PH agriculture seen as loser in Asean bloc

The Philippine agriculture sector may end up as one of the “losers” in the forthcoming economic integration of the 10 member states of the Association of Southeast Asian Nations (Asean), unless the government is able to provide the necessary infrastructure to pump up the sector.

Speaking at the ING Bank-Economic Journalist Association of the Philippines CFO forum on Wednesday, Ysmael Baysa, chief financial officer of Jollibee Foods Corp. noted that there will be winners and losers upon the establishment of the Asean Economic Community, which means that there are industries that may significantly benefit, while others may suffer from these developments.

“Who are going to be the losers? It’s probably our agriculture sector if cheaper rice and sugar from Vietnam and Indonesia, for example, come to the Philippines, and [thus] farmers of those crops will suffer,” Baysa said.

Although 99.6 percent of the goods are already being traded at zero tariff in the Asean, certain sectors remained protected such as rice and sugar, in the case of the Philippine agriculture. Tariff on imported rice will be slashed to 35 percent after 2015 from the current duty of 40 percent, while that for sugar will be reduced to 5 percent from 10 percent.

Baysa stressed that the government must “address seriously” such sectors that are potentially threatened by ensuring adequate infrastructure, which does not only include roads and ports, but also the rice mills, storage facilities, and electricity, among others.

Bach Johann Sebastian, senior vice president of JG Summit Holdings Inc., meanwhile, noted that tariff is no longer the issue, but rather the degree of infrastructure development, as this will spell who the losers and the winners will be under the Asean Economic Community.

“Many would say the Philippines is an agricultural economy, but we were never an agriculture economy. We have the smallest arable land per capita in the Asean. We are a service economy, and tourism is also another big potential winner. But these winning sectors will need infrastructure,” Sebastian said.

The winners, meanwhile, according to Baysa, would be the services sector given the availability of a highly skilled workforce.

One specific group that could win would comprise of managers and middle managers, accountants, engineers, financial analysts and teachers.