More reforms needed to energize farm sector and boost PHL growth

DAVAO CITY— Finance Secretary Carlos Dominguez III has called on stakeholders in the agribusiness sector to think out of the box and come up with bold ideas to help the government wake Philippine agriculture from its stupor and finally transform it into a key growth driver to let the domestic economy accelerate “to a full gallop.”

Dominguez said at the opening of the Sulong Pilipinas Agribusiness Summit here on Tuesday that while President Duterte has demonstrated decisive leadership in passing agriculture-friendly reforms such as the Rice Tariffication Law (RTL), more policy initiatives are needed to enable the farm sector to reach its full potential on his watch.

The RTL has lowered the retail cost of rice for over 100 million consumers and established an annual P10 billion Rice Competitiveness Enhancement Fund (RCEF), which is meant to boost rice productivity by providing farmers with modern farm machinery and equipment, high-yield seeds, low-interest and accessible credit, and skills training programs on farm mechanization and modern farming techniques.

A former agriculture secretary, Dominguez said the rollout of productivity-enhancement programs, which are currently being carried out by the Department of Agriculture (DA) and its attached agencies under the leadership of DA Secretary William Dar, will slash farmers’ crop production costs and increase their yields.

To encourage the establishment of more agribusiness enterprises and make the farm sector more attractive and viable for the next generation of “agripreneurs,” Dominguez said an urgent reform that needs to be passed by the Congress is the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA), which aims to gradually reduce the corporate income tax (CIT) from 30 percent to 20 percent.

As agriculture secretary during the late President Corazon Aquino’s administration, Dominguez said he is aware that the government needs to work closely with stakeholders in this sector.

He said that is why the final edition of Sulong Pilipinas for this year gathered the country’s agribusiness stakeholders in this city to come up with actionable recommendations on how to jumpstart agricultural growth.

“The economic team is earnestly looking forward to the solutions you might arrive at in the course of this meeting. We encourage you to think out of the box and to propose bold ideas. The country benefits from a political leadership that does not fear change. This is the moment to break out from the structures that trapped so many Filipinos in poverty for far too long,” Dominguez told over 600 agribusiness stakeholders gathered at the SMX Convention Center in Lanang district.

Sulong Pilipinas is a consultative forum between the government and the private sector that started in June 2016 even before then-Davao City Mayor Rodrigo Roa Duterte took over as President.

This regular exchange of ideas between the government and private sector has helped the Duterte administration carry out its 0-to-10-point socioeconomic reform agenda aimed at providing a safe and comfortable life for Filipinos, and formulate and implement a comprehensive tax reform program (CTRP), a national ID system, the Ease of Doing Business Act, the Universal Health Care (UHC) Law and the President’s signature “Build, Build, Build” infrastructure program, among others.

 

Sulong Pilipinas has, since 2016, evolved into a series of sector-specific forums, such as youth-focused workshop held last month at the University of Sto. Tomas (UST) in Manila.

 

Dominguez said actionable recommendations from previous Sulong forums have started yielding tangible results, as shown by the significant decline in poverty incidence from 23.3 percent in 2015. to 16.6 percent in 2018, or 5.9 million Filipinos lifted out of poverty in three years, which is close to the government’s 6 million target by 2022.

 

However, Dominguez said “the stagnant productivity and anemic performance of agriculture” remains “a structural source of poverty.”

 

He pointed out that for the past 10 years, the agriculture sector grew at an average of only 1.1 percent. In 2018, despite the higher overall GDP growth of 6.2 percent, agriculture grew at only 0.9 percent. If it had grown by 2 percent, overall economic growth would have been at least 0.1 percentage point higher at 6.3 percent, Dominguez said.

 

The third-quarter results this year are more encouraging, with the farm sector growing 3.1 percent, or a significant turnaround from the 0.03 percent contraction recorded in the same period last year.

 

Dominguez said the agriculture sector needs to grow by a least 2 percent each year to keep ahead of the country’s annual population growth of around 1.7 percent.

 

“Clearly, there is much growth potential in our agriculture that requires policy support. Enhancing the growth of this sector is like waking up a sleeping giant that will help us make larger strides in our overall economic growth,” he said.

 

“Now is the perfect time to plant the seeds that our children and grandchildren will reap in the years to come,” he added.

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