A recent report by Moody’s Investors Service recently put the Philippines as among the countries in the Asia Pacific that is highly vulnerable to food and energy prices as Russia’s war in Ukraine continues to disrupt the supply and raise the cost of agricultural products as well as fertilizers and other inputs.
It noted that the Philippines, India, Thailand and Vietnam have high energy and food weights in the consumer price index (CPI) baskets. Our country, in particular has net import dependence on key cereals such as rice and wheat.
Food security has become a major concern for governments in Asia-Pacific as the war in Ukraine disrupts the supply and raises the cost of agricultural products, especially cereals and vegetable oils, as well as fertilizers and other inputs. Aside from the ongoing conflict, developments such as recent heat waves are also expected to affect harvests this year.
The debt watcher said the Philippines is among the countries in the region particularly vulnerable to inflation in basic necessities. “Net food import dependence in key cereals consumed in Asia, such as rice and wheat, is high in the Philippines as indicated by its trade deficits,” it said.
Latest data from the Philippine Statistics Authority showed that the country’s trade deficit hit an all-time high of $5.67 billion as imports continues to outpace the growth of exports amid the continued reopening of the economy from strict COVID quarantine and lockdown protocols.
Moody’s said there is room to expand regional cooperation and promote efficiency in food production and trade. “Agricultural productivity in South Asia and Southeast Asia lags that of East Asia. Investments in agriculture supply chains and improving crop yields will be credit positive in the long run. Greater international cooperation to expand existing programs will also be positive for the region,” it added.
As the global situation remains uncertain, Filipinos will have to depend on ourselves and our regional neighbors to minimize the impact of a drawn out war in Ukraine and even global warming. The challenge for our Department of Agriculture, which is currently headed by President Ferdinand Marcos Jr., would be to make us less dependent on imports that make us vulnerable to external factors we cannot control. Hopefully the new government is up to the challenges and has prepared solutions for the potential threats that come with the testy global situation these days.*
