Will agri's paltry H1 output impact GDP, inclusive growth goals?
MANILA, Philippines - Going by the lower-than-expected performance of the agriculture sector in the first 6 months of 2012, several economists see mixed impact on the country's overall economic performance and ability to keep the government's promise to lift more people out of poverty.
On Monday, August 13, the Department of Agriculture announced that the farm sector grew by only 0.93% in January to June. This paltry growth aggregates the second quarter growth of 0.73%, slower than the first quarter growth, which was revised upward to 1.1% from the initial estimate of 1.08%.
University of Asia and the Pacific (UA&P) economist Rolando Dy said the total impact of agriculture growth on GDP may be insignificant. This, he said, is because agriculture only has a 15% direct impact on GDP and 25% in terms of indirect impact to economic growth.
He expects the farm sector's growth to be around 2% to 3% this year, lower than the official targets. Dy said this will be largely caused by the week output of the fisheries sector, which he said was the main drag in agriculture growth.
During a press briefing, agriculture officials attributed the poor performance of the fisheries sector to the fishing ban imposed in the Pockets 1 and 2 of the Pacific Ocean, which is near the Zamboanga peninsula, during the first two months of the year. The fishing ban has since been lifted.
Former Budget Secretary Benjamin Diokno said the slowdown in farm output will have a significant impact on the government's efforts to attain inclusive economic growth.
Diokno said since a third of employees in the country, including the underemployed and unpaid family workers, are in the agriculture sector.
"Lower farm output and hence, farm income, goes against the goal of achieving sustained, strong and inclusive growth. It means higher joblessness and deeper poverty in rural areas," Diokno said.
"For a poor country like the Philippines, the agricultural sector plays a key role in its development strategy," he stressed.
"The projected increase in fourth quarter consumption will pull up growth," Agriculture Secretary Proceso J. Alacala told reporters in a press conference.
"Kakayanin namin (We can hit the 3% to 5% growth target)," Alcala added.
The farm growth target is 4% to 5% for 2012. - Rappler.com