Economic growth is one of the most important indicators of a healthy economy.

One of the
biggest impacts of long-term growth of a country is that it has a positive impact on national income
and the level of employment, which increases the standard of living. The government must find a
means to invest on a grand scale in schools, factories, roads, and so on, or its ambitions will come
to nothing. If funds cannot be had from foreign sources, they must be taken from the domestic
economy which in most cases means from agriculture (Bruce F. Johnston). Philippines is one of
the countries of the Southeast Asia region blessed with an abundance of natural resources. Its
arable land and climate are conducive to growing agricultural crops that can provide for the needs
of its population and support the country’s thriving economy (Pulhin and Ramirez 2013). For
several decades, the government has sought to develop the agriculture sector through programs
like agrarian reform, agricultural modernization and rural finance, but farmers remain to be the
poorest sector in the Philippines. The government needs to implement and improve on its existing
programs to fast-track the development of the agriculture sector to make economic growth more
inclusive (UPSE 2014). However farm area devoted to agriculture has been decreasing due to land
conversion. Furthermore, farming as a profession has become less attractive to the young and
educated people that is why Most Filipinos do not like to go into agriculture because of the level
of difficulty and the supposedly low income being associated with it (Ballesteros, M., Llanto, G.
2003). This study measures the impact of agricultural activities to the economic growth of the
country.

Some researchers states that most economists have posited that an economic focus on
industrialization is the road toward economic growth and development, given the past experiences
of modernized economies during the Industrial Revolution, as well as the recent export-oriented
growth of Asian economies. Productivity is higher in the industrial sector than the agricultural
sector due to technological advances. The economies of scale in large, integrated supply chains
have resulted in gains and concentrated manufacturing results in opportunities for capital
accumulation. This has proved to be one of the main sources of aggregate growth a la the Harrod
Domar Hypothesis (Szirmai 2009). On the other hand, a few existing studies on the side of
tourism’s contribution to economic growth. Copeland (1991) believes that the tourism sector is
one of the most important sources of economic growth and development for many countries. In
his general equilibrium international trade model, the increase in the number of foreign visitors
can enhance the welfare of the country, if the price of non-tradable goods and services increases
in an economy without taxes, foreign ownership, and distortions (Copeland 1991). Hazari and Sgro
(1995) investigate the relationship between growth and tourism, capital accumulation,
consumption per capita, and terms of trade. Their findings reveal that tourism contributes to the
long-term growth rate, especially for small countries.

Studies revealed that agrarian reform indeed contributed to the improvement of the quality
of living of rural households and the level of development of rural communities (Gordoncillo
2013) such as “People’s Agrarian Reform Code” (PARCODE) which is a land reform program
that will ensure a more egalitarian landownership structure. Moreover, since it is premised on the
development of small-sized farms, it will ensure the economy of a more efficient allocation of the
country’s resources (Tadem 2015) which covers implementation of just labor relations for
farmworkers to encourage more farmers. Also Trade Policy & Agreements like Philippine-Japan
Economic Partnership Agreement (PJEPA), the only comprehensive economic bilateral agreement
of the Philippines, which allows duty free access for up to 80% of Philippine exports to Japan for
almost 7,500 products ( DTI 2017) which increase the demand for agricultural produce and
Philippines being a member in the Association of Southeast Asian Nations (ASEAN) encouraged
open trade links and has offered the country a greater degree of political influence on the regional
stage (IHS Connect, 2016). The drive to upgrade the sector seeks to fulfill the national growth
agenda for reducing poverty, achieving the UN sustainable development goals and inclusive
growth (NEDA, 2011) will help the Agri-business of the Philippines to boost and will lead to the
economic development of the country.

The studies stated above talks about the factors that can help to boost economic growth.
Moreover, different insights of the researchers on which factor that can greatly affect the growth
of the economy. In these paper, the agricultural is much more given emphasis as how it can affect
or its impact to the growth of economy since the Philippines is abundance in natural resources.