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A maritime nation

A maritime nation
Fermin Adriano June 24, 2021

ACCORDING to the United Nation Food and Agriculture Organization, the Philippines is the 10th-largest marine capture producer in the world with an average production of 2.156 million metric tons from 2005 to 2014. This can be attributed to the country's vast aquatic resources that include 2.2 million square kilometers (km) of exclusive economic zone, 36,289 km of coastline length and approximately 1.499 million hectares of inland waters. However, despite the country's enormous marine resources, the share of the fishing and aquaculture subsector to the country's gross domestic product (GDP) is relatively small. More specifically, from 2010 to 2020, the average contribution of the fishery industry to the country's gross domestic product is only 1.5 percent at constant 2018 prices.

Although the fishery's share to GDP is minimal, it remains a major subsector in the agriculture, forestry and fishing sector. It ranks second among all agricultural subsectors in terms of average gross value added from 2010 to 2020 wherein the foremost commodity is rice.

However, the local production of the fishery industry has been relatively stagnant. The average annual growth rate of the subsector is only 0.9 percent from 2010 to 2020. Several studies have attributed its relatively low growth performance to extensive overfishing. More specifically, studies reveal that although more investments and better overall technology are being utilized in the fishery sector, the trend is that the catch per unit effort is drastically declining over time since the country's fishery industry has reached the "maximum sustainable yield" of its fish stocks.

A sad refrain

The fishery subsector, like most of the agricultural commodities where we have a comparative advantage, suffers from systemic neglect. For one, no political administration, past or present, has heavily invested in it. A cursory examination of the budget of the Bureau of Fisheries and Aquatic Resources under the Department of Agriculture (DA) will reveal that the subsector has been given a pittance of a budget ranging from P5 to P7 billion annually depending on the generosity of Congress. In contrast, the budget for rice is around P27 billion (including funds from the Rice Competitive Enhancement Fund, National Rice Program and the additional sums from the Bayanihan fund). In other words, the rice bias of the DA's budget due to the effective lobbying of political pressure groups is a major reason why other agricultural commodity sectors, like fisheries, are underdeveloped.

Second, given the stingy government budget for the development of the fishery industry, the alternative and better strategy is to attract the private sector to invest in fishery ventures. For this to happen, the government needs to provide the conducive policy environment for the private business sector to pour money into the subsector. The government has indeed passed numerous laws and regulations, starting from the Philippine Fisheries Code of 1998, and lately, issued a series of administrative issuances, supposedly to conserve our coastal resources and protect our small fisherfolk from "unfair" competition from imported fish products.

Unfortunately, the current policy framework does not seem to convince the private business sector to venture into the fishery industry. The government's twin goals of protecting our small fish producers and conserving our coastal resources are simply not enough to attract substantial private sector investment in the fishery subsector. This is ironic because the country enjoys a comparative advantage in the fishery industry.

Maritime nation

A third reason, which remains a puzzle to many, is why despite having enormous coastal resources, our government has hardly devoted attention to developing our maritime industry. We could have prioritized the development of a shipbuilding and repair industry in Subic, which is an ideal site for such a venture as it served as a major US naval base in the past. Da Nang in Vietnam, which was also a former US naval base during the height of the Vietnam War, now has a robust shipbuilding and repair industry. Ironically, many of its welders and skilled labor are Filipinos.

Rubbing salt into the wound, the Philippines deploys hundreds and thousands of its sea workers abroad to man international shipping vessels owned by various countries that transport goods from various parts of the world. We cannot employ them here because we simply do not have our own ships that they can run.

In the 15h to 17th centuries, countries in Europe with substantial coastal areas like Spain, Portugal, Britain, the Netherlands and France devoted enormous resources in developing their maritime power for three reasons. First was the need to defend themselves from their enemies coming from the neighboring countries of Europe. Second was that their naval fleet would enable them to conquer new territories to bolster their imperial power. And third was that new territories meant that they could extract natural resources found in these places to further finance their country's development.

In modern times, the United States and lately China have adopted the same principles that the industrializing European powers embraced in the past but with an adjusted goal given the different historical epoch we are in. For both the United States and China, a powerful naval force is a means to defend the main island from military invasion and deter their enemies. Now, there is the added goal of protecting shipping trading routes vital to transport goods from raw material supplier countries to manufacturing or processing nations and vice-versa.

And for China, there is now the added objective of controlling the rich resources found above and underneath those oceans or seas to guarantee that it can meet the food and other consumer demands of its more than 1 billion population. Given growing scarcity of natural resources in the coming years, this move by China is indeed strategic.

As for the Philippines, the lack of a systematic plan to develop our fishery subsector to make full use of our coastal resources and to develop the country into a maritime power speaks volume of the absence of a visionary leadership in the country.