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Agriculture contributing less to GDP for past 5 years

Louise Maureen Simeon (The Philippine Star) - July 2, 2020 - 12:00am

MANILA, Philippines  — The agriculture sector’s contribution to the national economy has declined for five consecutive years as low productivity remains a challenge for the farm industry.

Based on the latest Agriculture Indicators System of the Philippine Statistics Authority (PSA),  agriculture, forestry and fishing remains the lowest contributor among the three major sectors of the economy.

The performance of the country’s agriculture sector can be monitored through the year-on-year growth of gross value added (GVA), which refers to the difference between the gross output and intermediate consumption used in the production process.

In 2019, the GVA in agriculture valued at P1.78 trillion registered a declining share of 9.2 percent from the previous year’s record of 9.7 percent.

The services sector got the bulk at 60.6 percent, followed by the industry sector at 30.2 percent.

Over the last five years, agriculture’s contribution to GDP has been on a downward trend.

In 2015, its share was 11.3 percent. This went down to 10.4 percent in 2016, and further dipped to 10.1 percent in 2017.

It decreased to 9.7 percent in 2018 and settled at a lower contribution of 9.2 percent last year.

Agricultural economist and University of Asia and the Pacific professor Rolando Dy said the sector has been growing at a much slower pace compared to the other sectors.

“The reason why agriculture share is low is because of low productivity and poor diversification. These affect our food manufacturing and exports,” Dy told The STAR.

“But don’t forget that some 10 percent of manufacturing GDP comes from agri-food industries. Add to that are services like transport, cold storage, packaging products, restaurants and quick service restaurants could be another 15 percent,” he said.

Further, agricultural crops posted another decline in GVA at two percent from the negative growth of 0.7 percent in the previous year.

Among the crops, continuous contractions in GVAs in 2019 were noted in palay (unhusked rice) sugarcane, coffee and cassava. Corn, mango, abaca and tobacco recovered from the slump and registered increases last year.

For livestock, GVA dropped by 0.8 percent from the positive growth a year ago. Poultry and egg production had higher increment by 5.8 percent relative to last year’s record.

GVA for other animal production was highest at 31.8 percent. Fishing and aquaculture recovered from last year’s downtrend and came up with an increase by 2.5 percent.

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