Salceda: Stronger agriculture is key to economic growth in PH
Albay representative Joey Sarte Salceda said investment and growth in agriculture will be key to ensuring the country maintains its high levels of economic growth this year, even though the International Monetary Fund (IMF) has forecast an “economic turbulence” among emerging economies like the Philippines, caused by shifts in US monetary policy and the COVID-19 Omicron surge.
In an article titled “Emerging Economies Must Prepare for Fed Tightening,” IMF economists Stephan Danninger, Kenneth Kang and Helene Poirson said policymakers may need to respond by pulling several policy levers depending on the actions of the Fed. the US Fed, as well as challenges in their respective countries.
“While the global recovery is expected to continue this year and next, risks to growth remain elevated due to the stubborn resurgence of the pandemic. Given the risk of this coinciding with more rapid Fed tightening, emerging economies should prepare for possible periods of economic turbulence,” the IMF warned.
Reacting to IMF forecasts, Salceda, who chairs the House Ways and Means Committee, said the Philippines should invest more in agriculture as the strength of the sector will determine overall inflation and wage pressures.
“We have several defenses against a bad tide. We can keep our monetary policy loose with low interest rates. We can continue our massive investments in infrastructure and other public spending programs. We can continue to encourage investment in the Philippines. But it all has something to do with agriculture, especially food prices,” Salceda said.
“If prices are high, real economic growth will slow. If food prices are high, the pressure to increase wages will also be greater, which will result in a less competitive labor market for investors. Agricultural production will be really important.
“If food prices are good this year, we can also keep our interest rates low, as there will be much less pressure to contain inflation,” he added.
Salceda pointed out that “agriculture is a sector where there is a lot of underinvestment. We are starting from a very low base, as we lag behind most of our neighbors in almost every major crop. There are also investment gaps in mechanization, market development, post-harvest facilities and storage that we can pump money into.
He said that the acceleration of the deployment of the Rice Competitiveness Enhancement Fund (RCEF), the improvement of biosecurity in agricultural imports, the implementation of the financial assistance program for rice farmers and the launch of organic fertilizer subsidy program are some of the major agenda items that the House will work on immediately once. the legislative session resumes this week.
The lawmaker said policy reforms to modernize farming and fishing, promote sustainable forestry and reduce fertilizer and feed costs are also key areas for reforms he hopes to work on over the course of the year. of the last months of the Duterte administration.
Salceda said he would also push for the inclusion of these areas in the Strategic Investment Priorities Plan (SIPP), which would allow them to benefit from tax incentives under the Business Recovery Law. and Tax Incentives for Business or CREATE, of which he is the lead author.
“Every breakthrough in human civilization has been marked by sweeping advancements in agriculture. If the Philippine economy strives to achieve developed status, we will need dramatic advancements in our agricultural sector,” Salceda remarked. .