THE MACROECONOMIC QUESTION: WHY ARE WE IMPORTING ABACA?

THE MACROECONOMIC QUESTION: WHY ARE WE IMPORTING ABACA?

There are times when I feel like I’m asking simple questions that somehow don’t get simple answers.

Case in point: Does the Bangko Sentral ng Pilipinas (BSP) use local abaca for making Philippine banknotes—or are we, ironically, importing abaca to print our own currency?

I expected to confirm what I’ve always assumed—that the BSP sources abaca locally, especially from our very own Catanduanes, long hailed as the Abaca Capital of the Philippines. But to my surprise, when I checked with online sources, it showed that both the cotton (80%) and the abaca (20%) used in our banknotes are imported. If that’s true, it’s not just surprising—it’s disappointing.

Why? Because abaca is indigenous to the Philippines. In fact, we’re the world’s leading exporter of abaca. So why would we buy from abroad what we grow at home—and in doing so, deprive our own farmers and fiber producers of a steady, high-value market?

Now, let’s suppose for a moment that quality or processing standards are the issue. Then I ask—why haven’t we, after all these years, developed our local industry to meet those standards? Is it so difficult for a country that exports abaca to produce abaca fit for our own money?

Meanwhile, let’s not forget another fiber that deserves our attention: cotton. There’s long been talk of developing cotton farming in the Ilocos Region, particularly as a replacement for tobacco, a crop that is slowly but surely losing its market relevance. Studies have shown that Ilocos Sur has the right climate and soil conditions for cotton. But unfortunately, the numbers say otherwise—crops like garlic and watermelon currently yield better returns.

Still, I believe cotton deserves a fighting chance. What’s missing is a guaranteed local market, and who better to provide that than the BSP? If the central bank makes a long-term commitment to buy local cotton, that could be the tipping point needed to revive cotton farming—just like how the sugar industry was once supported by quota buyers.

As for abaca, one can’t help but feel for the farmers in Catanduanes, especially now that recent typhoons have likely caused serious damage to their crops. The reports are still coming in, but we don’t need a weather bulletin to know what’s next: If Catanduanes is to recover, its abaca industry must be rebuilt. And rebuilding doesn’t just mean planting again—it means investing in processing, marketing, and innovation.

Which brings me to a curious announcement made six years ago. Back then, the Department of Science and Technology (DOST) excitedly declared that it had developed a technology to produce currency bank paper (CBP) using local indigenous materials. A great breakthrough, no doubt. But since that initial splash of news—nothing. No follow-up, no pilot production, no adoption by the BSP. Was the technology shelved? Forgotten? Or ignored?

And yet, innovation continues in small but hopeful steps.

Take the fiber yarning machine developed by the National Abaca Research Center (NARC) at the Visayas State University. This machine produces abaca yarn more efficiently and at a higher quality—an innovation that could finally allow our local abaca to compete with imported materials not just in terms of quantity but also consistency.

Even more exciting is the bioplastic innovation spearheaded by the Forest Products Research and Development Institute (FPRDI). This research involves blending abaca with nanocellulose film to produce a biodegradable, stronger version of Manila Hemp. If commercialized, it could replace conventional rope and petroleum-based plastics—meaning less plastic waste and more sustainable income for farmers.

Now this is what I mean when I talk about the macroeconomics of abaca. This is not just a fiber—it’s an economic asset with the potential to support livelihoods, reduce imports, boost green innovation, and even help fight climate change.

But it won’t happen on its own.

So I ask—what would it take for our government to finally treat abaca and cotton not just as agricultural commodities, but as strategic resources? Perhaps the BSP could take the lead, not just as a user of raw materials but as a partner in agricultural industrialization. Perhaps the DOST could revive and scale up its innovations and work hand in hand with DA and DTI. And perhaps LGUs in regions like Catanduanes and Ilocos could help farmers modernize and organize their cooperatives.

We don’t need to reinvent the wheel. We just need to follow through on what we’ve already started.

Let us not be the country that grows abaca, and yet still leaves its abaca farmers poor.

Ramon Ike V. Seneres, www.facebook.com/ike.seneres
iseneres@yahoo.com, 09088877282, senseneres.blogspot.com

08-14-2025