GOVERNMENT ACTIONS- lahat ng plan and actions na gagawin ng gobyerno

about sa economic problems ng pilipinas

Economic Problem
 Raw Materials (Agriculture, Poultry, Livestock)
 Manufacturing (Production, Planta, factories)
 Essential Services (retail, market- tinda)

Raw materials > Production > product

Policy environment
The country's current strategy for agricultural development is highly conservative,
prioritizing traditional crops, with production targets designed to close any domestic
supply demand gap. Self-sufficiency is defended as a form of insurance against world
trade shocks, i.e. due to disasters or export restrictions in key exporting countries
(FSSP, 2012). The policy is supported by trade measures to protect domestic markets
with tariffs and non-tariff barriers. The regime may be characterized as "import
substitution agricultural development", the agricultural counterpart to the country's
earlier adoption of import substitution with regard to industry. Protectionism is best
exemplified by rice, for which the most-favored nation (MFN) rate is 50%. More
importantly, rice is officially subject to quantitative restrictions, with continuation of
special treatment now being considered by WTO (upon request of the Philippine
government). Also conferred high tariff rates are sugar (65%), corn (50%), as well as
pork, chicken, cassava, coffee, onion, cabbage, carrot, and potato (40%). Together
these commodities account for about 61% of the value of agricultural output (excluding
fisheries). Each of these commodities requires an import permit, supposedly for
applying sanitary and phytosanitary standards; in practice these permits are used as
non-tariff barriers (David et al, 2012). The alternative would be to support the
engagement of Philippine agriculture with the global market, through trade and
specialization based on comparative advantage. This entails more liberal trade policies
(lowering of tariffs and non-tariff barriers) as well as directing expenditure support on a
more neutral basis, i.e. greater outlays towards products with lower support, which
typically are the export-oriented commodities (i.e. products for which the Philippines has
comparative advantage).
Analytical tool
The tool for scenario analysis is the Agricultural multi-market Model for Policy
Evaluation (AMPLE), described in Briones (2010). As with similar studies, the numerical
output of the model should not be seen as forecasts, but rather as projections of market
movements as determined by supply-demand fundamentals. It is not designed to
anticipate supply and demand shocks and cannot be expected to replicate variability of
actual data. Its primary advantage is that it offers a systematic means of imposing
internal consistency of 10 assumptions related to, among others, supply and demand
responses, and trends of the variables external to the model (such world prices).
Commodities for which production, consumption, imports, exports, and corresponding
prices are variables of AMPLE are as follows:

Modernizing the country's agricultural sector is a very important agenda for the
Philippines,"  said Ndiame Diop, World Bank Country Director Brunei, Malaysia,
Thailand, and the Philippines.  "With the exception of a few small natural resource-rich
countries, no country has successfully transitioned from middle- to high-income status
without having achieved an effective transformation of their agri-food systems.
Transforming agriculture and food systems is always challenging. But the country's
new vision for agriculture, it's current thrust for diversification and use of modern
technologies, and its effective management of food supply during this pandemic
clearly indicate that the country is well-equipped to overcome the challenge."

"Our vision is a food-secure and resilient Philippines with prosperous farmers and
fisherfolk,"  Agriculture Secretary William Dar said.  "Realizing this vision will require
dedicated efforts among major agri-fishery industry stakeholders, led by the
Department of Agriculture, to continuously empower farmers, fisherfolk, agricultural
entrepreneurs, and the private sector to increase agricultural productivity and
profitability, taking into account sustainability and resilience."

The report, which was prepared as part of World Bank support to the Department of
Agriculture's "new thinking" in agricultural development, suggests shifting away from
a heavy focus on specific crops towards improving the overall resilience,
competitiveness, and sustainability of the rural sector.

In the past, spending has gone mostly toward price supports for selected crops and
goods, as well as subsidies on inputs such as fertilizer, planting materials, and
machines. Global experience shows that while ensuring the availability of key inputs
remain important, reorienting significant public spending toward investments in public
goods---including research and development (R&D), infrastructure, innovation
systems, market information systems, and biosecurity systems---results in faster
poverty reduction and greater productivity gains through an overall modernization of
agriculture.

The report says that small farmers have difficulty accessing inputs and markets for
their produce, while buyers such as agribusiness enterprises and wholesalers find it
difficult to get the quantity and quality of produce that they need for processing on a
timely basis. Government support can help overcome this market failure by bringing
together buyers and producer organizations and providing support for the preparation
and implementation of profitable business plans that benefit both parties.

In situations where farmers need support to help them access markets and improve
their livelihood, or when compensation measures are needed for farmers affected by
trade policies such as the rice liberalization in the Philippines, direct cash payments
or cash transfers can be a better option, as practiced in many countries like Turkey,
European Union, and the US, says the report. These direct payments have many
advantages, such as giving farmers more choices and encouraging private sector
development in upstream (inputs and agricultural services) and downstream
(processing, marketing) markets, thereby helping farmers connect to these markets
and opportunities.

The report says that interventions like farm consolidation (including cooperative
farming schemes for instance), better extension services, e-commerce, and
investments in agribusiness start-ups can further advance modernization of Philippine
agriculture.
"These paradigm shifts will be crucial to meet the emerging domestic and global
market opportunities, while creating jobs, raising farmer incomes and ensuring the
food security needs of the country and meeting the new challenges of climate
change," said Dina Umali-Deininger, World Bank Practice Manager for Agriculture
and Food for East Asia and the Pacific.

World Bank's support to the Philippines includes long-running programs aiming to

raise agricultural productivity and reduce poverty in rural communities. A current
example of this is the Philippine Rural Development Project (PRDP) which aims to
help increase rural incomes and enhance farm and fishery productivity.

Several projects are in the pipeline to help raise agricultural productivity, resiliency
and access to markets of farmers and fisherfolk in selected ancestral domains in
Mindanao and improve management of coastal fishery resources in selected coastal
communities.

Similar to agriculture, among the important challenges facing the natural resources and
environment sector of the Philippines are natural hazards and disasters. In response, a
major development goal in this sector is the enhanced resilience of natural systems and
improved adaptive capacities of human communities to cope with natural hazards and
disasters including climate-related risks (NEDA, 2011). To reach this goal, the following
strategies are pursued by the government: a) strengthening the institutional capacities
of national and local governments for climate change adaptation and disaster risk
reduction and management; b) enhancement of the resilience of natural systems; and c)
improvement of the adaptive capacities of communities.
Among the main challenges facing the agriculture sector in the Philippines is its
vulnerability to the inherent climate volatility within the region, as well as global climate
change. In response to this, an important development goal for the country is an
increased resilience to climate change risks of the agriculture sector. With a rapidly
increasing population and demand for food, another major development goal is
improved food security. To attain these two goals and other objectives within the
Philippines’ agricultural sector, the strategies promoted by the government are: a) to 9
raise the productivity and incomes of agriculture and fishery-based households and
enterprises; b) to increase the investment and employment level across an efficient
value chain; and c) to transform agrarian reform beneficiaries into viable entrepreneurs.

Three pillars that will govern the recovery; 1) calibrated safe re-opening of the economy.
2) the accelerated implementation of the recovery package, consisting of 15 percent of
GDP, in terms of fiscal, monetary, and financial resources; 3) the timely implementation
of the vaccination program.

Vaccination is crucial in restoring the people’s confidence in resuming economic

activities. The national vaccination rollout started in March 2021. As of 13 July 2021, a
total of 13.817 million doses have been administered nationwide of which 9.932 million
have received the first doses while 3.885 million (about 3% of the total population) have

Strategic Actions and Complementary Measures

completed the required 2 doses. The adoption of “micro-herd immunity” and “safe
spaces” particularly in the National Capital region and major economic hubs as
strategies are seen as bridging solutions that would help facilitate the reopening of the
economy ahead of achieving population protection and herd immunity for the country’s
entire population.  As of this writing, the Philippines is still dealing with 5,000 reported
cases daily.

Goals and Strategies

Roadmap for Structural Transformation

Short-run (2014-2017) Goals:
 maintain competitiveness of comparative advantage industries
 strengthen emerging industries
 strengthen capacity of existing industries
Medium-run (2018-2021) Goals:
 shift to high value added activities
 investments in upstream or core sectors
 link and integrate manufacturing with agriculture and services industries
 create a manufacturing innovation ecosystem
Long-run (2022-2025) Goals:
 continue technology upgrading to maintain a globally competitive and
innovative manufacturing industry
Strategic Actions and Complementary Measures

To achieve the above goals, the following strategic actions are pursued:

 Address gaps/linkages in industry supply chains

 Expand the domestic market base to allow industries to attain scale
economies and export
 Design human resource development and training programs to improve skills
and establish tie-ups with universities and training institutions
 Support SME development through establishment of common service and
incubation facilities
 Support innovation and R&D activities
 Promote green growth: green industry, use of clean technologies in industrial
production, greater resource and energy efficiency, improved water and waste
management
 Pursue aggressive promotion and marketing programs to attract more foreign
direct investments especially those that would bring in new technologies.
 Continue to address the high cost of power and domestic shipping, smuggling
and implementation of measures to streamline and automate government
procedures and regulations.
 Adopt a more competitive exchange rate.

Combating Poverty in the Philippines

The Philippines has a fairly high poverty rate with more than 16% of the population
living below the poverty line. Because of the many people reliant on agriculture for an
income and inequality in wealth distribution, about 17.6 million Filipinos struggle
to afford basic necessities. From 2015 to 2020, the rate of poverty declined from 21.6%
to 16.6%. Philippine President Rodrigo Duterte aims to reduce the rate of poverty to
14% by 2022. Through its strategy, AmBisyon 2040, the Philippine government plans to
eradicate extreme poverty by 2040. Furthermore, the government has implemented
various programs and reforms to reduce poverty by targeting education, healthcare and
the overall economy. Here are five ways the program is combating poverty in the
Philippines.
1. Greater Access to Education: A factor of systemic poverty is a lack of
access to education in impoverished areas. People gain basic skills and
increased job opportunities through education, which can help to combat
poverty in the Philippines. Therefore, the Philippines signed the Universal
Access to Quality Tertiary Education Act in 2017 to encourage more people
to enroll in higher education and to address the issue of education inequality.
The government subsidizes the cost of tuition for State Universities and
Colleges (SUCs) students as well as other expenses such as school
supplies. Private institutions also have access to a tuition subsidy. The Act
aims to decrease the number of dropouts in higher education and promote
the idea that higher education is available to all.
1. Greater Access to Healthcare: In an effort to improve the healthcare
system, President Duterte signed the Universal Healthcare Act in February
2019. The UHC Act provides access to the full spectrum of healthcare by
enrolling citizens in the National Insurance Program and granting health
coverage to all. While healthcare is not completely free, those in poverty will
have more access to health services. To ensure the effectiveness of
healthcare, the Act will form the Health Technology and Assessment Council
(HTAC). The Council will consist of health experts who will assess health
developments, such as technology, vaccines and other advancements.
Additionally, the Philippines will allocate more funds to PhilHealth, which will
improve the quality of service and lower the cost of medicine.
2. Family Aid: To further efforts to support citizens, the government
implemented the Pantawid Pamilyang Pilipino Program (4Ps) in 2007. The
4Ps is is a conditional cash transfer program for impoverished households.
The program gives households grants so long as they meet certain
requirements, including keeping the children in school, having regular health
check-ups and having parents or guardians attend Family Development
Sessions. The 4Ps program benefits about 20 million Filipinos, 9 million of
whom are children. Therefore, the program reaches about 20% of the
population with the goal of greater poverty reduction.
3. Economic Improvement: With the goal of reducing poverty by
strengthening economics, President Duterte signed the Rice Tariffication
Law in February 2019, amending the Agricultural Tariffication Act of 1996.
The Law places a 35% tariff on imported rice with the goal of prioritizing local
rice production for the population by stabilizing the supply. The tariff also
aims to benefit local farmers by creating a more efficient and competitive
agricultural system.
4. Build, Build, Build: Additionally, the Duterte administration created
the “Build, Build, Build” infrastructure plan in 2017. The initial goal of the
program was to complete 75 projects, but Duterte revised the plan to instead
target finishing 100 projects. Some projects include new public transportation
and airport renovations. The government has put about 34% of the projects
into action and is expecting to complete 56% by 2022. By 2019, the
government had completed two of the initial 75 projects. With support from
loans, the Philippines will rely on Build, Build, Build as a strategy to aid the
country in recovering from the COVID-19 pandemic. The government’s hope
is that combatting the effects of the pandemic by improving the country’s
infrastructure will stimulate the economy and create more jobs. However, the
program has received criticism due to its slow execution as a result of
underspending.
Unfortunately, poverty is expected to increase in the Philippines because of the
coronavirus crisis. This will lead to a decrease in consumption growth and further
income losses. Therefore, greater efforts are necessary to combat poverty in the
Philippines amid the pandemic, which has hit the impoverished the hardest.
– Zoë Nichols

New Programs to Reduce Poverty in the Philippines

As of 2015, 22 million Filipinos are still living in the depths of poverty. That equates to
one-fifth of the population. Poverty presents itself in a vicious cycle affecting mainly the
uneducated population who tend to live in large family units. These family units usually
have only one head of the household who provides income for the entire family.
The Filipino government is actively trying to speed up its poverty reduction plan. Their
long-term goal is to be able to provide more economic prospects, which in turn would
help many of their citizens earn a higher and more stable income. A report by the World
Bank shows how this economic growth helped decline the rate of poverty. Poverty in the
Philippines dropped by 26.6 percent in 2006 to 21.6 percent in 2015.

Key Programs to Help Reduce Poverty in the Philippines

Some factors that resulted in the drop in poverty are the expansion of jobs outside the
agriculture sector, government transfers and getting qualified Filipinos to help through
the Pantawid Pamilyang Pilipino Program. This particular program which is a
government cash-handout project has helped reduce poverty by 25 percent.
Most of the Philippines are hit with massive typhoons and still have an armed conflict.
These scenarios are a real struggle to the everyday worker who, even after a long day,
still goes back home poor. Due to these factors, many citizens end up leaving behind
farm work and go find work in manufacturing hubs in the urban areas of the country.
These jobs outside the agricultural dome have accounted for two-thirds of the progress
in reducing poverty in the Philippines.
One of the key strategies to help bring down poverty in the Philippines is providing birth
control to the poor. In a radical move for the heavily populated Catholic country, the
President made readily available birth control to nearly 6 million women who cannot
afford it.
Providing birth control is a powerful tool for families who now have full control over
family planning. The hope is by giving the women and family units more control, they
will have fewer children. This, in turn, will mean that families can provide more
responsibly.  This new policy will help the government reach its goal of reducing poverty
by 13 percent by 2022.
The current Filipino population is at 104 million and continues to rise at an alarming rate
of 1.7 percent each year. This new law will enable families to control how many children
they want. It will also hopefully take down the population rate to 1.4 percent each year
once the law is fully executed.
Government Hopeful About Achieving its Aim
Even though the Philippines have worked hard in the past to reduce their poverty and
keep up with their neighbors China, Vietnam and Indonesia, they still have a long way to
go. Marak K. Warwick of The World Bank believes that with a solid foundation there is a
reason to be optimistic that the Philippines can achieve their goal.
The goal for the Philippine government is to create more jobs, improve productivity,
invest in health and nutrition while focusing on reducing poverty. If the government is
able to execute its plans successfully, it is capable of reducing poverty in the Philippines
by 13 to 15 percent by 2022.
-Jennifer O’Brien

More High-Paying Jobs to reduce poverty in the Philippines

Poverty in the Philippines has declined from 26.6 percent in 2006 to 21.6 percent in
2015. A report released by the World Bank on May 30, 2018 titled ‘Making Growth Work
for the Poor: A Poverty Assessment of the Philippines’ reveals the major factors that
contributed to this decrease.

Factors for Poverty Decline in Philippines

 A rise in income and introduction of new job opportunities beyond the
agricultural sector led to about two-third of decline in poverty.
 The Pantawid Pamilyang Pilipino Program, a cash transfer program of the
Philippine government, enhanced the living conditions of 1.5 million people
thereby reducing national poverty by 1.5 percent. The program works towards
alleviating poverty by providing financial assistance to 77 percent of poor
households.
 Houses that received foreign or domestic remittances experienced
significant changes in their living conditions. Around 15 million households in
the Philippines receive money through domestic or foreign employment
sources; this helped reduce poverty by up to 4 percent.
However, though these positive developments helped reduce poverty in the Philippines,
the rate of decline has been very slow compared to East Asian countries. Between 2006
and 2015, there has only been a 0.9 percent decline in poverty as per the international
poverty line ($1.90/day), while the East Asian countries — including China, Indonesia
and Vietnam — have shown 2-2.5 percent in poverty reduction.

Education, Employment and Disaster Relief

Lack of education is one of the main reasons for this slow decline. Since a majority of
the poor lack an education, they lack access to better employment opportunities; this
trend thus keeps the majority of citizens trapped in the poverty cycle.

Many poor households also have only one earning member in the family, who is
generally employed as a laborer in the agricultural sector. Such households are often
the poorest and remain extremely vulnerable to the frequent changes in production
rates.

Another reason for poverty in the Philippines is the deterioration of the quality of
employment over the years. A report reveals that although the Philippines has
experienced economic growth, it has failed to maintain consistently high standards in
various sectors. In addition, poor disaster management skills have often lead to failure
of timely protection and evacuation of people.

The Need for Productive Employment

The U.N. clearly highlights the link between economic growth, high-paying jobs and
poverty eradication. The group states that economic growth of the country as a whole
on its own will not help in reducing poverty; rather, economic growth has to be
combined with an increase in the number of “productive employment” made accessible
to the poor.
As mentioned in the report, “The vicious cycle of inequitable investment in human
capital and lack of well-paying job opportunities traps the poor in poverty generation
after generation.” What is needed then is to transform the pattern of growth to make it
more inclusive, and to provide better jobs to achieve higher and more stable incomes.
The vice chairman of the labor committee, Senator Juan Edgaro Angara states that
“jobs remain the key to poverty. If there is enough income, a permanent and decent job,
the lives of Filipinos would be surely uplifted.”

The Public Employment Service Office of Philippines (PESO) held a job expo on June
2, 2018, at which around 103 people were hired on the spot. This gathering is
considered to be one of the biggest job fairs in Visayas, Philippines and this year it
presented people with around 33,000 positions. Sen. Juan Angara commended the
expo and said that every province, city and municipality in the Philippines has its own
PESO — this prevalence should ensure that every Filipino gets a job to help them rise
out of poverty.

Just days after this job expo, another job fair was organized at Rizal Park, Manila on
June 12, 2018, to mark the 102nd anniversary of Philippine Independence. According to
the Department of Labor and Employment, around 30,000 jobs were offered which
included 45 local, 25 overseas and eight government agency positions. Generally,
though, it was the transportation and domestic construction sectors that offered a
majority of the vacant positions.

New Initiatives to Alleviate Poverty in the Philippines

The Philippines has around 22 million people — or around one-fifth of its population —
still living below the poverty line. The launch of AmBisyon 2040 by the National
Economic and Development Authority (NEDA) is a long-term commitment to uplift the
underprivileged sections of the society.

Functioning parallel to such an effort is also the Philippines Development Plan 2017-
2022. Both these initiatives have set out ambitious goals to eradicate poverty in the
Philippines by transforming the country into a prosperous middle-class society where
“people will live long and healthy lives, be smart and innovative and will live in a high-
trust society.”

To make this a reality, the government has taken up the task of reducing poverty by one
percent every year to see a reduction of 13-15 percent by 2022. In addition to these two
initiatives, the poverty assessment stresses the following to catalyze the rate of poverty
decline:

 Focusing on creating a greater number of high-paying jobs

 Improving the business environment to attract more investment
 Making means to improve productivity in all sectors, mainly agriculture
 Ensuring skill development to make the Filipino population highly capable
for the 21st century economy
 Improving health and nutrition
 Placing special emphasis on initiatives to reduce poverty in Mindanao
 Making better provisions to manage disasters and protect the vulnerable
sections of the society

Thus, with new initiatives and a greater focus on creating more well-paying jobs, the
government hopes to reduce poverty in the Philippines and bring about a permanent
change in the lives of the Filipino people.

– Shruthi Nair

Programs Across the World to Address Poverty in the Philippines

Despite the rising economic growth rates in the Philippines, poverty in the

Philippines continues to prevail nationwide. According to the Asian Development Bank
(ADB), 21.6 percent of Filipinos live below the national poverty line.
There are many factors that create and maintain the cycle of poverty in the Philippines.
Unemployment is one of the main reasons that poverty reduction has not kept up with
the country’s growth. Alongside an increasing population, job resources remain
insufficient for millions of Filipinos.
The Philippine poverty condition remains a challenge due to the government’s lack of
capacity to establish sustainable poverty reduction programs. Governments from other
countries, alongside international institutions, have implemented strategies aimed to
tackle the Philippine poverty crisis. These programs share the common goal of
alleviating poverty in the Philippines by addressing unemployment in the country.

The World Bank

The World Bank plays a large role in working towards eradicating poverty in the
Philippines. One of the projects financed by the World Bank is the ‘Philippine Rural
Development Project.’ The goal of the project is to create greater work opportunities for
Filipinos in the rural areas by supporting farmers and fishermen through improving their
access to markets.
As of last year, results from The World Bank reported an increase in household incomes
for farmers and fisherfolk beneficiaries. As of January 2018, this project has been
approved for additional financing to continue its contribution in addressing poverty in the
Philippines.

The United States of America

USAID has established the Philippine-American Fund (Phil-Am Fund) as a strategy to
tackle poverty in the Philippines. One of the program’s objectives is to develop solutions
to the country’s economic challenges. The Phil-Am fund financially supports  Philippine
organizations to support business start-ups.
This strategy to address the poverty crisis promotes entrepreneurship by offering a self-
sufficient facility for citizens who do not have the capacity to take part in the province’s
economic activities.
As of last year, the Phil-Am fund has managed to support the establishment of start-up
businesses, provide training in standards for food-related establishments and has
integrated more efficient farming technology in the Philippines.

Australia
Australia’s foreign aid to the Philippines includes ‘The Philippines’ Sustainable
Livelihood Program’ (SLP), which helps Filipino families by providing employment
assistance. The SLP also helps Filipino citizens start at enterprise — an approach that
encourages self-sufficiency.
Australia’s aid program aligns with the Philippine government’s goal to tackle poverty
and promote development. Sustainable livelihood is the primary goal of this program,
and includes micro enterprises, skills training and pre-employment assistance.
Filipinos who take part in this program have agency and decision-making
responsibilities by providing access to microenterprise development and employment.
SLP has become an efficient platform for productivity and development and since its
establishment in 2011, SLP has achieved 97 percent of targeted program participants.

Promotion of Autonomy
The above-mentioned programs designed to address the Philippine poverty crisis all
share one feature: the encouragement of self-efficiency. Rather than providing charity to
the Filipino citizens living in poverty, these programs empower the people by giving
them access to opportunities. The citizens are provided with the agency to take control
of their work, promoting an inclusive form of development.
– Dane de Leon

How COVID-19 has affected poverty in the Philippines

The COVID-19 pandemic could push an additional 207 million people into extreme
poverty based on predictions, bringing the total to over 1 billion by the year 2030,
according to research from the United Nations Development Program (UNDP). COVID-
19 has affected poverty in the Philippines, an archipelagic country in Southeast Asia,
with no exception. The COVID-19 pandemic is significantly impacting the Philippines
when it comes to the economy, jobs and poverty incidence. Here is some information
about the effects of COVID-19 on poverty and how the government of the Philippines
plans to address them.

Poverty Reduction
Prior to COVID-19, the economy of the Philippines made progress in delivering national,
inclusive growth, as indicated by an impressive decline in poverty rates. Poverty rates
declined from 23.3% in 2015 to 16.6% in 2018. The Philippines expected this trend to
continue and impact household incomes throughout the country in a positive way,
particularly wages from those of lower-income groups.
The COVID-19 pandemic had negative consequences for poverty reduction in the
Philippines. The World Bank projected that the Philippines’ GDP would shrink by 8.1 %
in 2020, from the previous forecast of 6.9%. Rong Qian, a senior economist with the
World Bank, attributed the downgraded 2020 forecast to the GDP contraction of 11.5%
during the third quarter of 2020. The third-quarter contraction came as a string of
typhoons hit the country from October to November 2020.

Economic Effects of COVID-19

The COVID-19 pandemic has resulted in a contraction of economic growth driven by
significant declines in consumption and investment growth. The pandemic has also led
to profound disruptions in areas like manufacturing, agriculture, tourism, construction
and trade throughout the country. This feeds into how COVID-19 affected poverty in the
Philippines on different levels. The impact on the country’s economy has been severe,
leading to the lowest consumption growth in over three decades. The effects on the
economy began to take place in February 2020 with a considerable decline in the arrival
of tourists, falling by 41.4%. Coupled with this, private consumption growth declined to
0.2% in the first quarter of 2020 from 6.2% in the previous year. Both the hotel and
restaurant industries suffered considerably, shrinking by 15.4%.

The economic collapse in 2020 has also led to high unemployment throughout the
country. The economy will lay off people with service jobs in several different fields.
Many others will be on unpaid leave from their companies. Employment recovery can
lag the country’s economic growth by six to 18 months. Estimates have determined that
unemployment will remain at elevated levels, moving from 12.4% at the end of 2020 to
9% by June 2021.

Possible Financial Support

Prior to COVID-19, the government of the Philippines reduced poverty from 23.3% in
2015 to 16.6% in 2018. This was a result of steady economic growth, the creation of
new jobs and social assistance programs. The COVID-19 pandemic will likely reverse
the recent gains in addressing extreme poverty. COVID-19 related restrictions have cut
off income for seasonal workers, entrepreneurs and low-end service jobs. They were
the country’s drivers of poverty reduction in recent years. Achim Fock, the World Bank
Acting Country Director for Brunei, Malaysia, the Philippines and Thailand hopes that
offering “financial support to affected firms, especially small and medium enterprises, to
prevent job losses and bankruptcy, can help ensure that the recent shocks do not cause
permanent damage to the country’s productive capacity and human capital.”

Social Amelioration Program

The government of the Philippines introduced a social protection program during the
country’s quarantine to address how COVID-19 affected poverty in the Philippines. The
government provided emergency subsidies through its Social Amelioration Program
(SAP). SAP covered 18 million poor households, making up 70% of the entire
population that it granted coverage to. SAP beneficiaries include 4.4 million households
enrolled in the safety net program Pantawis Pamilyang Pilipino Program along
with other vulnerable Filipinos such as informal workers.

Projected Improvement
Economic managers assert the Philippines will remain under a less restrictive
quarantine throughout the beginning of 2021. They are hoping the economy will open
100% once vaccination levels reach at least 60% of the population. The growth of the
economy could still improve and poverty could reduce in the coming years as long as
there is a rebound in consumption, a significant push in public investment and great
strides in the recovery of global growth. Predictions have stated that economic growth
will return to at least 6% in 2021 and 7% in 2022.
– Elisabeth Petry

The Philippines’ improved economy

The Philippines is a developing nation located in the East Asian Pacific region. Although
the nation is still developing, the Philippines economy is improving exponentially.
According to the World Bank Group, the country is experiencing increased
urbanization and the middle class of the country is growing. Businesses have
experienced notably positive performance in the past few years. Real estate, finance
and the insurance industry are all areas where the economy is having exceptional
growth. However, the COVID-19 pandemic has slowed the economic growth of the
Philippines. If the Philippines contains the virus on both a domestic and global level then
the economy of the Philippines will rebound in late 2021 or 2022. The Philippines’
improved economy occurred in several ways.

Investing in Agriculture
Agriculture accounted for about 25% of the Philippines’ GDP in the 1980s. However,
only 9.3% of the agriculture industry contributed to the economy in 2018. Yet, the
agriculture sector employs about 25% of the Philippines’s workforce. Some important
agricultural goods from the Philippines include coconuts, rice, corn and pineapples. In
recent years, the agricultural sector’s low rate of growth has contributed to poverty and
unemployment.

As a result, the government has begun supporting the Philippine Department of

Agriculture’s programs. Some of its programs include improving food security within the
nation. The World Bank’s Philippine Rural Development Project is providing external
support to the agricultural sector. This project aims to improve infrastructure that is vital
to agricultural production. Furthermore, improving agriculture is vital to the economy.

Improving Industry

The industry sector has been another contributing piece to the Philippines’s improved
economy. Currently, this sector has currently been able to employ 18.4% of Philippine
workers. Additionally, the Filipino government is attempting to increase the amount of
foreign direct investment. It also plans on achieving this goal by working to improve the
infrastructure of the nation. This will then attract the attention of possible investors.
Manufacturing is another important industry in the Philippines. The Philippines is home
to a variety of metallic resources. The mining industry itself has already brought different
mining companies to the Philippines to conduct business. Mining businesses working in
the Philippines include BHP and Sutimo Metal Mining Co LTD.

The Growing Service Sector

The growth of the service sector is another contributor to the Philippines’ improved
economy. Around 60% of the Philippines’ GDP comes from this sector. In addition, the
service sector also employs about 56.7% of people in the Philippines’ workforce. One
vital part of the service sector includes business process outsourcing (BPO). The
Philippines has an extremely large BPO market due to the United States aid.

The Philippines’ improved economy is noticeable in several ways. First, the income-per-

capita saw an increase of 17% from 2016-2018. Additionally, the unemployment rate
has decreased as a result of foreign direct investment into the country. The Philippines
has become the 13th largest economy in Asia. Despite the challenges, organizations
like EY and the World Bank note that the Philippines has the potential to have a
flourishing economy.
– Jacob E. Lee
Agricultural Development in the Philippines
Southeastern Asian country of the Philippines faces many problems in the agricultural
sector. This sector employs around 37 percent of people in the country, being a major
source of income for many households.

Yet, this sector’s share in the country’s GDP has gone down over the years, showing a
decline. The Philippines government is also decreasing funding on agriculture. Starting
in 2011, agriculture only makes up about 4 percent of the national budget. This makes
agricultural development in the Philippines questionable.

To make matters worse, the Philippines is notoriously vulnerable to natural disasters,

facing around 20 typhoons each year. For farmers, one typhoon or tropical storm could
be enough to wipe out the entire crop. Starting over with the work can be expensive and
time-consuming. For example, coconut farmers need up to 10 years for their crops to
grow. The lack of financial support coupled with frequent natural disasters leaves
farmers in a compromising state.

As a result, 57 percent of agricultural households are impoverished. In comparison,

non-agricultural households are three times less impoverished. This rate is even worse
in agricultural-dependant areas, and reach up to 74 percent in Central Visayas.

Government’s Role in Agricultural Development in the Philippines

For these farmers, high poverty rates can be attributed to underemployment. Almost 70
percent of underemployed Filipinos work in agriculture, forestry or fishery. While many
farmers and agricultural workers are searching for employment, the Government of the
Philippines seems to be moving away from reliance on local farmers, turning to imports
instead.

In 2016, the Philippines was the biggest rice importer in the world, with close to 2.45
million tons of imported rice. The lowered funding and employment of Filipino farmers
put more than 12 million people who work in the agricultural sector at risk. Evidently,
more support needs to be given to farmers in order to reduce poverty. Consequently,
many poverty-fighting organizations target agricultural development in the Philippines.

IRRI and IPAC

The International Rice Research Institute (IRRI), for example, has developed a rice
variety that can survive natural disasters, especially floods. With funding from the Gates
Foundation, the IRRI hopes to increase rice yields by 50 percent in the next 10 years.
Based on an Indian rice variety called Swarma, this climate-smart rice has an additional
flood-resistant gene.

The rice was able to grow even after two weeks of flooding, whereas most rice varieties
would not survive more than four days. This is a huge advancement that can attribute to
the lingering agricultural issues in the Philippines.

The Philipinnes government is also working towards agricultural development by

implementing the Inclusive Partnerships for Agricultural Competitiveness (IPAC)
Project. Funded partially by the World Bank, the project works on expanding the
capacity of small farmers to make a living.

Through commercial agriculture and improved infrastructure, small-holder farmers can

increase their incomes and slowly become more self-reliant. Developing irrigation
systems in rural farming lands which is an important aspect of the project, makes
farming more efficient for the people of the Philippines. The project plays an important
role in reducing poverty, with 20 percent of the beneficiaries being poor farmers.

IFAC Projects in the Philippines

The International Fund for Agricultural Development (IFAD) has funded 16 projects that
aid farmers from the Philippines. One project, Convergence on Value Chain
Enhancement for Rural Growth and Empowerment (ConVERGE), helps Filipinos
develop their farms into larger businesses by utilizing value chains.
IFAD provides investment and business plans to 55,000 farming households in the
poorest parts of the Philippines. Through educating and guiding farmers, especially with
the use of sustainable farming methods, IFAD hopes to increase their incomes
and reduce poverty in the Philippines.

Through the combined efforts of organizations and the government, the issue of poverty
among farmers in the Philippines is being addressed. Still, more work needs to be done
in the field of agriculture development so that poverty rates in the country can begin to
decrease.

– Massarath Fatima
Sustainable Agriculture in the Philippines a model for the region

The Asian Food and Agriculture Cooperation Initiative (AFACI) created the Asian

Network for Sustainable Organic Farming Technology (ANSOFT) project in 2009. In
2015, sustainable agriculture in the Philippines was recognized out of 11 participating
ANSOFT nations with the “Outstanding Country” award.
ANSOFT looks to promote communication networks in terms of organic technology
development, both nationally and internationally.  The project produces a database of
successful organic farming techniques, pest and soil management, traditional practices
and knowledge of natural resources.

Here are more innovative projects underway in the region as the Philippines establishes
its reputation as a leader in developing sustainable agriculture:

Empoldering technique bolsters agriculture

Empoldering, a method of reclaiming low-lying land from bodies of water by building up

dikes and constructing drainage canals, has proven effective in the Philippines. After the
technique was implemented, a 2008 study found that empoldering improved the fish,
rice and vegetable production systems through better access to fresh water, as it
creates a new upland microenvironment. The microenvironment serves as a seedbed
and allows for the integration of fish into the rice crop.  The high-impact method helped
increase food availability and employment opportunities in farming, thereby increasing
food security for the region.

Pasali Philippines Foundation and “Brain Gain”

Sustainable Agriculture Programs of the Pasali Philippines Foundations are housed
under the larger concept called “From Brain Drain to Brain Gain”, a strategy to alleviate
poverty by investing technologies and skills learned nationally and internationally into
local development. The Brain Gain concept focuses on food security, economic
sustainability and environmental sustainability through climate change mitigation.
The Pasali Foundation backs sustainable agriculture programs that work toward
infrastructure support, capacity building, seed banking and agroforestry, as well as
addressing issues of land tenure and seeking the interest of microfinancing institutions.

Philippine Rural Development Project

In 2014, the World Bank approved financing for the Philippine Rural Development
Project. The project focuses primarily on farming infrastructure that supports sustainable
agriculture in the Philippines, including farm-to-market roads, bridges, greenhouses, fish
sanctuaries, solar dryers, and facilities for pre- and post-production and harvest storage.

The project estimates a direct impact for nearly two million farmers and fisherfolk, and
indirect impacts for 22 million citizens in the region. Currently in its fourth year, the
project expects to achieve major increases in the household incomes of farmers and
fisherfolk, as well as small business incomes and product values. The project also
partners with the Global Environment Facility, whose focus is on the conservation and
protection of selected coastal and marine areas in the region.

As recognized by AFACI and through the implementation of other ambitious initiatives,

the Philippines leads the way in setting the standard for sustainable farming practices in
Asia. Accordingly, sustainable agriculture in the Philippines may just set the standard for
alleviating poverty in Asia as well.

– Jaymie Greenway

Kapuluan Coconut: Improving Philippine Farming Communities

In 2013, the Philippines was struck by Typhoon Haiyan, wiping out the majority of
its leading agricultural product: coconut palm trees. Nearly 33 million trees were left in
ruins, inflicting economic strife upon Philippine farming communities.
Will Lauder, the founder of Kapuluan Coconut, initially had the purpose of visiting the
Philippines for a surf trip before hearing about the typhoon. Following the news of the
devastation left behind from the storm, Lauder adjusted his itinerary and traveled to the
Philippines to offer relief by delivering clean water to affected communities. It was this
first-hand experience that led Lauder to create Kapuluan Coconut as an initiative to
restore the mass desolation of coconut palms on the island through a “One for One”
program.
Although Filipino farming communities are a globally dominant source of coconut oil
production, farmers live under exploitative working conditions, according to the Food
and Agriculture Organization of the United Nations (FAO). Of the three million coconut
farmers within the industry, 60% live in extreme poverty. The quality and production of
coconut oil have been compromised through industrialization processes, inflicting a type
of “modern slavery” for coconut farmers.

Recognizing the reality of the coconut farming industry, Lauder created Kapuluan
Coconut in order to restore the Philippines’ source of coconut palms, enhance the
sustainability of farming conditions for coconut farmers and offer a coconut product with
the finest quality.

Lauder argues, “everyone supports Fair Trade coffee; what about coconut?” With this,
he implemented the “One for One” program which plants a palm tree for every Kapuluan
Coconut product sold. As a result, jobs will be created for sustainable coconut oil
farming thus providing an increase in prices, income, and job opportunities for Filipino
communities.

Kapuluan Coconut’s efforts are to restore the “tree of life” that drives Filipino agriculture
and to give back to local Filipino community organizations, such as the Lingap Center.
This past December, Kapuluan donated $5 per sale to the Lingap Center for children,
which offers assistance for children that have suffered from abuse, abandonment, and
exploitation.

By subscribing to the email list, users will instantly receive a 10% discount on their first
purchase while simultaneously helping to plant their first coconut tree. Through his
experience and initiative efforts to help improve Philippine farming communities, Lauder
says, “true happiness is… how helpful you are to people and to the world.”
– Amy Williams

Agricultural Policy Monitoring and Evaluation 2020

Assessment and Recommendations
 The Philippines’ key agricultural policy objectives focus on food security
and poverty alleviation through guaranteeing a stable supply of staple food (rice)
at affordable prices. The goal of self-sufficiency in rice has driven a range of
policy measures supporting rice producers – as opposed to the regional trend
toward the diversification into higher value commodities – while contributing to
the undernourishment of poor households that are heavy rice consumers and
effectively taxed by higher prices.
  An important institutional modification took place at the core of NFA,
where its new role is to increase the country’s emergency buffer stock. However,
the implementation of these reserves effectively generates an “intervention
stock” rather than an “emergency buffer stock” as it is supporting domestic prices
through buying stocks at administered prices; and reducing consumer prices by
selling those stocks at subsidised prices.
 In view of the Philippines’ high susceptibility to typhoons, tropical storms
and flooding, the government should adopt a holistic approach to risk
management and mainstream adaptation policy objectives across programmes
and institutions. Moreover, the effectiveness of current risk management tools
should be assessed – in particular, the extent to which insurance and cash-
transfer schemes encourage risk-reducing decision-making on the farm. Lastly,
farmers’ awareness should be increased by making information more readily
available about local conditions, future projections and adaptive solutions.
 The agricultural sector’s total factor productivity (TFP) growth is slower
than the world average and slower than in most countries in the region. This is
likely to be linked to decades of underinvestment, policy distortions, uncertainties
linked with the implementation of agrarian reform and periodic extreme weather
conditions. In 2017, the Philippines reallocated some funding from variable input
subsidies to investment in infrastructure and through the re-orientation of
agricultural knowledge systems. Continuing efforts to refocus budgetary support
on long-term structural reform is key to promoting productivity growth.
 Agricultural policies in the Philippines are designed and implemented by a
complex system of institutions. The government could strengthen institutional co-
ordination between the Department of Agriculture and other relevant
departments and institutions that develop and implement programmes supporting
agriculture; strengthen transparency and accountability of publicly-funded
programmes; accelerate efforts to build a solid policy-relevant statistical system;
and integrate monitoring and evaluation mechanisms into the policy process.
 The Philippines is one of the countries particularly vulnerable to climate
change. To improve the agricultural sector’s capacity to adapt to climate change
the government should make climate-adaptation policy objectives consistent
across programmes and institutions.
Policy responses in relation to the COVID-19 outbreak
Agriculture policies
The government of the Philippines issues the provisions related to continue agriculture
production as follows:1 1) all farming and fishing activities shall continue; 2) all farmers,
farm workers, fisher folk and agribusiness personnel shall be exempted from home
quarantine. Provided that they observe safety protocols and number is at a minimum;
3) all agricultural supply stores, outlets nationwide and animal clinics must be allowed to
operate under a skeletal force; 4) essential farm personnel (including veterinarians, farm
hands, farm and fisher folks) that works at production areas, bearing proper
documentation, are also requested passage at quarantine checkpoints.
The Department of Agriculture (DA) is promoting backyard vegetable gardens or
“survival gardens” as source of nutritious food during the enhanced quarantine period.
Some Local Government Units (LGUs) are distributing vegetable seeds.
The National Food Authority (NFA) has completed the prepositioning of rice stocks in
the country amid the enhanced community quarantine imposed in the entire Luzon,
Philippine’s most populous island. Some Local Government Units (LGUs) have bought
excess produce from the farmers in the local communities to be distributed as part of
the relief packs to those in need. Others have already prepositioned food packs for
distribution to its constituents. An LGU in Ifugao Province will be targeting indigent
constituents for the distribution of family food packs.
Agro-Food supply chain olicies
The Department of Agriculture has been issuing food lane passes. All vehicles carrying
essential food commodities, agro-fishery products and inputs bearing government-
issued stickers must be allowed passage at quarantine checkpoints through these food
lanes.
The National Police (PNP) designated a “Cargo Lane” for agriculture and fisheries
inputs and food products transported through all forms of conveyance (air, water, and
land), across all modes of deliveries. Priority for entry to cargo lanes shall be given to
truckers/suppliers with Food Pass 2. Food pass accreditation is free of charge 3. DA
accredits suppliers and trucks to use the “Food Lane” (Cargo Lane) 4.
The DA identifies a list of food items that must be allowed unhampered and unimpeded
in all quarantine checkpoints: a) all vehicles carrying crop commodities, and fishery and
other aquatic products with carriers must be allowed passage; b) live poultry and
livestock, including meat and meat products, are allowed passage only with proper
documentation as in DA MC No. 5 series of 2020; c) movement of products and
services related to farm inputs is requested for unhampered passage on quarantine
checkpoints.
The Inter-Agency Task Force on Emerging Infectious Diseases (IATF-EID) has
approved the food resiliency protocol proposed by the Department of Agriculture (DA) to
speed up the transport of major agro-fishery commodities to Metro Manila and other
urban areas in Luzon.
The DA is co-ordinating with the LGUs to ensure that households affected by the
enhanced community quarantine will have access to the food supply. The DA’s
distribution and marketing system identifies drop-points where farmers can directly sell
their goods at retail prices, and where people can buy major agricultural goods at
reasonably low prices. This marketing strategy directly connects the food producers to
consumers, thereby lessening the cost of food products. It links the LGU in urban
centres to farmer-producers in the different parts of the country to ease the delivery and
distribution of food supply.
Consumer policies
The National Nutrition Council (NNC) issued their first Nutrition Cluster Advisory to
support and remind the Local Government Units (LGUs) of useful guidelines that would
prevent deterioration of nutrition. Government agencies continue to provide information
and reminders on eating healthy at this time of crisis.
The Department of Social Welfare and Development (DSWD) provided official
communication regarding the continuity of its major cash transfers programmes such as
the Pantawid Pamilyang Pilipino Program (4Ps) and decided to do payouts earlier than
scheduled.
The Department of Agriculture, Department of Trade and Industry (DTI), and the
Department of Health (DOH) issued a joint memorandum circular imposing a 60-day
price freeze for basic goods and agriculture products nationwide. Pricing is being
monitored by DA (some spot-checks are being done jointly by DA and DTI) and
information is released every two days.
Figure 22.1. Philippines: Development of support to agriculture

Support to producers (%PSE) was around 27% in 2017-19, a higher number than the
levels observed in 2000-02 (Figure 22.1). However, PSE declined from 2018 to 2019
due to a smaller price gap between domestic prices and world prices (Figure 22.2).
Almost all producer support is provided through market price support (MPS), with a
strong focus on rice. MPS and input subsidies without input constraints, both considered
as potentially most distorting forms of support, explain practically the total value of
support to producers. On average, prices received by farmers were 39% higher than
world prices in 2017-19 (compared to 31% in 2000-02). MPS is also the main
component of Single Commodity Transfers (SCT): rice, sugar and poultry and pig meat
had the highest share of SCT in commodity gross farm receipts in 2017-19 (Figure
22.3). Expenditures for general services (GSSE) relative to agricultural value added
more than doubled from 2000-02 to 2017-19, driven largely by higher investments in
irrigation systems (Figure 22.1).

Figure 22.2. Philippines: Drivers of the change in PSE, 2018 to 2019

Figure 22.3. Philippines: Transfer to specific commodities (SCT), 2017-19

Table 22.1. Philippines: Estimates of support to agriculture

Million USD
 2000-02 2017-19 2017 2018 2019p

Total value of production (at farm gate) 9 727 27 635 27 846 28 333 26 727

of which:  share of MPS commodities (%) 89.2 93.5 93.3 93.7 93.4

Total value of consumption (at farm gate) 9 950 29 578 29 645 30 274 28 815

Producer Support Estimate (PSE) 2 167 7 635 7 088 8 491 7 327

Support based on commodity output 2 094 7 330 6 831 8 165 6 995

Market Price Support1 2 094 7 330 6 831 8 165 6 995

Positive Market Price Support 2 134 7 332 6 837 8 165 6 995

Negative Market Price Support -40 -2 -7 0 0

Payments based on output 0 0 0 0 0

Payments based on input use 69 297 254 316 321

Based on variable input use 36 147 117 161 163

with input constraints 0 0 0 0 0

Based on fixed capital formation 32 150 137 155 158

with input constraints 0 0 0 0 0

Based on on-farm services 0 0 0 0 0

with input constraints 0 0 0 0 0

Payments based on current A/An/R/I, production required 0 0 0 0 0

Based on Receipts / Income 0 0 0 0 0

Based on Area planted / Animal numbers 0 0 0 0 0

with input constraints 0 0 0 0 0

Payments based on non-current A/An/R/I, production required 0 0 0 0 0

Payments based on non-current A/An/R/I, production not required 0 0 0 0 0

With variable payment rates 0 0 0 0 0

with commodity exceptions 0 0 0 0 0

With fixed payment rates 0 0 0 0 0

with commodity exceptions 0 0 0 0 0

Payments based on non-commodity criteria 0 0 0 0 0

Based on long-term resource retirement 0 0 0 0 0

Based on a specific non-commodity output 0 0 0 0 0

Based on other non-commodity criteria 0 0 0 0 0

Miscellaneous payments 5 8 4 10 10

Percentage PSE (%) 22.0 27.4 25.2 29.6 27.1

Producer NPC (coeff.) 1.31 1.39 1.34 1.45 1.38

Producer NAC (coeff.) 1.28 1.38 1.34 1.42 1.37

General Services Support Estimate (GSSE) 244 1 598 1 536 1 615 1 642

Agricultural knowledge and innovation system 56 326 341 316 321

Inspection and control 14 60 55 62 63

Development and maintenance of infrastructure 155 1 013 951 1 036 1 053

Marketing and promotion 6 53 65 47 48

Cost of public stockholding 12 123 101 133 135

Miscellaneous 1 22 23 21 22

Percentage GSSE (% of TSE) 10.1 17.3 17.8 16.0 18.3

Consumer Support Estimate (CSE) -2 250 -7 831 -7 289 -8 633 -7 569

Transfers to producers from consumers -2 299 -7 553 -6 922 -8 473 -7 265

Other transfers from consumers -152 -636 -614 -661 -634

Transfers to consumers from taxpayers 0 0 0 0 0

Excess feed cost 201 359 246 501 330

Percentage CSE (%) -22.5 -26.5 -24.6 -28.5 -26.3

Consumer NPC (coeff.) 1.32 1.38 1.34 1.43 1.38

Consumer NAC (coeff.) 1.29 1.36 1.33 1.40 1.36

Total Support Estimate (TSE) 2 411 9 233 8 625 10 105 8 969

Transfers from consumers 2 451 8 189 7 535 9 134 7 899

Transfers from taxpayers 112 1 680 1 703 1 632 1 703

Budget revenues -152 -636 -614 -661 -634

Percentage TSE (% of GDP) 3.0 2.9 2.8 3.1 ..

Total Budgetary Support Estimate (TBSE) 318 1 903 1 794 1 941 1 973
Percentage TBSE (% of GDP) 0.4 0.6 0.6 0.6 ..

GDP deflator (2000-02=100) 100 177 173 180 ..

Exchange rate (national currency per USD) 48.96 51.62 50.40 52.67 51.80

Contextual Information
The Philippines is a mid-size country in terms of land area, but its population of
107 million makes it the world’s 13th most populous country. At USD 8 951 in purchasing
power parity (PPP), GDP per capita in the Philippines is less than half the average GDP
per capita of all countries analysed in this report (Table 22.2). Agriculture is an
important sector for the Philippines, accounting for a quarter of total employment and
9% of GDP (Table 22.2). Farms tend to be small-sized with the average landholding at
just 1.3 hectare.
Since 2012, the Philippines has achieved relatively stable growth of around 6%
annually, and reduced its rate of unemployment (Figure 22.4). Inflation has fallen to a
low of less than 1% in 2015 before rising again. Overall, the Philippine economy,
including its agro-food sector, integrates well in international markets – as measured by
the ratio of trade to GDP at 28% in 2018.

Table 22.2. Philippines: Contextual indicators

  Philippines International comparison

  2000* 2018* 2000* 2018*

Economic context     Share in total of all countries

GDP (billion USD in PPPs) 262 955 0.7% 0.8%

Population (million) 78 107 1.8% 2.1%

Land area (thousand km2) 298 298 0.4% 0.4%

Agricultural area (AA) (thousand ha) 11 234 12 440 0.4% 0.4%

      All countries¹
Population density (inhabitants/km2) 262 358 53 62

GDP per capita (USD in PPPs) 3 361 8 951 9 275 21 924

Trade as % of GDP 46 28 12.4 15.3

Agriculture in the economy     All countries¹

Agriculture in GDP (%) 14.0 9.3 3.1 3.6

Agriculture share in employment (%) 37.1 25.2 - -

Agro-food exports (% of total exports) 4.0 7.7 6.2 7.3

Agro-food imports (% of total imports) 7.3 11.3 5.5 6.3

Characteristics of the agricultural sector     All countries¹

Crop in total agricultural production (%) 63  59 - -

Livestock in total agricultural production (%) 37  41  - -

Share of arable land in AA (%) 45 45 32 33

With limited land and a large population, the Philippines is a growing net importer of
agro-food products. Of these imports, three-quarters are processed goods that are used
directly for (final) consumption or as intermediate inputs by the processing industry. On
the export side, 40% are exports of primary goods for consumption. Overall, half of all
agro-food exports are going to final consumers (both primary and processed products),
while the other half is further processed (Figure 22.5).
Figure 22.4. Philippines: Main economic indicators, 2000 to 2019

Figure 22.5. Philippines: Agro-food trade

Total Factor Productivity (TFP) in agriculture is estimated to have stalled over the past
ten years, down from already low TFP growth during the 1990s. Agricultural output
growth has remained relatively weak and has averaged 0.5% per year, well below the
world average (Figure 22.6). It has been driven entirely by increased use of both
primary factors and intermediary inputs.
Agricultural land resources are under strain from frequent natural disasters, population
growth and urbanization. The Philippines has abundant water resources, of which the
agricultural sector is the main user – accounting for almost 80% of total freshwater
withdrawals (Table 22.3). Nonetheless, shortages can occur during the dry season in
some regions. Agriculture share in total energy use has increased, but remains well
 below the OECD average. The Nitrogen balance has slightly increased, while that of
Phosphorus has declined, but both remain well above the OECD average.
Figure 22.6. Philippines: Composition of agricultural output growth, 2007-16

Table 22.3. Philippines: Productivity and environmental indicators

  Philippines International comparison

  1991-2000 2007-2016 1991-2000 2007-2016

      World

TFP annual growth rate (%) 0.80% -0.01% 1.6% 1.6%

    OECD average

Environmental indicators 2000* 2018* 2000* 2018*

Nitrogen balance, kg/ha 57.9 60.3 33.3 29.1

Phosphorus balance, kg/ha 7.4 5.2 3.3 2.3

Agriculture share of total energy use (%) 0.2 0.8 1.7 2.0

Agriculture share of GHG emissions (%) 29.2 .. 8.1 8.9

Share of irrigated land in AA (%) .. 15.2 - -

Share of agriculture in water abstractions (%) 83.1 79.6 46.0 49.0

Water stress indicator .. .. 9.9 8.9

Description of Policy Developments

Main Policy Instruments
Various measures provide price support to Philippine producers. Price support policies
mainly focus on rice and sugar and comprise a combination of trade barriers and
domestic market regulation. The system of quantitative restrictions for rice was
abolished in March 2019. The rice price support policy is also implemented by the
National Food Authority (NFA) through buying buffer stocks at administered prices from
domestic producers, and selling these stocks at subsidised prices to consumers. Up to
March 2019, the NFA also handled import restrictions. For sugar, production quotas and
trade barriers are used for producer price support and market regulation.
Tariff protection remains the Philippines’ main trade policy tool. Trade liberalisation
has primarily occurred within regional trade agreements, particularly the ASEAN Free
Trade Area. The simple average applied Most Favoured Nation tariff on agricultural
products was 9.8% in 2016. All tariff lines applied are ad valorem and range from 0% to
65%.
Tariff rate quotas are applied for 14 agricultural products, with in-quota tariffs ranging
from 30% to 50% and out-of-quota from 35% to 65%. Products covered include live
swine, goats and poultry and meat thereof, potatoes, coffee, maize, rice, and sugar.
However, for three agricultural products (live horses, live bovine animals and beef), the
TRQs are not applied. For three others (poultry meat, potatoes and coffee), it is only
applied to a specific range of tariff lines (WTO, 2018[1]). Import licensing is required for
all regulated products (including those under TRQs) and is intended to safeguard public
health, national security and welfare.
In order to offset the effect of the liberalisation of rice imports (see section on trade
policy developments), the government established a Rice Competitiveness
Enhancement Fund (RCEF) with an annual appropriation of PHP 10 billion
(USD 192.3 million) over the next six years (see the domestic policy development
section). Several agricultural commodities are subject to export controls and require
permits in addition to agency approval, namely grains and grain products, and sugar.
Budgetary support to agricultural producers, both through payments provided to
farmers individually and to the agricultural sector as a whole (general services), is small
compared to the importance of price support. During the 2000s, the main focus of
budgetary support to producers was on subsidising the use of variable inputs, including
seed and fertiliser subsidies. However, investment subsidies have increased in recent
years. In 2019, such support increased due to the introduction of additional payments to
rice producers in the form of seed and investment subsidies, compensating the
liberalisation of rice trade.
Expenditures for key services to the agricultural sector have increased significantly
since the end of the 2000s. The most important item is the development and
maintenance of infrastructure, of which a major share is devoted to off-farm investments
in irrigation systems. Financing extension services is another and increasingly important
element of public support for the sector.
Since 1988, the Philippines has been undertaking an ambitious agrarian reform that
covered close to three-quarters of the country’s total agricultural area. By end-2015, the
redistribution of land was almost complete, but property rights remain to be settled.
Almost half of the reform beneficiaries still have only collective ownership certificates
instead of individual property rights. Various restrictions on land-market transactions
and insecure property rights continue to limit on-farm investment and to weaken the
potential economic benefits of the reform.
Domestic Policy Development 2019-20
Important institutional measures related to the changes in rice trade and related
domestic market regulation were introduced by the Rice Tariffication and Liberalisation
Law. The food safety regulatory function, and hence the responsibility for issuing
permits, licenses, or registering trade and importation of rice has been transferred from
the National Food Authority (NFA) to the Bureau of Plant Industry (BPI).
Today, the main role of the NFA consists of local paddy procurement from domestic
producers and the management of buffer-stocks including sales to the domestic
markets. In September 2019, the Department of Agriculture (DA) instructed the NFA to
intervene on the domestic market by selling domestic rice from its buffers at PHP 27
(USD 0.52) per kg in order to lower consumer prices. In addition to the unloading of
NFA rice stocks, the DA has instructed the agency to increase the buying price of rice
into buffer (intervention) stocks from PHP 17 to PHP 19 (USD 0.33 to USD 0.37) per kg
of rice (dried and cleaned). The President also ordered the NFA to increase the
country’s emergency buffer stock from 15 to 30 days by buying more rice from farmers
and increase the turnover of the stocks. In reality, these stocks are playing more a role
of an “intervention stock” rather than an “emergency buffer stock” with two functions:
(i) supporting domestic prices through buying stocks at administered prices; and
(ii) reducing consumer prices in the market by releasing from stocks at subsidised
prices.
In order to offset the effect of the liberalisation of rice imports the government
established A Rice Competitiveness Enhancement Fund (RCEF) with an annual
PHP 10 billion (USD 192.3 million) appropriation through the next six years. In 2019, the
expenditures were planned to be spent as follows: (i) PHP 5 billion for rice farm
machinery and equipment; (ii) PHP 3 billion for rice seed development, propagation and
promotion; (iii) PHP 1 billion for credit to farmers; and (iv) another PHP 1 billion for
extension.
In addition, PHP 3 billion (USD 57.9 million) were provided in the form of an
unconditional cash transfer to benefit 600 000 small rice farmers (less than 2 hectares
planted for rice). Another PHP 2.5 billion (USD 48.2 million) went to finance the
Expanded Survival and Recovery Assistance (SURE Aid) programme, which provides a
PHP 15 000 zero-interest loan, payable in eight years to farmers tilling one hectare or
less of rice.
Trade Policy Development 2019-20
Since joining the WTO in 1995, the Philippines has been applying quantitative
restrictions (QRs) on rice imports, as it benefited from a special treatment clause
(Article 5 of the Agreement on Agriculture) which allowed QRs on rice imports to be
maintained until 2012, on the basis of food security. In 2012, the Philippines requested
a new extension of its special treatment for rice through a waiver until 2017. In order to
comply with its WTO obligations, the Philippines replaced the quantitative restrictions
(QRs) on rice imports with a tariff system as of March 2019, under the “Rice Tariffication
and Liberalisation Law” (RA 1120). For imports from ASEAN countries, no quota is
applied only a single tariff of 35%. For imports from non-ASEAN countries, a tariff rate
quota (TRQ) is established. Applied MFN in-quota and out-of-quota tariffs for rice are
set at 40% and 180%, respectively. The Minimum Access Volume (MAV) for rice
reverted from 800 000 tonnes to the 2012 level of 350 000 tonnes. The export
restrictions for rice were eliminated.
On 13 June 2019, the government issued Executive Order No. 82, reverting tariff rates
for Mechanically Deboned or Mechanically Separated Poultry from 40% to 5%, while
those for frozen whole turkey were reduced from 40% to 20%. These rates are set to
remain at the lower tariff until 31 December 2020. Executive Order No. 20, issued in
2017, prescribes the Most Favoured Nation (MFN) tariff schedule until 31 December
2020. A new MFN tariff schedule, is expected to be released before the end of 2020,
setting tariff rates for all products.