Development of Agribusiness Enterprises - Asian Productivity ...

Seventh was seaweed and carrageenan, which contributed US$85.59 million. The
major markets were Denmark (15 percent), the United Kingdom (14 percent), the United
States (13 percent), France (13 percent), and China (4 percent).
Sugar exports, which ranked after carrageenan at US$62.62 million, were all to the
United States. Fertilizer was exported mainly to Vietnam (59 percent) and Indonesia (36
percent).
Fresh mangoes took tenth place, replacing abaca, amounting to US$32.34 million,
FOB. The top markets for mangoes were Hong Kong (59 percent) and Japan (39 percent).
2. Imports
In 1999, the top 10 Philippine agriculture imports (value in FOB price) were: (a) wheat
and meslin, US$351.53 million; (b) milk and cream products, US$ 261.04 million; (c) rice,
US$218.49 million; (d) soybean oil cake, US$114.88 million; (e) soybean, US$103.78
million; (f) raw tobacco, US$103.27 million; (g) urea, US$75.72 million; (h) meat of bovine
animals, US$71.61 million; (i) cotton, US$69.09 million; and (j) flour, meal and pellets of
fish, meat and crustaceans, US$37.59 million. A huge rise of 87.6 percent in rice imports
was registered from 1995 to 1999, while soybean imports grew by 37.5 percent in the same
period (Table 4).
In 1999, the overall value of agricultural imports by the Philippines amounted to
US$1.4 billion while exports totaled US$1.29 billion. The Philippines remains a net importer
of agricultural products despite its conducive environment for agriculture. This is attributed
to the shift in the pattern of economic activities from agriculture to industry as well as the fast
growth of residential development, which consumed a large area of prime agricultural land.
Investment in Agribusiness Enterprises
Based on Board of Investment (BOI) figures, between 1997 and 1999, the highest total
investment reached P=587 billion in 1997, while the lowest was P=116.5 billion in 1999,
attributed mainly to the Asian economic crisis. The cumulative value of total investments
approved by BOI from 1997 to 1999 was P=961.24 billion. The agribusiness subsector
contributed P=13.4 billion or 11.4 percent. The highest agribusiness investment of P=9.56
billion was recorded in 1997.
Investment Priority Plan
Included in the Investment Priority Plan (IPP) for 2000 (which basically contained the
list of preferred areas for investment) were agribusiness projects that were export-oriented,
in support of Department of Agriculture programs or the Agriculture and Fishery
Modernization Act (AFMA), as well as the mandatory list under the High-Value Crops
Program (RA 7900), and Commercial Fishing Programs under RA 8550.
A new addition in IPP 2000 was the granting of incentives to registered industry
clusters. A cluster is defined as a grouping of companies, together with their ancillary and
supporting firms, within an industry in a particular area. Basically, it comprises agribusinessstructured
operations wherein all key players are linked vertically and horizontally,
supporting and supplying each other’s needs.
CHALLENGES AND OPPORTUNITIES IN PHILIPPINE AGRIBUSINESS
Productivity Improvement
The low productivity of agricultural production is attributed to small and dispersed
farm landholdings, which hampers operations of economies of scale. Industry clustering and
a cooperative system are proposed for efficient and effective operations.
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