‘Compliance with WTO destroyed local farm sector’
NOTED international scholar Walden F. Bello has tagged the “indiscriminate liberalization” and f looding of the economy with imports as among the Philippines’s main problems and a factor in its failure to reduce poverty.
In a presentation of his economic vision as a vice presidential aspirant in the 2022 elections, Bello agreed with rival aspirant House Deputy Speaker Lito Atienza that corruption is the bane of the country, but added that there are other major problems facing the economy.
Bello and Atienza were the guests on Saturday night at the second of a series of forums organized by business groups led by the Federation of Filipino Chinese Chambers of Commerce Inc. and the Financial Executives Institute of the Philippines.
“The biggest problem has been indiscriminate liberalization—full opening of the economy,” Bello said, adding this began since the final years of the Marcos regime, then continued under Presidents Cory Aquino, Fidel Ramos, Joseph Estrada, Gloria Macapagal Arroyo and Noynoy Aquino—and now, under President Duterte. “We documented the steady drop of our tariffs,” said Bello, and “have practically de-protectionized our manufacturing.”
In late 1990s, he recalled, “we still had 200 major textile and garments firms in the country,” but “now they’re gone.”
Opportunities to move to higher-value-added in the medium and heavy industries—all that is gone,” as well, because of the “flooding of our markets by industrial and manufacturing products from other countries that took advantage of the radical bringing down of our tariffs.”
According to Bello, “some of the authors of that process, when they look back, even some of them are saying, ‘we went too far in opening up the economy.’”
Food importer
THE impact of liberalization on agriculture is deeper, said Bello, “especially after we joined the WTO [World Trade Organization] in 1995.”
With that came the demand that the Philippines eliminate quotas on agricultural products, with “only one left with us [being the] quota on rice.”
As a result, he said, the Philippines became an agricultural importing country when“we used to bean et agriculturalexporting country ,” adding ,“it has become worse,” with the trade deficit in agriculture continuing to widen.
“If you see what happened in agriculture, all farm sectors have been subjected to tremendous import [liberalization]. Compliance with the WTO had a big impact, and practically destroyed our agriculture.”
The latest adverse measure on agriculture, he said, was the Rice Tariffication Law “that was promoted by Senator [Cynthia] Villar, and practically all other members of the Senate, even supposed champion of agriculture like [Senator Francis] Pangilinan.”
He recalled how, after winning in 2016, Duterte “spent 10 minutes” in a speech in Davao, saying “the main cause of destruction of agriculture has been WTO’S demands on us.”
“I was really surprised that Duterte knew the facts on flooding of rice and other commodities in the Philippines.
He sounded like a radical,” added Bello. “But he eventually forgot all that—and then he signed the Rice Ttrade Liberalization Act in 2019.”
‘Subsidized rivals’
THE flooding of cheaper agricultural imports is compounded by the fact that “the big agricultural exporters subsidize their farm sectors” substantially, Bello said, citing as examples Thailand, the United States, European Union, and Vietnam.
“So much of their cost of production is taken up by government. But Filipino farmers do not enjoy” similar treatment, he noted.
“The others have socialist agriculture, that’s why they survive—they make profits on part of their production, then dump this on other countries. Thailand and Vietnam have been dumping on us.”
He stressed that the problem of the farm sector does not arise from any inefficiency on the part of local farmers, but that “there’s no effective competition because they’re up against subsidized rivals.”
“This has been the bane of Philippine agriculture,” said Bello, and challenged all economists to counteract this argument.
Sadly, added bel lo, the“technocrats and economists have destroyed our manufacturing and agriculture with their advice to a succession of leaders.”
Besides advocating programs to blunt the adverse impact of unbridled liberalization, Bello said his tandem with presidential aspirant Leody de Guzman will“ban con tr actualization” and pursue serious tax reforms as part of a comprehensive blueprint to reduce poverty and rebuild damaged economic sectors.