DBM initiates study on why agri sector lags

The Department of Budget and Management (DBM) has initiated a study to determine the factors behind the agriculture sector’s laggard performance.

Budget Secretary Benjamin Diokno said Wednesday the DBM is finalizing a “statistical analysis” to find out the reasons behind the slow growth in the sector.

If farm output grew by 4 percent in 2018, the country’s gross domestic product could have hit the government’s target of 7 to 8 percent, the Cabinet official noted.

The Philippine economy grew by 6.1 percent in the last quarter of 2018, bringing the full-year growth to 6.2 percent.

For the entire 2018, agriculture output grew by 0.56 percent—compared with 4 percent in 2017.

“We need the evidence. So we need all the facts so we can come up with a more solid conclusion and strategy moving forward, because the President is really concerned that agriculture sector is dragging the whole economy,” Diokno said in a forum in Manila.

“Before the Cabinet meeting I will be ready with that study,” he said.

The Cabinet meeting is scheduled next Wednesday, February 6.

The study also aims to dispel perceptions that the culprit behind the laggard farm growth is lower budget allocation to the Department of Agriculture.

The Budget chief said the study was solely initiated by the DBM.

During the briefing, Diokno presented historical data on agriculture spending to show that it is not the main factor to show productivity performance of the sector.

“One striking example of this is the spike in productivity from -6.97 percent in 1998 to 9.65 percent in 1999, despite a mere 0.17 percent increase in agricultural spending. This happened within former President Joseph Estrada’s first full year in office,” he said.

“The opposite is observed from the years 2007 to 2010. In this time period, sharp dips in productivity were recorded from year to year, despite registering a stable share in the budget at around 3.5 percent,” he added.

The DA’s budget has been declining in recent years due to tis spending performance in prior years, Diokno noted.

“In 2017 and 2018, the Department of Agriculture posted disbursement rates of 55.1 percent and 66.2 percent, respectively,” he said. —VDS, GMA News