Agri groups urge gov’t to reduce reliance on imports amid weak peso

Agriculture stakeholders are calling on the government to reduce dependence on imported agricultural goods as the Philippine peso continues to weaken against the US dollar, making commodities bought abroad more expensive.

In a statement, the Philippine Rural Reconstruction Movement (PRRM), United Broiler Raisers Association (UBRA), and Tugon Kabuhayan said that “a weak peso is disadvantageous for imports, especially as the Philippines still heavily relies on commodities sourced from other countries, from oil to inputs to finished agricultural goods.”

The peso had recently hit its all-time low against the US dollar amid a strong greenback due to hawkish remarks from the Federal Reserve.

Such a scenario means higher prices for imported goods, particularly agricultural commodities that are also reeling from other factors, the groups said.

PRRM president Edicio dela Torre said global prices of fertilizer have shot up due to the war in Ukraine and “a weak peso would only make it all the more expensive.”

“With current projections that the weakening of the peso will continue into early next year, industries, especially those that rely on imported components, are exposed to more risks. But even consumers face risks, not just from higher prices but from weaker purchasing power,” dela Torre said.

For UBRA chairman Gregorio San Diego, the weak peso will hit imported raw materials for feeds like soybean meal, making production cost more expensive, thereby adding to their losses amid competition with imported chickens.

San Diego said raisers are now selling broilers at a loss.

“There’s very little we can do to increase our volume of sales because there are a lot of imported chickens, which are responsible for our very low farmgate price. The government should drastically reduce chicken importation,” he said.

Tugon Kabuhayan convenor and former Bureau of Fisheries and Aquatic Resources director Asis Perez echoed concerns about the impact of a weak peso.

Perez said that any production, whether rice, meat, fish, or vegetables, is dependent on fuel to run farm machines and imported inputs such as fertilizers, soya, and corn.

Given the rising prices of imports, dela Torre said that the situation is favorable to ramping up local production now through support and incentives, as well as financing of key components of the food value chain.

Perez said that local producers should be supported by not giving the public an impression that a slight increase in prices is bad.

“And that the same can be corrected by importing more to lower prices, especially for food. This is the natural course of things. We need to support our producers so they continue to produce at an increased volume,” he said.

“If we do that, then prices will go down because the more we produce, the more we become better at production, the more efficient we become,” Perez added. 

Dela Torre said that in the short-term, as a way to address inflation, importing basic commodities cannot be avoided, but argued that there is a need to get the best available data and projections to agree on the volume and consider the timing to avoid hurting local producers.

“If we agree to be guided by the policy direction of developing a competitive and integrated food system, we should support the importation of those components that will strengthen our internal capabilities rather than using imports mainly as a stop-gap measure,” dela Torre said.

The PRRM president said that the country should import the inputs that are needed and are not produced adequately by local makers.  

Perez agreed, saying that the Philippines needs some important materials for the production of final products. 

“Examples of these are feed ingredients, equipment needed for production, among others. We can also import products for canning and processing for re-export and local consumption, as in the case of fish for canning and processing purposes,” he said. — VBL, GMA News