Without much fanfare, President Ferdinand “Bongbong” Marcos Jr. has taken the step that traders have been waiting for, which is for him to introduce ease of doing business initiatives for agricultural products.
Inflation has been on the upswing recently due to rising food prices, particularly the staple rice.
Administrative Order (AO) 20 signed by Executive Secretary Lucas Bersamin on 18 April directs the Department of Agriculture (DA), Department of Trade and Industry (DTI) and Department of Finance (DoF) to speed up the procedures for the entry of farm imports.
The Palace edict addresses the concern of the World Bank expressed in a recent report that debt, trade barriers and policy uncertainties are dulling the Asia-Pacific region’s economic dynamism.
“Governments need to do more to address long-term problems such as weak social safety nets and underinvestment in education,” the report said.
Nonetheless, the mandate requires transparency and predictability of policies on importing agricultural products.
Streamlining the licensing of importers, cutting down processing time for applications, and exempting licensed traders from the submission of registration requirements are among the measures that the AO requires.
It also orders the importation of certain agricultural products beyond the limits under the minimum access volume (MAV) for certain commodities to protect local farmers.
Regional growth is projected to ease to 4.5 percent in 2024 from 5.1 percent last year in the Asia-Pacific, according to the World Bank’s East Asia and Pacific April 2024 Economic Update.
The Philippines is expected to pace the growth momentum with at least a 5-percent growth which is among the fastest in the region.
The country, however, is considered to be performing below its potential due to the slew of non-tariff barriers, including impediments to competition, uneven worker skills, and weak management.
The trade hurdles also contribute to lagging productivity growth. Opening goods and services to greater competition and enhancing human capital — through investments in teachers and tertiary education — can help increase productivity.
World Bank East Asia and Pacific chief economist Aaditya Mattoo said, “Bold policy action to unleash competition, improve infrastructure, and reform education” can revitalize the region’s economy.
The goal of the Palace order is to keep prices down, which has been the scourge of the nation, particularly the poor after the pandemic.
The challenge is to make local firms competitive which can only happen if investments flow freely by removing red tape and other impediments.
Making domestic producers competitive, particularly in the farm sector, is key to ensuring low prices.
Facing competition from imports is imminent with the free trade deals with other nations and regions.
The country is also part of the Association of Southeast Asian Nations Economic Community which seeks to remove all tariff walls in the region.
The DA is crucial to streamlining the procedures and requirements for the issuance of clearances, and in improving logistics, transport, distribution and storage of imported agricultural products.
The Bureau of Customs is directed to prioritize the unloading and release of imported agricultural products, subject to the Customs Modernization and Tariff Act, and other laws.
Inflation is the biggest threat to a growing economy because of the increase in business activities that should be matched by the availability of products to keep prices low. Importation is a temporary solution that has been found effective until domestic production picks up.
Unleashing the strength of local businesses will be helped along by removing the unnecessary hurdles that are caused mostly by the pile-up of requirements and papers.
AO 20 is expected to prompt efficiency in government in dealing with imports as a result of a more open market starting with the crucial farm goods.
The DA has a complementary program to strengthen the sector that will make the agricultural industry resilient and competitive.
The AO is an acknowledgment that government needs to coax competitiveness among local industries.
