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DESPITE
a better-than-expected growth in the first quarter,
agriculture is not seen as the country’s main driver of
growth even in the first quarter of this year.
The
sector has been the laggard among the three main areas
of the economy. Traditionally, it grows at around 3
percent every year, but contributes less than 20 percent
to the economy.
Bienvenido Oplas Jr., economist and chairman of the
nongovernment organization Minimal Government, said that
despite higher-than-expected growth in agriculture, the
large portion of the gross domestic product (GDP) will
rest on the growth posted by the services and industry
sectors.
“Agri
comprises only 20 percent of GDP. If it [achieves] high
growth but the remaining 80 percent, services and
industry, slows down, GDP will be low. The main driver
of the Philippines’ GDP growth is services, not
agriculture,” Oplas said.
Former
budget secretary and University of the Philippines
economist Prof. Benjamin Diokno said the agriculture
sector, while not considered as a main growth driver,
will be the main driver of inflation this year.
This has
already been seen in the latest inflation figures
released by the National Statistics Office (NSO) which
showed inflation in April hit 8.3 percent, mainly due to
high food prices.
The
overall annual inflation rate for food alone climbed to
12 percent in April from 8.4 percent in March. Rice
prices, meanwhile, soared to 24.6 percent in April from
10.9 percent in March this year.
“The
Agriculture sector will not be the engine of growth this
year. But it will be the main driver of inflation,”
Diokno said.
Meanwhile, University of Asia and the Pacific (UAP)
economist Prof. Victor Abola said the 4-percent growth
in the Agriculture sector will significantly contribute
to the country’s GDP for the first quarter.
Abola
said he projects GDP for the first quarter to be between
6.4 percent and 6.5 percent.
He also
believes that the increase in the purchase price for
rice by the National Food Authotity (NFA) boosts the
incentive for farmers.
“The
higher NFA purchase price for palay from P11 per
kilogram to P17 per kilogram is a significant incentive
for rice farmers to increase hectarage and/or
productivity in the coming quarters or years,” Abola
said. |
