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Agricultural output may have contracted in Q3

A farmer dries rice grains in Baliuag, Bulacan, Oct. 9, 2023. — PHILIPPINE STAR/KRIZ JOHN ROSALES

THE PHILIPPINES’ overall agricultural output likely shrank in the third quarter as bad weather affected crop production and farmers grappled with rising costs, analysts said.

“The third-quarter agricultural performance could be a contraction close to 1% to 2%,” Roy S. Kempis, retired Pampanga State Agricultural University professor, said in a Viber message.

If realized, this would be a reversal of the 1.8% increase in the value of production in agriculture and fisheries at constant 2018 prices in the third quarter of 2022.

This would also mark the second straight quarter of contraction, after agricultural production fell by 1.3% in the second quarter this year.

For the first half, the value of production in agriculture and fisheries inched up by 0.4%. The Department of Agriculture (DA) set a 2.3%-2.5% agricultural output growth target for this year.

The Philippine Statistics Authority (PSA) is set to release third-quarter data on farm output on Nov. 8. The agriculture sector contributes about a 10th of the country’s gross domestic product (GDP) and provides around a quarter of all jobs.

Mr. Kempis said heavy rains in the third quarter caused widespread flooding, which damaged crops and aquaculture assets in several provinces.

“Lower productive efficiency of livestock and poultry (during this period) is also attributed to weather disturbances during the months of July to September,” he added.

The southwest monsoon along with typhoons Egay (international name: Doksuri) and Falcon (international name: Khanun) caused around P12 billion in agricultural damage and losses, the DA said in a Sept. 15 report.

Affected regions with major agricultural losses were Cordillera Administrative Region, Ilocos, Cagayan Valley, Central Luzon, Calabarzon, Mimaropa, Western Visayas, Zamboanga Peninsula, Soccsksargen, and Caraga.

The volume of lost production was estimated at 279,289 metric tons (MT) with 250,174 hectares of farmland affected by the heavy rains. Rice production losses were estimated at P3 billion.

Mr. Kempis said farmers were also affected by higher prices of raw materials and rising production costs, as well as elevated interest rates.

“There may be slight production increases in crops, livestock and poultry, given the relatively favorable weather conditions in other parts of the country. However, these may not be able to outweigh the challenges in the fisheries sector. Decline in fisheries seems expected,” he said.

Production in the fisheries sector contracted by 14.2% in the second quarter of 2023, and by 4.2% in the third quarter of 2022.

Former Agriculture Secretary William D. Dar said in a Viber message that the crop and poultry sectors may have driven agricultural production expansion in the third quarter.

“Drivers for growth will be crops and poultry while livestock and fisheries will have negative growth,” Mr. Dar added.

Elias Jose M. Inciong, president of the United Broiler Raisers Association said he expects the poultry sector to have grown between 4% and 7% in third quarter.

“It could be more, were it not for poor demand and disruptions from imports,” Mr. Inciong said in a Viber message.

Meanwhile, Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said palay production likely had a marginal rise for the third quarter due to lower costs of rice seeds. He noted the price of rice seeds dropped between P1 and P2 per kilogram.

“There is a slight increase in rice (production), compared to last year because the cost of inputs decreased and (due to) larger government subsidies. But this will be offset again if the (continued) tariff reduction in rice is approved,” he said in a Viber message.

Economic managers urged President Ferdinand R. Marcos, Jr. to extend the lower tariff rates on rice, corn, and pork, which is set to expire on Dec. 31. — Adrian H. Halili

Neil Banzuelo

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