The Department of Budget and Management (DBM) said it is conducting a study that will aid the government in crafting a “solid” strategy to address slow farm production after President Duterte said agriculture is dragging down the country’s economy.
Budget Secretary Benjamin E. Diokno told reporters in a news briefing on Wednesday that they will be ready with the study in time for next week’s Cabinet meeting.
“We need all the evidence and all the facts so we can come up with a more solid conclusion and strategy moving forward because the President really has expressed concern that agriculture is dragging [down] the whole economy,” Diokno said.
The government would have been able to hit its GDP growth target of 7 percent last year if farm production expanded by 4 percent, considering the good performance of the Services and Industry sectors in 2018.
“Agriculture has not been performing well. We cannot afford that because it is also important in our desire to reduce poverty to about 13 percent by 2022. Plus, of course there are some 105 million consumers, so it also affects their general well-being,” Diokno said.
Data from the Philippine Statistics Authority indicated that the Agriculture, Hunting, Fishery and Forestry sector grew by 0.8 percent in 2018, slower than the 4 percent recorded in 2017. In contrast, Industry expanded by 6.8 percent, while Services rose by 6.6 percent last year.
In terms of share to GDP last year, the farm sector contributed the least as it accounted for only 6.8 percent. The country’s economy expanded by 6.2 percent in 2018.
Philippine economy was buoyed by the Services sector, which accounted for 48.3 percent of economic growth, followed by Industry with 28.6 percent.
Diokno also belied the claim of the Department of Agriculture (DA) that a lower budget is the culprit behind the productivity woes of the sector.
The DA’s proposed budget this year was slashed to P49.8 billion, from last year’s P55.7 billion.
But the DBM said the budget cut in various government agencies was due to the shift to cash-based budgeting and their spending performance in previous years.
“The performance of the sector has little to do with their budget and has everything to do with policy strategy and implementation,” said Diokno, who is also the chairman of the Development Budget and Coordination Committee.
Citing historical data from previous administrations, Diokno said the farm sector has already shown that it has the potential to grow by 4 percent even though the increase in spending for the sector was consistently flat.
“In fact, agricultural growth in 1999 and 2000 averaged around 6.5 percent. We can grow at that rate, at around 4 percent with agriculture. Agriculture must grow by 2 percent if as the country’s population has been expanding at the same rate,” he said.