Country Report Philippines June 2011

Economic performance: The drought-hit agricultural sector begins to recover

After a poor performance in 2010, when the agricultural sector contracted by 0.5% owing to drought-like conditions associated with the El Niño weather phenomenon, agriculture has had a strong first quarter in 2011. According to the Bureau of Agricultural Statistics, agriculture expanded by 4.1% year on year (at constant prices) as crop production, which accounts for around one-half of value added in the sector, responded to favourable weather and improved irrigation. Crop production rose by 8.2% year on year, with the country's main crop, rice, recording growth of 15.6%. Corn was up by 19.5%. Other agricultural sectors recorded much slower growth, with livestock expanding by only 0.6% and poultry by 3.9%, while fisheries contracted by 3.5%. Although agriculture accounts for only around 14% of GDP, its first-quarter expansion-and especially the growth in food staples-should support personal income while reducing the need for food imports.

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