No second chances: We have fewer options
The country’s economic projections have increasingly become difficult to measure as the new coronavirus infections rear up at the most unexpected moments. Despite having one of the harshest lockdowns in Asia, the number of cases and deaths have continued to rise as an incoherent program to fight the contagion becomes more apparent.
Thus, it comes as no surprise that the country’s gross domestic production report for the second quarter of the year was widely off the mark, a contraction of 16.5 percent compared to last year’s, making it one of the worst performances in the region to date.
So when the economic team says that their projections for the whole year is revised to an economic contraction of 5.5 percent, from an earlier estimate of between two percent and 3.4 percent, we can only view this with askance. More so, the promise of a strong economic rebound next year.
Oh yeah, we really shouldn’t kid and lull ourselves into a false sense of security – at least, not until we’re sure that we have come up with a relatively good handle on how to manage this pandemic.
This time around, it is glaringly apparent that there will be no second chances should we drag further these quarantines through the rest of the year. The carnage during the first half will not stop if we don’t bring down the level of COVID-19 infections.
With the marked reduction in consumer spending, down 15.5 percent from comparable year ago levels, it is understandable to expect industrial production and services to decline.
Prioritizing agriculture
That said, hope by our economic planners is being pinned on the agriculture sector, which has also emerged in importance globally as reports of economic recession by even developed countries have become the norm, with China so far as the only exception.
The economic difficulties that more and more people face has curtailed spending to the most basic: food. Notably, the household basket is increasingly being filled with goods directly bought from the farms instead of those expensively processed and manufactured.
The pandemic has also exposed the vulnerability of relying on food imports as more countries scramble to protect their own food security. While the Philippines so far enjoys the advantage of having a stronger currency vis-à-vis other countries, thus putting it in a better position to import goods, the threat of a weaker economy in the coming months poses a threat.
Perhaps the most important value of putting agriculture first is its employment multiplier effect in an era marked by reduced industrial and manufacturing production, and the near death of the service sectors in the restaurant, entertainment, and tourism industries.
Agriculture, being labor intensive, can take up some of the unemployment numbers in affected industries. While offered wages are lower than in factories, and largely seasonal, agricultural employment offers a better option than downright starvation.
Agriculture also presents a timely option for micro and small entrepreneurs who have been forced out of business in the urban milieu by the extended quarantines. Establishing new businesses in the agricultural sector has never been as enticing.
Commercializing agriculture has a lot of potential, especially for agile entrepreneurs who are able to find value in establishing new livelihood opportunities in the food chains, thus not only creating more employment but also boosting value for the economy.
Bayanihan II funding
For the nation to reap the benefits that could accrue from agriculture, the government has to act quickly to lay the foundations for its revitalization. Here again, there will be no second chances should Congress waylay the proposed stimulus package for the agriculture sector.
The Department of Agriculture (DA) is asking for P66 billion, almost half of the money that the Department of Finance (DOF) is willing to allocate for the P140-billion second installment of the Bayanihan Law to revive the whole economy.
If there is any good going for the DA, it is the apparent blessings by the DOF to invest in the agriculture sector as gleaned from recent statements by Finance Secretary Carlos Dominguez III. The bad news, though, is that the Senate is willing to allocate only P16 billion, far lower than what the DA is asking.
Nothing is final yet since the House still needs to come up with its own version, after which bicameral sessions ensue to iron out disputes and arrive at a proposed law for the President to sign.
Fewer options
Notwithstanding the amount of funding that the DA will be able to channel to its proposed Plant, Plant, Plant agricultural stimulus program, how the money will make its way to its intended beneficiaries will be crucial.
So far, we’ve seen surprisingly good progress by the DA. Agriculture was the only sector that posted growth, albeit a humble 0.5 percent, during the second quarter after contracting negative gains in the first quarter because of the Taal Volcano’s eruption and a typhoon.
Agriculture Secretary William Dar has reported disbursement of already half its P64-billion budget allocation this year, and the P8.5-billion allocation for rice resiliency. New farm inputs have been distributed to over a million farmers already.
The DA is looking already at contributing to economic growth in the next two quarters, an optimism that is scarce during these pandemic times. Perhaps, we should trust our agriculture bureaucrats this time around – because we are increasingly realizing we have fewer options left.
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