By Revin Mikhael D. Ochave, Reporter
FULL-YEAR agriculture output contracted for the first time since 2016, after the sector was battered by the coronavirus disease 2019 (COVID-19) pandemic, a series of devastating typhoons, and the continued outbreak of African Swine Fever (ASF).
The Philippine Statistics Authority (PSA) reported on Wednesday that agriculture output, which contributes about a tenth to gross domestic product (GDP) and a fourth of the country’s jobs, shrank by 1.2% in 2020, a reversal from the 0.3% growth in 2019.
This was the first time the agricultural output saw an annual decline since 2016’s -1.5%.
In the fourth quarter, farm output slumped by 3.8%, worse than the -0.1% recorded in the same quarter of 2019 and the 0.7% growth in the third quarter.
This dismal performance makes it unlikely that fourth-quarter GDP, set to be announced today, will get a lift from the agriculture sector.
The PSA noted a drop in crops, livestock, poultry and fisheries production during the October to December period, when a series of strong typhoons hit parts of Luzon.
“We believe that despite the Taal Volcano eruption, COVID-19 pandemic, continued incidence of the ASF, and a series of strong typhoons, the country’s agriculture and fishery sector has remained pliant and resilient, facing head on and surmounting the huge challenges last year,” Agriculture Secretary William D. Dar said in a statement on Wednesday.
After missing the 1.5% growth target last year, the Department of Agriculture (DA) is aiming to achieve 2.5% growth this year.
Q4 SLUMP
In the fourth quarter, crops output declined by 0.4% versus the 1% growth it posted a year ago, as palay (unhusked rice) and corn production dropped 1.4% and 0.3%, respectively. Improvements were seen in production of tobacco (13.4%), sugarcane (10%) and cacao (7.1%) during the period.
For the full year, crops production improved by 1.5%, led by increases in sugarcane (19%) and cacao (10%).
Mr. Dar said production of rice and corn are seen to increase in 2021, as long as there are no strong typhoons. The government has allocated around P20 billion in programs to improve output in the two subsectors.
In a mobile phone message, Roy S. Kempis, a professor at Pampanga State Agricultural University (PSAU) said it should be noted that crops output only slipped by 0.4% for the fourth quarter despite the typhoons.
“This means that crops such as rice, corn, fruits, and vegetables have been harvested before the typhoons arrived,” Mr. Kempis said.
Typhoons Quinta, Rolly, Ulysses and Vicky, swept through the country in the last three months of 2020. Data from the DA showed the combined crop damage caused by Quinta and Rolly reached P8.46 billion, while losses from Ulysses amounted to P6.72 billion, and damage from Vicky totaled P129.8 million.
Rolando T. Dy, executive director of Center for Food and Agri-Business of the University of Asia and the Pacific (UA&P) said in a mobile phone message that the sector can improve in 2021 by focusing on hybrid rice and by consolidating mechanization to increase yield.
IMPACT OF ASF
Livestock production, which accounted for 15.4% of total agricultural output, slipped by 12.9% in the fourth quarter. Hog production decreased by 13.8% during the period, as the ASF outbreak persisted.
Poultry production slumped by 5.5% in the October to December period, bringing the full-year decline to 3.5%. Chicken production declined by 7.9% in the fourth quarter.
“Expectedly, the livestock and poultry subsectors performed poorly due to the ASF incidence in Central Luzon and low demand of chicken due to limited operation of fastfood chains and restaurants,” Mr. Dar said.
He said the DA has set aside an initial budget of P500 million for loans to backyard and semi-commercial raisers in an effort to improve local poultry production.
PSAU’s Mr. Kempis said the decline in poultry output was a surprise since he expected it to grow as Filipino consumers look for a substitute to pork.
“I believe factors that may have affected is the closure of poultry farms as a result of the crackdown by local government units on farms that adversely affect the environment with flies and obnoxious odor, and conflict between contract growers and integrators,” Mr. Kempis said.
United Broilers Raisers Association (UBRA) Chairman Gregorio A. San Diego said the poultry industry’s losses were more than what PSA data showed, adding this was the reason for the rise in the retail price of chicken.
Based on latest price monitoring from the DA, the price of whole chicken ranges at P160 to P200 per kilogram.
Similarly, DA reports showed that the price of pork shoulder, or kasim, ranges from P340 to P400 per kilogram, while pork belly, or liempo, is priced from P320 to P440 per kilogram, well above their suggested retail prices (SRP).
As a result, the DA recently proposed an executive order to put a price ceiling on the said products. If signed, the price of pork shoulder will be at P270, pork belly at P300, and whole chicken at P160.
FISHERIES
Fisheries production fell 4.7% during the fourth quarter of 2020, a turnaround from the 2% growth it posted in 2019. This brought the value of production of the fisheries subsector to drop by 1.2% versus a growth of 1.5% the previous year.
The PSA said fish species such as fimbriated sardines, blue crab, threadfin bream, tiger prawn, tilapia, and yellowfin tuna posted lower output.
Asis G. Perez, Tugon Kabuhayan convenor and former national director of the Bureau of Fisheries and Aquatic Resources (BFAR), said the lower fisheries output can be attributed to recent typhoons.
“Major production areas for aquaculture and capture fisheries such as the Calabarzon Region and Bicol Region were devastated,” Mr. Perez said in a mobile phone interview.
However, Mr. Perez said the subsector is seen to quickly bounce back in 2021 since the fishing boats that were damaged during the recent typhoons have already been replaced or repaired, thus allowing fishermen to return to fishing.
“Further, the closed fishing season for roundscad (galunggong) will end on Jan. 31. It will augment the country’s fish supply,” Mr. Perez said.
FULL-YEAR agriculture output contracted for the first time since 2016, after the sector was battered by the coronavirus disease 2019 (COVID-19) pandemic, a series of devastating typhoons, and the continued outbreak of African Swine Fever (ASF). Read the full story.
THE Philippine trade deficit widened to a nine-month high in December as month-on-month imports went up, potentially indicating improved consumer imports as economic activity picks up, data from the Philippine Statistics Authority (PSA) showed on Wednesday. Read the full story.
By Jenina P. Ibañez, Reporter
THE Philippine trade deficit widened to a nine-month high in December as month-on-month imports went up, potentially indicating improved consumer imports as economic activity picks up, data from the Philippine Statistics Authority (PSA) showed on Wednesday.
Preliminary data from the PSA said that the value of merchandise exports fell 0.2% to $5.7 billion in December, reversing the 4% increase seen in November.
This drove the full-year export tally to $63.8 billion, or 10.1% lower than 2019 exports, better than the Development Budget Coordination Committee’s (DBCC) 16% decline estimate for 2020.
Merchandise imports shrank 9.1% to $7.9 billion in December from the same month in 2019 as it registered a year-on-year decline for the 20th straight month. But imports had improved month on month, rising 4.5% since November.
For full-year 2020, imports fell 23.3% to $85.6 billion from the comparable 12 months in 2019, worse than the DBCC’s revised target of a 20% decline for the full year.
The trade-in-goods deficit in December as a result amounted to $2.18 billion, down from the previous month’s $1.73 billion but still narrower than the $2.96 billion in the same month in 2019.
This brought the cumulative trade deficit for 2020 to $21.839 billion, smaller than the $40.67-billion gap a year earlier.
Total external trade in goods for the year — or the sum of export and import goods — plummeted by 18.2% to $13.66 billion.
Export sales of manufactured goods, which made up 87% of total sales in December, inched up 3.5% to $4.98 billion from the same month in 2019.
Electronics products exports — which accounted for 63% of merchandise goods — rose 4.9% to $3.61 billion. Agriculture-based exports slumped 46.8% to $186 million.
Meanwhile, imports of capital goods, which accounted for 34% of December imports, fell 12.5% to $2.7 billion compared with the same month a year earlier. Imports of mineral fuels, lubricant, and related materials slipped 50.8% to $644 million.
Imports of raw materials and intermediate goods went up 7.3% to $3 billion, while imports of consumer goods increased by 1.5% to $1.45 billion.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said lower outbound shipments to major trading partner China and a decline in agri-based exports impacted by recent typhoons weighed on an export sector that had expected expansion.
He noted the continued decline in imports was caused mostly by shrinking capital and fuel imports.
“Of note, however, was the surprise gain in consumer imports, eking out a 1.5% increase for the month which could give an indication of some resumption of economic activity as select lockdown measures continue to be relaxed,” he said in an e-mail.
According to Rizal Commercial Banking Corp. Economist Michael L. Ricafort, exports could have also been subdued due to a stronger peso exchange rate and slow recovery from export destination markets that saw a renewed surge in coronavirus disease 2019 (COVID-19) cases.
He said measures to reopen the economy supported faster monthly growth in imports.
“Resilience in foreign direct investment data could have also led to faster growth in imports, especially for capital equipment and other production inputs,” he said.
OUTLOOK
Mr. Mapa said that fragile global recovery would limit export gains in 2021, while import demand remains subdued by lower investment activity from both firms and households.
“The net effect of these trends will mean that the 2021 trade deficit remains below the pre-COVID-19 of $3.1 billion, which in turn would be supportive of (the Philippine peso) as corporate demand for the dollar remains soft,” he said.
Milo K. Gusaninghe, JPMorgan EM Asia Associate, said in an e-mail that slow economic recovery would mean that a widening of the trade deficit would materialize in the second half.
Imports and exports could pick up this year, Mr. Ricafort said, if economies recover and the number of COVID-19 cases fall. Government spending on infrastructure could increase capital equipment and construction materials imports, he added.
“An offsetting risk factor is the new variants/strains of the coronavirus that are more contagious, leading to some lockdowns and travel restrictions in Europe and in other countries around the world, including the major export markets/trading partners of the Philippines, thereby could slow down the economic recovery prospects, as well as the pick up in demand for Philippine exports and imports,” he said.
By Beatrice M. Laforga, Reporter
THE Philippine economy shrank a little less than previously estimated in the third quarter, the Philippine Statistics Authority (PSA) said on Wednesday.
In a statement, the PSA said Philippine gross domestic product (GDP), which indicates the value of final goods and services produced within a country during a specific period, contracted by 11.4% in the third quarter. This was a tad better than the initial 11.5% GDP contraction reported in November.
The government is scheduled to announce the preliminary estimates for fourth-quarter GDP today.
The PSA said several subsectors posted slower declines based on the updated data, namely Real Estate and Ownership of Dwellings (-19.4% from -22.5%); Education (-17.8% from -21.4%); and Other Services (-49.9% from -53.4%).
The upward revisions have been partly tempered by the faster-than-expected decline in net primary income (NPI) received from countries abroad to -29% from the -28.2% previously reported.
Despite this, the 13% year-on-year decline for gross national income (GNI) was unchanged for the third quarter.
The nine-month GDP average also remained at -10%.
Several economists said the slight improvement in the third-quarter GDP will not affect their current projections.
“It won’t affect my projections just yet. Pero ’yung (but for the) agriculture output, that’s concerning. I won’t be surprised if GDP has contracted in double digits,” said Security Bank Chief Economist Robert Dan J. Roces, who projected a 9.5% decline for the fourth quarter and a 9.9% drop for the entire year.
Agriculture output declined by 1.2% last year after the fourth-quarter production fell by 3.8%, following the devastation caused by a string of typhoons. This marked the first time the agricultural output posted an annual decline since 2016, when it shrank by 1.5%.
Ruben Carlo O. Asuncion, the chief economist at the UnionBank of the Philippines, Inc., revised his GDP projection to -6.5% (from -5%) for the fourth quarter and -9.1% (from -8.6%) for the full year.
“Downside risks may have been overlooked from weaker-than-expected government expenditures and also a weaker-than-expected export performance for the year,” he said via e-mail.
The PSA said on Wednesday that the trade deficit widened to $2.18 billion in December from the $1.725-billion gap in November last year, bringing the full-year 2020 shortfall to $21.84 billion.
Economic managers projected that last year’s GDP may have dropped by 8.5-9.5%.
