BIZ_DTI Table
The Department of Trade and Industry (DTI) must support agriculture as much as industry. Our agriculture is at risk of being destroyed by lower tariffs for other countries compared to ours, particularly in our major markets. We see this clearly in the case of our banana exports.
The Alyansa Agrikultura has long been recommending that we appoint a special trade representative (STR) who does not report either to the DTI or the Department of Agriculture (DA). This will ensure that agriculture will get as much attention as industry.
READ: Sagging PH banana industry gets boost from FTA with South Korea
International trade is so important that it needs full-time effort from an STR, who should report directly to the President. There is an STR structure currently being used in the United States and we can see its obvious benefits.
In the Philippines, international trade is headed by the trade secretary. We saw instances in the past when industry was favored over agriculture in international trade negotiations. Hopefully, this is no longer happening today.
Exports
The case of our banana exports needs the focused attention and full support of the DTI chief.
In a report from the University of the Philippines Los Baños, it stated: “Banana production is a source of income and employment to 5.6 million farmers and is one of the country’s top export earners.” Unfortunately, a report from Statista reveals that our banana exports of P101.2 billion in 2019 was cut in half to only P56.1 billion in 2021.
This meant a significant loss of jobs and increased poverty for our banana farmers. This decline continued until last year, when Produce Report stated: “The Philippines overcame its three-year decline in banana exports in 2023, reporting a 3.4-percent year-on-year increase.”
Unfortunately, the joy from this small victory was short-lived.
Last Nov. 8, Paul Cuyegkeng, former president of Dole Asia and now chair and part-owner of Sumufru Philippines Corp., participated in a meeting of the committee on international trade of the public-private Philippine Council of Agriculture and Fisheries.
He said: “We are now experiencing another banana export downturn. Largely because of Vietnam’s banana tariffs in Japan which are much lower than ours, their exports this year have doubled, while ours have significantly decreased.”
Do check the table of comparative banana tariffs in Japan for the Philippines compared to Vietnam and other emerging competitors like Cambodia and Laos.
It is only a matter of time before we see our banana industry decimated, unless we act swiftly to decrease our tariffs to achieve a level playing field.
We congratulate and thank the DTI for leading the gradual reduction of tariffs for our bananas entering South Korea. Our tariffs there are still much higher than Vietnam and other countries. But at least, we see a reduction forthcoming in the next few years. In Japan, there is none at all.
Most important market
We must note that Japan is the largest and most important market for Philippine bananas. In an earlier press release, the DA stated: “During his visit in Japan in December 2023, Agriculture Secretary Francisco Tiu Laurel Jr. met with Japanese officials and businessmen to open more export opportunities. The DA is coordinating with the DTI to secure preferential tariff rates for Philippine bananas.” It added, “Philippine bananas are staples for Japanese consumers, accounting for 22 percent of their food basket.”
So far, there has been no improvement in this area. It is now up to the Trade chief to help boost agriculture.
Cuyegkeng continues: “At least for South Korea, we can still get investments because there is some tariff reduction. We will not get any investments for Japan because there is no reduction at all. Our high 13-percent tariff will remain, while countries like Vietnam, Cambodia and Laos will have zero percent, either now or by 2028. Who wants to invest in an enterprise when the prospect is bleak?”
The DA must also work very closely with the DTI so that agriculture issues are given as much attention as industry. Other sectors are also suffering from the same fate as our bananas.
Without the necessary focus and attention, our agriculture will continue its precipitous decline in a challenging and potentially dangerous global environment.