Agriculture growth seen slowing down to 2.5% in 2018

The performance of the country's agriculture sector is seen to slowdown to 2.5 percent this year from 4 percent in 2017 due to several typhoons that hit the country, one of which was Typhoon Ompong, the second strongest typhoon to hit the country since 2013 as far as the farm sector is concerned.

Agriculture Undersecretary for Policy and Planning Segfredo Serrano said that with the projected shortfall in farm output this year, the agriculture sector would have to make a rebound in 2019 by at least up to 3.5 percent to go back to the same level as the growth recorded in 2017.

The shortfall, according to Agriculture Secretary Emmanuel Piñol, was due to the damage and losses the sector had to endure from the typhoons that hit the country this year which amounted to more than 132 billion.

During the third quarter, the country's agriculture sector went down by nearly 1 percent for the first time in more than a year, but was valued 7 percent higher at 1409 billion as prices of goods spiked.

An earlier data from the Philippine Statistics Authority (PSA) showed that the agriculture sector contracted by 0.83 percent from July to September, which was a steep decline from the 2.32 percent growth recorded in the same period last year. The decline was attributed to the decline seen in crops and fisheries subsectors.

For the first nine months of the year, agriculture posted a 0.15 percent increase in output.

The agriculture sector, in September, had to endure the brunt of Typhoon Ompong, which destroyed 127 billion of the farm output in Northern and Central Luzon.

Piñol, however, said that despite this, the country's palay output may only slightly decline from the record level of 19.27 million metric tons (MT) in 2017 to 19.17 million MT this year.

The Department of Agriculture (DA) was originally targeting to hit the production of 19.4 million MT of palay this year, which would have been the country's highest palay output.

Moreover, the DA is seeing an improvement in the country's rice production next year, which will be backed by the 110-billion budget from the Rice Competitiveness Enhancement Fund (RCEF).

RCEF is the tariff collected from all the imported rice set to enter the country sans the quantitative restriction (QR). It is meant to make the country's local rice sector competitive amid the liberalization of rice importation.

Now up for President Rodrigo Duterte's signature, the amended Republic Act (RA) No. 8178 or the Agricultural Tariffication Act of 1996 seeks to replace the QR on rice imports with a specific tariff rate.

DA Assistant Secretary for operations Andrew Villacorta said that on the back of RCEF, farmers may be able to grow their overall output to 20 million MT by next year.

"For the first semester alone, we have produced 4.46 million MT in 2018. Next year, this should go up to about 4.7 million MT," Villacorta said.

Meanwhile, uncertainties loom whether or not the National Food Authority (NFA) will still have to make available the cheaper subsidized rice in the market once the Rice Tariffication Law is signed. If it has to, Piñol said the state-run grains agency could certainly not sell the staple at 127 per kilo because it could translate to losses for the government.

Earlier this month, the bicameral conference committee ratified the Rice Tariffication Bill, which will make up for the lifting of the quantitative restriction (QR) on rice imports through the imposition of 35 percent tariff on rice coming from membercountries of the Association of Southeast Asian Nations (ASEAN) like Thailand and Vietnam.

The bill was already endorsed for President Rodrigo Duterte's signature. Once forged, the law will effectively liberalize the entry of rice importation in the country.