I had the pleasure of attending a lecture recently by the former Department of Agriculture (DA) Assistant Secretary Leandro Gazmin regarding the economics of agriculture. Somewhere in the beginning of his lecture, he asked us if we thought the Philippines was an agricultural country. Some said yes, some said no. After giving his lecture, which included statistics from the Philippine Statistics Authority (PSA), he asked us that same question again, and some of us still came to that same conclusion that we are not. If you make it to the end of this article, perhaps, you can decide for yourself whether we are or are not. I will let you be the judge.
Just to give an overview, the Philippines’ agriculture industry is diverse and includes crops such as coconut, banana, rice, corn, sugarcane, pineapple, and mangoes, among others. It also includes poultry, swine, and cattle. The agriculture industry provided employment to around a quarter of the country's workforce and accounted for 9.5% of the country's gross domestic product (GDP) in 2022. While 9.5% of GDP is significant, looking at the rest of our GDP, a much more significant 61% comes from services. Looking at our agricultural trade balance, in 2021, agricultural imports were a little more than double the value of exports. Agricultural imports and exports were recorded at US$15.71 billion and US$6.79 billion, respectively.
Just like any business or industry, the agriculture industry has its challenges. It is mainly comprised of small-scale farmers who rely on traditional methods of farming, which can be time-consuming and inefficient. If we compare ourselves to other countries like Vietnam or Thailand for instance, we yield less per hectare than they do.
Philippine farmers also struggle to access markets and often sell their produce at low prices due to a lack of bargaining power. They also typically lack modern equipment and infrastructure. Another challenge faced by farmers is the limited access to financing. It is often difficult for them to obtain loans to invest in their farms and improve their productivity. Climate change is another factor that affects their productivity.
While there are government initiatives in place to improve our agriculture and the income of farmers, these challenges, the trade deficit in agriculture, and our GDP suggest to me that we are not an agricultural country. At least not yet. The good news is that the government’s eight-point socioeconomic agenda includes a budget allocation of P174.0 billion to ensure food security. The Department of Agriculture (DA) will receive the highest share of that allocation in the amount of P156.6 billion to support banner programs that cover rice, corn, livestock, and fisheries.
Brian Trias, Vice President of CCT Chemicals, Inc., member of FINEX, and currently attending the Strategic Business Economics Program at the University of Asia and the Pacific, he enjoys having discussions about technology and business.