A Study on the AFF

Sector Investment
Programs and
Employment
GAMIER, Franz Carmel
YUMUL, Danna Jane
TAYLAN, Ma. Glenda
DEIMOY, Shiela Marie

INTRODUCTION

Poverty incidence in the Philippines remains largely

a rural phenomenon and is highest among Filipinos
engaged in agriculture (Rapera et al. 2011).

The agriculture/agribusiness, forestry and

fisheries(AFF) sector provides food and vital raw
materials for the rest of the economy.

Yet it only directly accounts for one-fifth (less

than 20 percent) of the Philippine economys
aggregate domestic output (GDP) (Competitive
and Sustainable Agriculture and Fisheries Sector
2010).

YEAR

NOMINAL WAGE RATE

(In Peso)

1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

35.96
41.72
50.53
57.74
65.16
72.51
80.55
92.27
101.16
112.76
122.17
131.25
129.58
132.17
138.72
143.73
149.88
158.62
165.28
171.79
187.35
193.45
198.37
207.31
221.02

GDP CONTRIBUTION
OF AGRICULTURE
SECTOR
(%)
16.9
16.3
15.8
15.4
15.7
15.7
15.7
15.4
14.8
14.5
14.2
13.3
14.1
14.0
14.0
14.0
14.0
13.6
13.3
13.1
12.9
12.8
12.5
11.6
11.5

STATEMENT OF THE PROBLEM

The

study aims to find out whether

the administrations investment
policies from the period of 19832012 (29 years) address the problem
of agricultural decline and
unemployment (AFF Sector).

OBJECTIVES

To verify the effectiveness of

investment policies in generating
employment by studying the
volumes and values, as well as
policies and programs on investment
in relation with employment rates in
the Agricultural sector.

SIGNIFICANCE OF THE STUDY

The study will be an essential tool and basis for the policy makers
to review old policies and construct new policies on investment
and employment under the Agricultural sector.

For the local and foreign investors, the study will provide a vital
piece of information to aid in directing their investments (AFF
sector) where it would be most profitable, would promote more
employment, and would actually help in kick-starting the
economy simultaneously, helping Filipinos provide for their
families.

And for the academe, the study could serve as a reference

material for future researchers that would like to research on the
same topic or would be willing to conduct a more in depth study
on investment and/or employment or the Agricultural sector.

SCOPE AND LIMITATIONS

The study covers the different investment

policies and programs under each
administration of the period of study.
The data would be limited to the scope of
agriculture, fisheries and forestry of the
Philippines and the study will look into a
29-year timeframe from 1983 to 2012.

REVIEW OF RELATED LITERATURE

FOREIGN LITERATURE AND STUDIES
STUDIES

Implementing agriculture for development: World Bank Group agriculture

action plan

Agriculture and Development : A Brief Review of the Literature

LITERATURE

Labor Market and Wages in Southeast Asia

LOCAL LITERATURE AND STUDIES

STUDIES

The Emerging Philippine Investment Environment. Philippine Institute for

Development Studies

An Overview of Policies and Public Sector Investments in Philippine

Agriculture

LITERATURE

Asian Development Bank. Poverty in the Philippines Causes, Constraints

and Opportunities. Weakness in Employment Generation and Quality of
Jobs Generated

Philippine Agriculture over the Years; Performance, Policies and Pitfalls

SYNTHESIS

THE RESEARCH FRAMEWORK

THEORETICAL FRAMEWORK

Unemployment in the Theory of

Innovations.

- Schumpeter (1934)

Theory on the Existence of a Dual Sector

-W. Arthur Lewis (1950)

THE RESEARCH FRAMEWORK

CONCEPTUAL FRAMEWORK
INPUT
INVESTMENT

PROCESS

OUTPUT

REGRESSIONCORRELATION
ANALYSIS

CONTENT
ANALYSIS

REEVALUATION
AND/OR PROMOTION
OF APPROPRIATE
POLICIES ON
INVESTMENTS FOR
THE AGRICULTURE
SECTOR

EMPLOYMENT RATE
INVESTMENT
POLICIES and
PROGRAMS

METHODOLOGY

It shall use a regressive-correlation

analysis in determining the extent of the
relationships between unemployment and
investment

And, would further establish their

connection and effect on the policies and
programs thorough content analysis on
these values

DISCUSSION OF FINDINGS

ADMINISTRATIONS SUBJECTED TO STUDY

Ferdinand Marcos (1985-1986)

Cory Aquino (1986-1992)
Fidel V. Ramos (1992-1998)
Joseph Ejercito Estrada (1998-2001)
Gloria Macapagal Arroyo (2001-2010)
Noynoy Aquino (2010-present)

Ferdinand Marcos
MASAGANA 99
GREEN

REVOLUTION

Effects:

Adopted New Rice Technology

Increase in investment in AFF

Farmers given price support

Cory Aquino
Republic

Act No. 6657

(Comprehensive Agrarian Reform
Law)

Effects:
-Rice Production increases
-Expanded the land for agricultural purposes
-Tribal Farmers receive support for farming
systems.
-Cooperative for farmers

Fidel Ramos
PASSAGE

OF THE AGRICULTURE AND

FISHERIES MODERNIZATION ACT OF
1997

Comprehensive

Agrarian Reform Law

(CARL)
EFFECTS:
-Additional Land were distributed to the farmers
-Brought back the support of CARP stakeholders
-DAR was rebuild

Joseph Estrada
Magkabalikat

Para sa Kaunlarang
Agraryo or MAGKASAKA.

Agrikulturang

Maka Masa

EFFECTS:

Intensification of building social infrastructure

Huge funds for Agricultural Programs

DAR forged into joint ventures with private

investors

Gloria Arroyo
Agricultural

Modernization and
credit financing Program

Effects:
-The country became a major importer of agriculture
-The local market of agriculture products slowed the
growth
-Decreased the share of agriculture sector to GDP

Benigno Aquino

Comprehensive Agrarian Reform Program

extension with reforms (CARPER) or
Republic Act No. 9700

EFFECTS:

Broaden privatization through public-private partnership

programs (PPPs).

The agricultural sector has been a captive of highly

protectionist policies

Trends in Investment and

Employment for the past 26 years

The year of 1987, when the Corazon Aquinos

Administration garnered the highest AFF employment and
gained the most investment.

The first year of the Marcos administration (1983), marked

the lowest investment among the years under observation

The year 2010 showed the lowest employment level.

-The trend in investment are observed to be higher, a year

after the beginning, and before the end of an administration
while, the employment, only during the beginning of each
administration.

DISCUSSION OF FINDINGS

Results of Regression-Correlation
Analysis

findings showed that for every 1 percent increase in

investment generates an average of 9,809.82 (thousand)
increase in employment.
1:9,810
The results, in addition, showed a goodness of fit with a
value of 0.672.
This means that investment in AFF sector only accounts
for 67.2 percent of the total employment, 32. 8
percent of which, is caused by other factors such as
infrastructures, policies, etc.

DISCUSSION OF FINDINGS

Impediments to Investment Generation

Lack of Access to Public Lands

Lack of Access to Private Lands
Inadequate Infrastructure
Local Governance Weaknesses
Limited Access to Long-term Financing
Limited Access to Technology
Limited Access to Raw Materials
Lack of Global Market Access
Unstable Peace (Law) and Order
Widespread Corruption
Weak Enforcement of Contracts and Laws

POLICY ALTERNATIVE 1

REDIRECTION OF INVESTMENT FROM

AGRICULTURAL LAND ACQUISITION AND
DISTRIBUTION TO INFRASTRACTURE, AND
RESEARCH AND DEVELOPMENT

Mechanism of Implementation
-Focus on the proper allocation of investment
-Financially support for the construction and
upgrading of farm-to-market roads, drainage
systems and slope protection works
-Rehabilitate and expand irrigation schemes
-Monitor closely and finance the proposals and
projects the PCCARD approves

POLICY ALTERNATIVE 1

ADVANTAGE

There is a potential to increase production and income as it

will provide farmers with more crops and better access to
markets.

DISADVANTAGE

There shall be deliberate discussion on budget allocation.

POLICY ALTERNATIVE 2

Strengthen the ENFORCEMENT and MONITORING of

AFF SECTOR RELATED CONTRACTS and LAWS

Mechanism of Implementation
-Reform on LGUs and leading agencies/institutions
responsible for the program/policy/law
implementation
-Information dissemination on valuable knowledge,
studies and records regarding budget allocation and
program/project implementation
- Close monitoring of implementing bodies to
strengthen the effectiveness of the laws and
programs

POLICY ALTERNATIVE 2

ADVANTAGE

There is an assurance that the laws, programs and projects

are made and performed according to standard. It could also
help in strengthening investor confidence.

DISADVANTAGE

It would take a lot of effort on the part of the national

government and the people to monitor these
institutions/bodies to ensure that they are performing
according to peoples good will.