incidence in this country to single digit – to nine percent,” Diokno explained.
Diokno said that the agriculture industry is also crucial for the development of the agri-business sector that has an impact on manufacturing.
He cited the high cost of the country’s agricultural products and basic needs as the reason for the continued high dependence on the importation of commodities.
He said in earlier that the government will continue importation until domestic production increases.
President Marcos, who has taken leadership of the Department of Agriculture, said in his first State of the Nation Address that the agricultural sector will be “one of the main drivers of our push for growth and employment”.
According to Diokno, another key driver of economic growth are foreign direct investments that would enable the introduction of new technology.
“When all the foreign direct investments that we are expecting finally come in, then, really, we will achieve our target of 6.5 to 8 percent [gross domestic product growth] towards the last five years of the Marcos administration,” Diokno said.
Another strategy of the government under its Medium-Term Fiscal Framework (MTFF) is digitalization to promote easier business transactions and support Micro, Small and Medium Enterprises (MSMEs).
“If we become a digital economy, poor Filipinos, using their cellphones, can transact business and they can do a lot of things with digitalization. Plus, government efficiency will improve. They can just pay their taxes in their app on their smartphone,” he said.
Diokno also cited the mining sector as having a great potential for supporting economic growth, especially with the high world metals prices.
He said that the government will focus on ensuring that all sectors, such as agriculture, industry, and services, are growing.
Efforts will be backed by recent structural reforms, including the amendments to the Retail Trade Liberalization Act, Foreign Investments Incentives Act, and the Public Service Act.
“With agriculture, mining, and then industry and services all growing, then we can actually lift a lot of people out of poverty,” said Diokno.