By Danilo P. Padua, PhD
In today’s column, we give way to a column by an eminent Filipino economist, Mr. Rolando T. Dy, whose column regularly appears in the Philippine Daily Inquirer. This column also appeared in the latest newsletter of Inang Lupa Movement headed by the former DA secretary, Dr. William D. Dar. The column contained at least 8 tables which are not appearing here. I therefore made little modification related to the said tables.
One will note that the Philippines is the worst performer among 5 ASEAN countries in practically all parameters considered. Here goes:
How does the Philippines compare with its ASEAN peers?
On Oct. 4. 2017, I spoke at the Association of Southeast Nations (Asean) Agriculture Summit upon the invitation of ASEAN Business Advisory Council chair, Joey Concepcion.
My objective was to compare the performance of Asean countries in agriculture and trade.
Five large ASEAN nations were selected: Philippines, Indonesia, Malaysia, Thailand and Vietnam. The main sources of data were the Food and Agriculture Organization (FAO), United Nations (UN), and United States Department of Agriculture (USDA) Economic Research Service.
Collation and analyses of basic data were undertaken at the Center for Food and Agri Business of the University of Asia and the Pacific (UA&P).
The analysis focuses on six metrics: (a) national and rural poverty, (b) total factor productivity, (c) land productivity, (d) land productivity growth, (e) crop diversification and (f) trade.
National and rural poverty
The Philippines’ national Poverty Incidence (PI) of 21.6 percent (%) is double that of the Asean-4 weighted average. This is the case, too, for the rural PI of 30%.
Rural poverty is a key development metric as some three quarters of the poor reside in the rural sector. Agriculture and fishery are the main occupations in that sector. ‘Agri-manufacturing,’ a main job source in other countries, is underdeveloped principally due to a lethargic agriculture sector.
Total factor productivity (TFP) is the most informative measure of long-term agricultural productivity. TFP covers land, labor, capital, and material resources used in production and compared to total crop and livestock output (USDA).
The Philippines lags behind its ASEAN peers in TFP. Malaysia and Vietnam posted consistent growth for the past 30 years.
Land productivity
During 2012- 2014, Indonesia, Malaysia and Vietnam led in absolute productivity levels. The Philippines failed to keep pace. It has the lowest average yield/ha in banana, coconut, cassava, green coffee, corn, rubber, sugar cane and has also one of the lowest average yield in rice. The country ranks high only in pineapple productivity but is second to Indonesia.
Land productivity growth. Between 1986 and 2014, Vietnam and Malaysia were ahead in productivity gains, followed by Indonesia and Thailand. The Philippines was at the tail-end.
Crop diversification
Indonesia’s agriculture is highly diversified. Among 15 crops, the top three crops accounted for 67 percent of total area as compared to 86 percent for the Philippines.
In Thailand, while rice is dominant, the rest of the crops is well diversified and highly export oriented. Thailand is the world’s no. 1 in rubber, cassava starch, and canned pineapple; No. 2 in rice and sugar exports; and ranks high in diversified tropical fruits.
In Vietnam, nine crops cover over 200,000 hectares each. Five of these are heavily exportoriented: rice, rubber, coffee, cassava, and cashew. By contrast, there were seven crops for the Philippines, of which only three were export-oriented: coconut, banana, and rubber. The Philippines’ rubber exports are miniscule compared to Vietnam’s.
Malaysia undertook a different strategy. It has focused on oil palm development after a shift from rubber which is highly labor -intensive. World-class plantation management and genetics research led to high productivity.
Trade performance
Low productivity and the extent of product diversification impacted on trade performance. Of the five ASEAN countries, the Philippines underperformed in exports. It is also the only country with a negative trade balance.
Export scorecard
For export crops worth at least 1 billion dollars, the Philippines had only two: coconut and cavendish banana. On the other hand, Thailand had 13, Indonesia, 7 and Vietnam, 5 excelling thus in global exports. For export crops worth more than $500M, the Philippines has none while Indonesia and Malaysia has 5 each, Thailand has 4, and Vietnam, 2. **
