The Duterte administration should invest more in the agriculture sector if it intends to sustain the country’s robust GDP growth, economists from the Ateneo de Manila University said on Thursday.
Luis F. Dumlao, dean of Ateneo’s John Gokongwei School of Management and Eagle Watch senior fellow, said a farm-production growth of only 1.5 percent would boost the country’s GDP. Eagle Watch projected that GDP growth this year could reach 6.2 percent.
“[If the government] becomes successful in normalizing agriculture growth to 1.5 percent, which is modest, then GDP this year could go up to 6.3 percent,” Dumlao told participants of Eagle Watch’s forum on the Philippine economy held in Makati City.
Eagle Watch senior research fellow Alvin P. Ang, who is also director of the Ateneo Center for Economic Research and Development, said the government must increase investments in agriculture if it wants the sector to increase its contribution to GDP.
“If you look at the growth of agriculture, the trend is actually downward, as it only grew by about 0.39 percent per quarter in the past two years,” Ang told the BusinessMirror on the sidelines of the same event.
“They have to invest in the sector, they should take agriculture seriously because it has a great impact on people,” Ang said, adding that 30 percent of the country’s labor force is in the sector.
Cielito A. Habito, former director general of the National Economic and Development Authority and senior fellow of Eagle Watch, said inclusive corporate business models would help increase farm output.
“For example, Jollibee has deliberately chosen to source their vegetables from small farmers [in the country] and that’s a totally different approach from vertical integration,” Habito said.
“A big company like Jollibee could [have opted to] vertically integrate into farming, have its own big farm to supply its requirement but they decided to make it an inclusive value chain. So that’s the challenge to big businesses,” he added.
The government has targeted to increase farm production by 2.5 percent this year. Ateneo economists, however, said the government may not be able to hit its goal.
The damages caused by Typhoons Lawin and Karen caused the country’s farm-sector output to contract by 1.41 percent in 2016.