Boosting Agricultural Exports and Reducing Imports for a Stable Economy

Strategic Insights -

Agricultural development in the country has witnessed a significant growth rate, particularly in the second quarter, where it outperformed other sectors. However, this momentum can be sustained only if the agricultural trade balance is improved by increasing exports and reducing imports. Last year, the country's agricultural exports only reached $7.8 billion, compared to imports worth $19.5 billion, resulting in a trade deficit of $11.7 billion, the worst in Southeast Asia.

Key Takeaways:

  • The country's agricultural exports must be increased by at least 80 percent to match Thailand's exports, reducing the need for $38.3 billion in overseas remittances that have disrupted the economy and social life.
  • Strategic imports, such as cacao and coffee, which account for 75 percent and 70 percent of the country's imports, respectively, can be replaced with domestic production and increased productivity.
  • The Department of Agriculture (DA) budget for high-value crops (HVCs), such as cacao and coffee, should be increased to 10 percent of the total budget, up from the current 1 percent, to boost production.
  • HVCs are crucial for penetrating world markets, utilizing strategies and innovations implemented by the DA, such as the Export Help Desk and the Monthly Agri Export Talk series.
  • The DA's Export Development Office, established by Secretary Francisco Tiu Laurel Jr., has formulated an agriculture export strategy with the assistance of Philip Young, a multi-awarded businessman.
  • The export initiative has shown impressive results, with a 22 percent agriculture export growth rate last year, demonstrating the success of the export thrust.

Statistics:

  • The country's agricultural trade deficit reached $11.7 billion last year, making it the worst in Southeast Asia.
  • In 2024, the country's agriculture export growth rate of 22 percent surpassed Vietnam's 18 percent and Thailand's 6 percent.
  • The country's agriculture exports were only worth $7.8 billion last year, while Vietnam's exports reached $62.5 billion and Thailand's exports reached $52.2 billion.
  • If the country were to match Thailand's exports of $52.2 billion, it would not need the $38.3 billion in overseas remittances that have caused economic and social disruption.
  • The DA's current budget for HVCs, such as cacao and coffee, amounts to only 1 percent of the total budget, while rice, which accounts for 20 percent of the country's agricultural production, receives more than 50 percent of the budget.

Sources:

  • Philippine Cacao Industry Association's conference with 1,300 participants on Oct. 15-16, which approved a five-year road map to propel cacao's growth.
  • Philippine Coffee Sustainability Congress's national meeting on Oct. 23, which recommended a P50-million Philippine Coffee Research Institute.
  • Agriwatch chair's statement on the need to increase the DA's budget for HVCs and reduce imports.