Challenges in agricultural exports: Can the Philippines keep up with its ASEAN neighbors?

Published August 10, 2022, 5:00 PM

by Yvette Tan

The Philippines lags behind its ASEAN neighbors in terms of agriculture, and this includes agricultural exports. At the second Philippine Chamber of Food and Agriculture Inc. roundtable, Philip Young, president of Global Food Solutions, an exported of ube, cassava, and kamote, among others and Ram Amores, COO of Hi Las Marketing Corp., one of the country’s biggest okra suppliers to Japan, discuss some of the challenges that currently hinder the growth of the country’s agricultural export industry. 

A big red paper boat followed by two small blue paper boats folowed by two even smaller green paper boats.
Photo by Miguel Á. Padriñán on Pexels.

First, some numbers. The Philippines lags behind in terms of total export revenue, which Young estimated at 75 billion, in comparison to Singapore’s 467 billion. Vietnam’s 417 billion, Malaysia’s 299 billion, Thailand’s 267 billion, and Indonesia’s 228 billion. He further added that if you were to zero in on agricultural exports alone, Singapore’s totals 14.1 billion; Vietnam’s at 23 billion, Malaysia’s at 26 billion, Thailand’s at 35 billion, Indonesia’s at 49 billion, and the Philippines, at 7 billion.

An international market, he said, is not a problem, because even in the extreme example that there were no foreign buyers for Philippine products, there are  million Filipinos living arund the world who crave a slice of home. “[They] are already the consumers of our products, at the same time, they can be the best salesmen of our Philippine products,” he said. 

Added to this, there is a growing interest in Filipino cuisine, particularly in the US and Europe, led by the children of Filipino migrants exploring their cultural identities through food. 

But despite these advantages, agricultural export numbers remain low, and here, according to the businessmen, are some reasons:

Rising cost of freight and shipping. Shipping has always been more expensive for the Philippines compared to its ASEAn neighbors because the country lacks the scale of exports needed to lower costs. Problems with global fuel supply has only made this worse. “Their immediate advantage is freight cost and transit time,” Young explained in Taglish. “Aside from that, there’s a World Bank study that our cost in port operation or port charges is double than our neighboring countries.” 

Lack of coordination between government agencies. “Aside from the usual challenges [such as] high cost of operation, electricity costs, infrastructure, [another factor] is ease of doing business,” Young said, citing that there is a lack of coordination among the many agencies involved in agriculture and export. 

He mentioned that in the mid 80s, a UN consultant recommended that the country needed a “supersecretary” who had the authority to address any issue relating to export. “We should have cohesive action.”

Rising costs of production.

“Our exports have been taking a huge hit over the past years due to competitiveness,” Amores said. “Rising costs of fertilizers are increasing the costs of our products and it’s having a hard time competing with countries such as Vietnam and Thailand, whose costs of production are much more competitive.”

He appealed to the President, who is also Agriculture Secretary, “if we can accelerate and augment these high costs of production so we can remain globally competitive.” Measures could include, “more financial aids to our dear farmers who are partners in our export business so we can remain globally competitive and compete with the prices of other ASEAN countries.”

Amores ended on an amusing note that may also serve as a warning: “There’s a saying that was recently coined by the Department of Agriculture that we should keep agriculture sexy. It’s not sexy not making money. So if there’s some way we can bring this cost of production down and boost our profits for our farmers, then maybe younger generations such as myself would be encouraged to engage in farming.”

 
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