… with Philippine agriculture in disarray, the UMIC goal is meaningless.
The Philippines should abandon for the moment its dream of achieving an upper middle-income status (UMIC) if it cannot fix the problems of the agriculture sector.
The Philippines by various estimates is poised to reach the status either this year or in 2026 if the growth trajectory holds up. It will join other upper middle-income economies in Asia, like China, Malaysia Thailand and Türkiye.
The World Bank defines UMIC economies as those with a gross national income per capita ranging between $4,516 and $14,005 for the fiscal year 2025. GNI per capita measures the economic output per citizen, encompassing both domestic and international earnings. A higher GNI per capita is one indication of greater economic prosperity and a higher standard of living.
The Philippines is sure close to reaching the magic number to become a UMIC economy. Its GNI per capita rose to a historical high of $4,230 in 2023, up 7.1 percent from the preceding year and surpassed the 2023 target range of $4,130 to $4,203 GNI per capita set in the Philippine Development Plan for 2023-2028.
But with Philippine agriculture in disarray, the UMIC goal is meaningless. The poor performance of the agriculture sector in 2024 means the economic growth is not inclusive—farmers and fishermen cannot experience the prosperity being enjoyed by other Filipinos.
The Philippines’ gross domestic product (GDP) grew 5.6 percent in 2024 despite a sluggish fourth-quarter expansion of 5.2 percent. Agriculture, however, remains a laggard. The output of the agriculture, forestry, and fishing (AFF) sector declined 1.8 percent in the fourth quarter and by 1.6 percent for the whole of 2024.
Way back in 2021 or months before the 2022 presidential elections, this column reminded the candidates then that the economy should be at the heart of every political discourse. Millions of Filipinos were looking at the presidential elections as the time for change, and rest their hopes on the country’s new leaders.
In particular, the new president has the task of improving the lot of farmers and fisherfolk, who comprise the majority of the population in the countryside.
Millions of Filipinos in the countryside still rely on agriculture as their main source of livelihood. They live and die by their crops from the farm and catch from the sea. Many of them live on a hand-to-mouth existence and are unable to break the poverty cycle.
President Ferdinand Marcos Jr. briefly took over the helm of the Department of Agriculture to resuscitate the ailing sector. But nearly three years after the elections, the agriculture sector is still mired in a prolonged recession of its own.
And things have taken a turn for the worse. Agriculture Secretary Francisco P. Tiu Laurel Jr. just this week declared a food security emergency on rice.
The agriculture chief cited an “extraordinary” rise in local rice prices. Soaring rice prices despite lower global prices and reduced rice tariffs prompted the emergency declaration.
“This emergency declaration allows us to release rice buffer stocks held by the National Food Authority (NFA) to stabilize prices and ensure that rice, a staple for millions of Filipinos, remains accessible to consumers,” says Tiu Laurel.
His decision follows the assessment of the National Price Coordinating Council (NPCC) that despite declining global rice prices and import rice tariff reduction from 35 percent to 15 percent in July, the local costs have remained stubbornly high.
Rice inflation, per data from Philippine Statistics Authority (PSA), soared to as high as 19.6 percent in December 2023.
The food security emergency, which will will remain in effect until the situation improves, is ironic for a country that is aspiring to achieve an upper middle-income status.
Addressing other pressing economic issues—unemployment, poverty, low rural income, climate change and high prices—remain a challenge. The job of improving the lot of farmers and fisherfolk, who comprise the majority of the population in the countryside, is equally daunting.
E-mail: rayenano@yahoo.com or extrastory2000@gmail.com