August 18, 2022

It has been 25 days since the new administration took over the reins of government. The cabinet has been almost fully staffed. The Secretaries of the various Departments are putting together their programs and priority agenda. To be sure, they have their hands full. In the midst of the effort to restore economic activity, headwinds continue to blow stronger everyday – geopolitical unrest, rising oil prices, continuing COVID threats, runaway inflation in major economies and our own, rising interest rates, a depreciating Philippine peso and food supply disruptions.

Taking stock of the government they inherited, surely there is some urgent housekeeping to attend to. Perhaps, the most urgent matter needing attention is replenishing  largely diminished coffers just halfway through the fiscal year. Then, there is, of course, the matter of helping Filipinos literally put food on their tables. As well, the call remains to assure the well being of the populace by fortifying defenses against the lingering COVID-19 virus.

The country is looking forward to listening to the first State of the Nation Address (SONA) of President Ferdinand R. Marcos, Jr. It will be recalled during the election campaign that the camp of Marcos and Duterte was cited for not providing any details about their planned program of government. Thus, the keen interest in what President Marcos, Jr. will have to say.

Many sectors and public figures have weighed in on what they would like to hear during the SONA. I, too, have my hopes, top of which are food security and agriculture, industrialization and regional development and education. Yes, I will be listening intently.

Overall, however, I am hoping that the SONA will have a positive and aspirational tone. It is my wish that the President  affirms the good things, strengths and abilities of the country. I feel that, too often, we are a people who beat ourselves over for missed chances and wasted opportunities. We trip on our own best intentions. And we tend to short change ourselves on what we can do as a nation, thus compromising our goals even before we set out to pursue them.

I believe that there is much that we can achieve given a cohesive and all-of-nation approach to solving our basic problems. Take the field of agriculture, for example. A report from Statista shows that the contribution of agriculture to gross domestic product (GDP) has dropped from around 14% at the start of the 2010’s to a low of 8.8% in 2019, rising slightly to 10.2% in 2020. Interestingly, industry has also dropped from 32% in 2010 to 28% in 2020. Services, on the other hand, has grown from 54% to 61% from 2010 to 2020.

There is something to be said about the sectoral contributions to GDP. I would argue that both agriculture and industry have a much more significant value-add to the economy than the services sector. A telling sign that agriculture is continuing to be marginalized is that no major business enterprise has lent their prowess to the sector. Why is that? To be sure, land banking has been a constant and rising interest of the private sector but more for residential or commercial ventures and not for agriculture. 

I think that the hesitancy to get behind agri-preneurship has to do with a Presidential Decree that limits ownership of agricultural lands to 5 hectares. Ostensibly, this has to do with socializing land ownership. In the real world, though, this undermines economies of scale and the efficient use of farm resources. 

Economists might argue that it might be cheaper to import food than produce it locally. I see the merit of this argument but I think government must be competitive and forward looking in securing supplies in the open market. If not, food security will forever haunt our country of 110 million Filipinos. It might probably make sense to have a good balance of local production – maybe of staples – and imports to assure resiliency in our supply chain.

I would extend the same view to the industry sector. Compared to the service sector, investments in manufacturing are more long term. The jobs that the sector creates and the value-add they provide to the economy are also more significant. As importantly, the degree of technology transfer keeps the country at pace with other countries in terms of innovation. 

I believe that it is imperative for government to have a blueprint that will  assure our place in the supply chain of globally traded products. Admittedly, it will be difficult for us to compete in the manufacture of leading edge products and components. Given our development stage, however, this may not be a bad thing.

We have the chance to grow our way out of the prevailing economic challenges. The SONA will hopefully show the way to better days ahead.

For comments: vincesocco101@gmail.com

It has been 25 days since the new administration took over the reins of government. The cabinet has been almost fully staffed. The Secretaries of the various Departments are putting together their programs and priority agenda. To be sure, they have their hands full. In the midst of the effort to restore economic activity, headwinds continue to blow stronger everyday – geopolitical unrest, rising oil prices, continuing COVID threats, runaway inflation in major economies and our own, rising interest rates, a depreciating Philippine peso and food supply disruptions.

Taking stock of the government they inherited, surely there is some urgent housekeeping to attend to. Perhaps, the most urgent matter needing attention is replenishing  largely diminished coffers just halfway through the fiscal year. Then, there is, of course, the matter of helping Filipinos literally put food on their tables. As well, the call remains to assure the well being of the populace by fortifying defenses against the lingering COVID-19 virus.

The country is looking forward to listening to the first State of the Nation Address (SONA) of President Ferdinand R. Marcos, Jr. It will be recalled during the election campaign that the camp of Marcos and Duterte was cited for not providing any details about their planned program of government. Thus, the keen interest in what President Marcos, Jr. will have to say.

Many sectors and public figures have weighed in on what they would like to hear during the SONA. I, too, have my hopes, top of which are food security and agriculture, industrialization and regional development and education. Yes, I will be listening intently.

Overall, however, I am hoping that the SONA will have a positive and aspirational tone. It is my wish that the President  affirms the good things, strengths and abilities of the country. I feel that, too often, we are a people who beat ourselves over for missed chances and wasted opportunities. We trip on our own best intentions. And we tend to short change ourselves on what we can do as a nation, thus compromising our goals even before we set out to pursue them.

I believe that there is much that we can achieve given a cohesive and all-of-nation approach to solving our basic problems. Take the field of agriculture, for example. A report from Statista shows that the contribution of agriculture to gross domestic product (GDP) has dropped from around 14% at the start of the 2010’s to a low of 8.8% in 2019, rising slightly to 10.2% in 2020. Interestingly, industry has also dropped from 32% in 2010 to 28% in 2020. Services, on the other hand, has grown from 54% to 61% from 2010 to 2020.

There is something to be said about the sectoral contributions to GDP. I would argue that both agriculture and industry have a much more significant value-add to the economy than the services sector. A telling sign that agriculture is continuing to be marginalized is that no major business enterprise has lent their prowess to the sector. Why is that? To be sure, land banking has been a constant and rising interest of the private sector but more for residential or commercial ventures and not for agriculture. 

I think that the hesitancy to get behind agri-preneurship has to do with a Presidential Decree that limits ownership of agricultural lands to 5 hectares. Ostensibly, this has to do with socializing land ownership. In the real world, though, this undermines economies of scale and the efficient use of farm resources. 

Economists might argue that it might be cheaper to import food than produce it locally. I see the merit of this argument but I think government must be competitive and forward looking in securing supplies in the open market. If not, food security will forever haunt our country of 110 million Filipinos. It might probably make sense to have a good balance of local production – maybe of staples – and imports to assure resiliency in our supply chain.

I would extend the same view to the industry sector. Compared to the service sector, investments in manufacturing are more long term. The jobs that the sector creates and the value-add they provide to the economy are also more significant. As importantly, the degree of technology transfer keeps the country at pace with other countries in terms of innovation. 

I believe that it is imperative for government to have a blueprint that will  assure our place in the supply chain of globally traded products. Admittedly, it will be difficult for us to compete in the manufacture of leading edge products and components. Given our development stage, however, this may not be a bad thing.

We have the chance to grow our way out of the prevailing economic challenges. The SONA will hopefully show the way to better days ahead.

For comments: vincesocco101@gmail.com

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