Management consultant Oxford economics estimates the Philippines’ agri-food sector is around P6.1 trillion, contributing almost a third of total GDP in 2019.
The consultant in a report “The Economic Impact of the Agri-Food Sector in Southeast Asia,” said the sector “is a significant driver of the country’s post-COVID-19 economic recovery,” warning however that “supply and demand risks, fiscal measures, and a drawn-out pandemic” could disrupt the recovery.
Commissioned by Food Industry Asia (FIA) to better understand the challenges and economic impact of the agri-food sector faced in 2020, the report highlighted the industry has a pivotal role in the Philippines’ economic recovery, i creating employment, and putting food on the table at stable prices.
FIA is an association of leading food and beverage companies, based in Singapore.
Findings from the report show the agri-food sector’s P6.1 trillion value is a 16 percent increase from 2015.
“The sector is also responsible for 42.7 percent of the entire workforce with 18 million jobs, making it the single most critical source of employment in the economy,” it said.
“The sector also contributed a total of P829.5 billion in tax revenues,” Oxford Economics said.
It added a key driver for the Philippines’ agri-food sector is food and beverage manufacturing, which in contrast to many other Southeast Asian economies, “outweighs the size of agricultural production by making up almost half (46 percent) of the total agri-food sector’s contribution to GDP in the Philippines.”
The report also revealed the sector was impacted by the disruptions coming from the COVID-19 pandemic, seeing a 4 percent contraction in 2020, or a P262.1 billion drop in GDP contribution.
“However, the scale of this impact was considerably smaller than what the economy endured as a whole, highlighting the essential nature of agri-food production and distribution,” Oxford Economics said.
“As the Philippines looks to emerge from the pandemic stronger, it is important that policymakers provide the most conducive conditions for the agri-food industry to successfully rebuild itself, and that any fiscal policy implemented is carefully planned, designed, and communicated. That will allow the industry to continue to provide the economic benefits it has delivered over recent decades,” said James Lambert, Oxford Economics director of economic consulting Asia.
Lambert noted “fiscal adjustments can include reducing public expenditure or raising tax revenues, which can pose a risk to the recovery of the Philippines’ agri-food sector, and subsequently the wider national economy.”
