Food security thru agro-industrial investments
Official numbers released by various economic agencies have validated the sentiments of Filipinos about food being a primary concern—literally, a gut issue.
For example, we learned that overall inflation again increased in August, after being told a few months ago that prices had been stabilizing. Inflation rose to 5.3 percent in August 2023, from 4.7 percent in July. The uptick was due to higher increase in the price of food and nonalcoholic beverages, according to the Philippine Statistics Authority.
Complementing these are the findings of two survey firms. According to the Social Weather Stations (SWS), 10.4 percent of Filipino families experienced involuntary hunger at least once in the past three months during the second quarter of this year. Involuntary hunger is defined as being hungry and not having anything to eat. Related to this is another SWS finding for the same quarter, that 34 percent of Filipino families—estimated at 9.2 million families—feel “food poor.” Some 38 percent feel they are on the borderline (between being food poor and not).
Pulse Asia also conducted a survey in September this year which quoted 74 percent of respondents nationwide as saying that controlling inflation is their worry. The sentiment, which showed an increase of 11 percentage points from the previous quarter, was observed in every geographical area and socioeconomic class.
Other urgent national concerns unearthed by the Pulse Asia survey are: increasing the pay of workers (49 percent); creating more jobs (27 percent); reducing poverty (25 percent); fighting graft and corruption in government (22 percent); addressing the problem of involuntary hunger (14 percent); and providing assistance to farmers (13 percent).
It is clear that people are worried about not being able to afford food to sustain them and their families, notwithstanding the pronouncements and initiatives of our government leaders.
Our economic profile provides a basis for some introspection. For the second quarter of 2023, gross domestic product rose by 4.3 percent, a slower pace that brings the average for the first half of the year at 5.3 percent. All sectors grew, albeit at different paces: agriculture, forestry, and fishing rose by 0.2 percent, industry by 2.1 percent, and services by 6 percent.
The services sector has, for many years, driven the growth of the economy but has also exposed its weaknesses in the event of disruptions. This was very clearly demonstrated three years ago at the height of COVID-19-driven lockdowns. As people were forced to stay indoors for fear of contracting the virus or violating mobility restrictions, the economy ground to a halt. The services sector was unable to contribute its share during this period, resulting in economic contraction of as much as 16.5 percent in the second quarter and 9.6 percent for the full year 2020. Personal consumption, which drove the economy from the demand side, likewise took a beating.
These numbers were the worst for the Philippines since World War II.
This pandemic experience gives us a peek into possibilities. What could happen if the economy were less dependent on services and more on agriculture, forestry, and fishing, as well as industry? And what if our growth were fueled by something aside from personal consumption, which also makes the economy susceptible to external developments and other disruptions that are out of our control?
Another component for growth is investments, with long-term and multiplier effects like increased productivity, higher consumption, more jobs and livelihood opportunities, a stronger, more vibrant economy—and, yes, food security for the people.
This is our basis for promoting investments in the manufacturing sector, specifically for the domestic market, in the agro-industrial sphere. This initiative will contribute to increasing the country’s productivity and provide the growing domestic market with more affordable goods and essential commodities like food. This also strengthens our position in the global supply chain. We have seen the negative effects of heavily relying on a single country for manufacturing activities.
Stratbase ADR Institute will have a business roundtable discussion called “Cultivating Investments in the Philippine Agro-Industrial Manufacturing for Food Security” on Oct. 16 at the Pin Wei Room, Seda Vertis North, Quezon City, to expound on this. I look forward to hearing how stakeholders can work together toward investment-led growth, cultivate an environment that is conducive for the economy to grow sustainably, and ensure that no Filipino ever goes food-poor.
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Dindo Manhit is founder and CEO of the Stratbase Group.
