Surprise farm growth boosts GDP hopes

PROSPECTS for third-quarter economic growth — scheduled to be reported tomorrow — yesterday got a shot in the arm as the government reported a surprise expansion of agricultural production in those three months, fueled particularly by three out of four farm subsectors.

Preliminary data released by the Philippine Statistics Authority showed value of agricultural production increasing by 2.98% annually last quarter against expectations by both state and private-sector economists of flat performance to a slight contraction that was nevertheless seen to be “much better than the second quarter.”

Output of agriculture — which accounts for a third of the country’s jobs but contributes only a 10th to gross domestic product (GDP) — crawled by a nearly flat upwardly revised 0.06% in terms of value in the third quarter last year as El Niño started to make itself felt. Subsequent quarters saw year- on-year contractions in production, but the fall eased to 2.13% in the second quarter from January-March’s 4.35% as El Niño waned.

Socioeconomic Planning Secretary Ernesto M. Pernia — who late last week estimated 6.3-7.3% third-quarter GDP growth partly on expectations of improved, though flat, farm performance — told reporters yesterday that the surprise farm expansion could have helped fuel GDP to surpass its 7% second- quarter clip. “It (farm output) bounced back from negative to positive. That’s pretty good. Exports are also up, so maybe we’ll hit more than 7% for the third quarter,” Mr. Pernia said on the sidelines of plenary budget deliberations at the Senate.

Third- quarter farm growth took performance to a 1.53% contraction as of September against a 0.62% increment in 2015’s comparable nine months.

SUBSECTORS

The crops subsector grew 5.24% year-on-year in terms of value last quarter, accounting for 45.63% of total agricultural output, and rebounding from a 4.72% drop in 2015’s comparable three months.

This subsector’s output, however, dropped by a bigger 3.6% as of September from a 1.64% fall in 2015’s comparable nine months.

Production of palay and corn — which accounted for 15.24% and 9.29%, respectively, of total value of farm production last quarter — increased by 16.35% and 10.61%, respectively, turning around from respective contractions of 15.71% and 1.7% recorded a year ago.

Comparable nine-month data show palay’s fall halved to 2.39% from 4.66%, while that of corn more than doubled to 5.14% from 2.37%.

“Improvements in production were also recorded for pineapple, tobacco, abaca, mongo, cassava, tomato, cabbage and eggplant,” PSA said in its report, noting that crop production actually decreased by 3.6% in value terms as of September — more than double the 1.64% drop recorded in 2015’s comparable nine months.

Livestock — which accounted for 18.61% of total value of agricultural output — grew 3.89% last quarter, slightly better than the 3.13% increment recorded a year ago. This subsector’s output increased by 5.04% year to date, faster than the 3.88% increase recorded in last year’s comparable nine months.

Poultry — which contributed 17.15% to total agricultural production — grew 2.43% last quarter, slowing down from the past year’s 8.73%. The subsector saw a 1.53% increment year-to-date, much slower than the 6.31% recorded in last year’s comparable nine months.

Fisheries, however, contracted by 2.53% last quarter — accounting for 18.61% of total value of farm output — compared to a 1.07% increment in 2015’s comparable three months. JanuarySeptember saw the subsector’s production falling 4.59% compared to a nearly flat 0.59% reduction in last year’s comparable nine months.

FARMGATE PRICES

Farmers got generally better prices for their produce last quarter, though those into livestock and fisheries got worse deals, PSA data showed.

“On the average, prices received by farmers went up by 4.22% in the third quarter of 2016,” the report read.

But while price increases were recorded by the crops and poultry subsectors at 8.12% and 1.15%, respectively (compared to respective drops of 3.24% and 5.76% a year ago), livestock and fisheries saw 1.54% and 1.45% drops (against respective year-ago performance of -2.39% and 2.39%).

Year-to-date, farmgate prices increased by an average of 3.72%, turning around from the 3.84% drop recorded in last year’s comparable nine months.

Sought for comment, Agriculture Secretary Emmanuel F. Piñol said in a phone interview yesterday that farm production this year could still be “a little better” than 2015’s 0.11%.

But, he said, that means “kailangan magkaroon kami ng growth na over 5% sa last quarter para ma- positive growth tayo for 2016 (we need over 5% growth in the last quarter in order to have expansion for 2016).”

“Tingin ko (I think farm performance this year could be) a little better than 2015 siguro in spite of the typhoon[s] and two quarters of El Niño.”

However, Rolando T. Dy, executive director of the University of Asia and the Pacific Center for Food and Agri- Businesss, said full-year performance will remain lackluster notwithstanding the third-quarter surprise.

“Fourth quarter 2016 will be lower than third quarter’s 3%. It will be similar or even lower than fourth quarter 2015(’s 0.96% decline),” Mr. Dy said via text.

“Full-year 2016 will be negative,” he added, citing year- todate contractions in production of crops — including particularly of palay and corn — as well as of fisheries. —