SOURCE: Business Mirror
Guatemala is the largest economy in Central America and is an upper-middle country based on its GDP per capita of $4,603 in 2020, according to the World Bank. The Washington-based multilateral lending institution characterized its economy as having “the least volatile growth among its structural and aspirational peers.” This was achieved years after it began its slow march towards political and economic recovery following a civil war that lasted 36 years.
Many Filipinos may not be familiar with Guatemala, which is not surprising as it is not a popular tourist destination for locals who wish to spend their vacation abroad. Stakeholders in the local farm sector, however, know Guatemala very well as it has recently stripped the Philippines of its status as the world’s second-largest exporter of bananas. Based on data from the Food and Agriculture Organization of the United Nations, the Central American nation has overtaken the Philippines in terms of banana exports last year.
In a report, FAO estimated that Guatemala exported a total of 2.467 million metric tons of bananas last year, eclipsing the Philippines’s 2.235 MMT. The UN body noted that Philippine banana growers are grappling with the spread of Fusarium wilt or Panama disease, which could wipe out entire banana plantations. The spike in the cost of inputs and fertilizers, which was largely caused by the conflict in Eastern Europe, has also made it difficult for traders to keep the price of the crop at an affordable level.
The Philippines, according to FAO, has lost substantial market share in key banana destinations, such as China. From 75 percent, the market share of Philippine bananas in China fell to just 38 percent. And this trend may be seen in other traditional markets of Philippine bananas as the FAO report took note of the increasing exports of other Central American banana producers, including Guatemala.
Apart from coconut oil, banana is one of the major agricultural export earners of the Philippines. Based on data from the Philippine Statistics Authority (PSA), the country’s banana exports reached $1.096 billion last year, second only to shipments of coconut oil, which reached more than $2 billion. However, export receipts from bananas recorded in 2022 were nearly 4 percent lower than the previous year’s $1.138 billion.
Reversing the sagging trend of banana exports would require major reforms particularly in eliminating Panama disease, which continue to threaten banana-producing areas. Banana growers and exporters belonging to the Pilipino Banana Growers and Exporters Association are banking on the campaign promise of the President, who is concurrent agriculture chief, that a state-of-the-art Banana Research and Development Center would be set up during his term. Lawmakers should help the President make good on his promise that he will arm the banana sector with the necessary tools to become competitive in the international arena.