Mayor Antonio Bendita; Magsaysay, Misamis Oriental Mayor Rey Buhisan; ADB Executive Director Paul Dominguez; Monetary Board Member Bruce Tolentino; stakeholders in the agriculture industry; fellow workers in government, guest speakers, distinguished guests, friends in the media.
Thank you for making time to attend this consultation meeting. I know this is a hectic time for Filipinos, with all the holiday obligations we need to fulfill.
Today’s agenda is an urgent one. We know that our agricultural sector has been weak for decades, especially after 1989. This has prevented the entire economy from accelerating to a full gallop. And now is a good time to put our heads together, share our insights, and arrive at policy recommendations we can all support as we move into a new year and a hopeful new beginning for Philippine agriculture.
Sulong Pilipinas, as you are well aware, is a consultative forum that keeps government in close touch with its citizens. This has proven to be a constructive and effective manner to crowdsource solutions to the problems that confront us. The first Sulong Pilipinas consultative workshop was held in this very venue in June 2016 right after the election and prior to the inauguration of President Duterte. The outcome of that meeting helped us implement the zero-to-ten-point socioeconomic agenda that guides this administration.
The top recommendation from the first Sulong workshop was the Comprehensive Tax Reform Program. The first package of that program, the Tax Reform for Acceleration and Inclusion Law, lowered personal income tax rates for 99 percent of wage-earners and raised reliable revenues for the government’s infrastructure modernization and social protection programs. Other Sulong recommendations which have come into fruition include the National ID System Law, Ease of Doing Business Act, Universal Health Care Law, and the Build, Build, Build program.
Since then, we have held several Sulong consultations. Initially, we went through the regions to receive recommendations peculiar to localities of the country. Earlier this month, we held a Sulong forum on the tax reform program at the University of Santo Tomas with students from more than 40 schools and universities from all over the Philippines. Today, we have brought together all the significant voices concerned over how we might rapidly modernize our agriculture sector.
The central, quantifiable target that guides our economic strategy is poverty reduction. The Duterte administration’s ultimate goal is to bring down poverty incidence to just 14 percent by the end of his term in 2022 from 23.3 percent in 2015. That is a tough target because it requires bringing remote communities into the economic mainstream. But that is a crucial measure of how inclusive Philippine development actually is.
I am happy to report that the actionable recommendations from Sulong workshops have started yielding desirable results for our people. Earlier this month, the Philippine Statistics Authority reported that poverty incidence has significantly declined to 16.6 percent in 2018. This means that we have lifted around 5.9 million Filipinos out of poverty in three years, close to our six-million target for 2022. Our unemployment rate is also at its lowest in 40 years.
The investments in infrastructure modernization and in our people through more robust social services, supported by the tax reform program, enabled us to cut deepLY into poverty. We are well on track towards achieving what had seemed to be a very ambitious target. If we continue to work hard and consistently invest in the right things–and with a little luck–we could actually overshoot the target. That will be a very, very good thing for the Filipino people.
The stagnant productivity and anemic performance of our agriculture is a structural source of poverty. For the past ten years, our agriculture sector grew at an average of 1.1 percent. In 2018, despite the higher overall GDP growth of 6.2 percent, agriculture grew at only nine-tenths of 1 percent. If it had grown by 2 percent, overall growth would have been at least one-tenth of 1 percent points higher, at 6.3 percent.
We are, however, encouraged by the findings of the Philippine Statistics Authority that our agriculture grew by 3.1 percent in the third quarter of this year. This is a major turnaround from the 0.03 percent contraction recorded in the same period last year, although we must admit that we were also coming from a rather low base. Maintaining the growth of the agriculture sector by at least 2 percent per year is needed to keep ahead of the country’s annual population growth of around 1.7 percent. This is crucial to achieving stable food prices for all Filipinos.
Clearly, there is much growth potential in our agriculture that requires policy support. Enhancing the growth of this sector is like waking up a sleeping giant that will help us make larger strides in our overall economic growth.
The Duterte administration has demonstrated decisive leadership in passing bold and necessary reforms for the agriculture sector. The Rice Tariffication Law has reduced the price of the staple for over 100 million Filipino consumers and will generate enough funds to boost the productivity of our farmers. After three decades of failed attempts by previous administrations, the enactment of this law has finally broken the stranglehold of inefficiency in the domestic rice industry.
The rollout of productivity-enhancement programs, which are currently being carried out by the Department of Agriculture and its attached agencies, under the leadership of Secretary William Dar, will reduce production cost and increase yield. We need to boost the incomes of our farmers and fishers. For consumers, this means lower prices for core food items, such as rice, vegetables, fish, and meat.
Another bold reform which will benefit the sector is the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA), which aims to gradually reduce corporate income tax from 30 percent to 20 percent. The reduction of the corporate income tax rates will encourage the establishment of more agribusiness enterprises and make the sector more viable for the next generation of agripreneurs.
The experience of serving as Agriculture Secretary, during the administration of President Cory Aquino, helped me understand the need to develop policy reforms in close collaboration with the stakeholders of the agriculture industry, many of whom are gathered in this hall today. You are the ones who truly understand the real problems on the ground. This is consistent with how Sulong Pilipinas places a strong emphasis on collaborative and participatory efforts in crafting public policy, as these workshops over the past three years have demonstrated.
The economic team is earnestly looking forward to the solutions you might arrive at in the course of this meeting. We encourage you to think out of the box and to propose bold ideas. The country benefits from a political leadership that does not fear change. This is the moment to break out from the structures that trapped so many Filipinos in poverty for far too long.
Now is the perfect time to plant the seeds that our children and grandchildren will harvest in the years to come.
Again, thank you for being here. Later in the program, we will be accepting your recommendations on behalf of President Duterte. I wish us all a very productive meeting.
Thank you very much.
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