23. Philippines
Support to agricultural producers (Producer Support Estimate, PSE) in the Philippines averaged 22% of gross farm receipts in 2020-22, like 20 years earlier but below a peak of 28% in 2014. The current support level is the highest among the emerging economies covered in this report.
Although budgetary support gained in prominence over the last three years, support to farmers continues to be dominated by Market Price Support (MPS), mainly provided by transfers from consumers. Rice producers are the main beneficiaries of MPS, which is primarily provided through import tariffs. Sugarcane and animal products also receive substantial MPS. As a result, domestic producer prices were 29% higher than world market prices on average in 2020-22. Payments to farmers support variable inputs and investment in agricultural equipment and facilities. MPS and payments for inputs (which, together with payment based on output volumes, represent the most production- and trade-distorting measures) account for 96% of support to farmers.
The General Services Support Estimate (GSSE) in 2020-22 equalled close to 5% of the sector’s value of production, almost double the value observed 20 years earlier. It is dominated by investments in infrastructure (notably in irrigation systems and farm-to-market roads) and in the agricultural knowledge and innovation system (in particular for extension programmes). Overall, total support to the agricultural sector accounted for 2.3% of GDP in 2020-22, down from 2.9% in 2000-02 but still the highest among countries reviewed in this report.
The President-elect took over the responsibilities for the Department of Agriculture (DA) in 2022 and became Secretary of Agriculture. This is the first time a president has also held this role. The budget allocated to agriculture increased 40%, from PHP 117.29 billion (USD 2.2 billion) in 2022 to PHP 163.5 billion (USD 3 billion) in 2023.
The government introduced several measures to mitigate the impacts of Russia’s war of aggression against Ukraine. These include programmes to reduce the cost of fertilisers and fuel, and tariff reductions to facilitate access to imports. In addition, the government continues to impose Suggested Retail Prices (SRP) for specific food items.
During the 2022-23 school year, the Milk Feeding Programme, which provides milk and milk products to often underfed and nutrient-deficient students in public day care, kindergartens, and elementary schools, received 80% of its needed milk volumes from local dairy farmers and co-operatives. This follows direct distributions of food and milk packs to homes or through a pick-up system during school closures that started during the COVID-19 pandemic. PHP 3.7 billion (USD 68 million) was earmarked for this programme.
The Agriculture, Fisheries and Rural Development Financing Enhancement Act of 2022 replaced the Agri-Agra Law in July. While government and private financial institutions used to be required to allocate at least 15% of their lending portfolios to the agricultural sector and 10% to agrarian reform, the new law offers these institutions greater flexibility in allocating the minimum total 25% of their loanable funds between the agricultural sector or agrarian reform. The Act also expands agricultural credit to include agriculture and fisheries-related activities such as agricultural mechanisation and modernisation, agri-tourism, public rural infrastructure, marketing and processing, and digitalisation of agriculture.
The Coconut Farmer and Industry Development Plan was approved in June 2022. The 2021 Coconut Farmers and Industry Trust Fund Act makes PHP 75 billion (USD 1.4 billion) available for five years to modernise the coconut industry and increase the income and competitiveness of coconut farmers.
Since the late 2000s, the DA has prioritised climate-change adaptation in the national policy framework and taken important steps to mainstream resilient building and disaster reduction in its programmes and operations. However, adaptation policies should have defined and measurable outcomes, and efforts should be undertaken to monitor their impacts. While funding for adaptation measures is increasing, their implementation should be carefully monitored, and public funding should encourage private investment to address the sector’s needs. The effectiveness of current risk-management tools should be assessed – particularly the extent to which insurance and cash-transfer schemes encourage risk-reducing decision making on farms. Moreover, the current system of strong support for specific commodities (notably sugar and rice) creates a barrier to adjusting production structures to a changing climate. The prevailing price support should be reformed to incentivise needed transformation of the sector.
The Philippines must accelerate development and implementation of climate-change mitigation policies for agriculture to meet commitments to reduce emissions by 75% of projected business-as-usual emissions between 2020 and 2030 (subject to the provision of climate finance and help with implementation), as outlined in its 2021 Nationally Determined Contribution. Targeted actions should focus on the most important emission sources and economically viable solutions, such as by changing rice-production methods and encouraging rice farmers to diversify their production.
The Philippines’ agricultural policy focuses on food security and poverty alleviation through a guaranteed supply of staple food (rice) at affordable prices, backed by policies supporting rice producers that make rice one of the most heavily supported agricultural commodities. Reducing tariff rates for rice, pig meat, and poultry on a temporary basis since 2021 to ensure food security has marked a significant policy shift. Further reductions in tariff rates should be pursued in the future. Removing commodity-specific support can enable diversification of farm income sources and spread farmers’ risk, reducing vulnerability to climate shocks.
GSSE increased since 2000-02 but plateaued in the last ten years. Boosting long-term investment in infrastructure and R&D should lift productivity in the agricultural sector, which is growing slower than the global average and than most countries in the region.
Overview of policy trends
Heavy government interventions in agricultural markets within a closed economy characterised the Philippines during the period from 1970 to 1986. The government had monopoly control over trade in rice, sugar and maize, operated by the National Grains Authority (NGA) established in 1972 (later renamed the National Food Authority [NFA]). Sugar trade was nationalised under the National Sugar Trading Corporation. At the same time, high-yield rice varieties were introduced and their use was encouraged with input subsidies, as was the use of fertilisers and pesticides. Public spending in the sector increased (particularly on irrigation), financed by a mix of taxes on major agricultural exports and foreign loans. Access to credit was facilitated by legally obliging financial institutions to provide 25% of their loans to the agricultural sector. Budgetary expenditures financed extension services to the farming sector (OECD, 2017[1]).
Partial liberalisation of the sector was implemented gradually from 1986 to 2000. Reforms undertaken in the 1990s aimed to improve services provided to agriculture, particularly extension services, and infrastructure. Market interventions were gradually reduced, as were tariffs and non-tariff measures on agro-food imports. The policy of self-sufficiency in rice continued with the provision of input subsidies to farmers, mainly for fertilisers and certified seeds, but also with credit facilitation and the provision of support to public services for agriculture, such as investments in irrigation and farm-to-market roads. At the beginning of the 1990s, the Philippines negotiated a number of trade agreements (for example, it is a founding member of the ASEAN Free Trade Area). Upon joining the WTO in 1995, the country committed to removing quantitative restrictions on imports of sensitive agricultural products, with the exception of rice, and to gradual liberalisation of agro-food trade. Public expenditure on agriculture declined substantially in the late 1990s, due to tight fiscal policies adopted in the aftermath of the Asian Financial Crisis (OECD, 2017[1]).
Since 1988, the Philippines has undertaken an ambitious agrarian reform to redistribute agricultural land to landless farmers and land workers. The reform covered close to three-quarters of the country’s agricultural area. While the redistribution of land was effectively complete by the end of 2015, property rights remained unsettled and almost half of the reform beneficiaries still have collective ownership certificates instead of individual property rights.
During the 2000s, the government undertook policy measures to further reduce market interventions in agriculture. Subsidised credit programmes were terminated, and private traders allowed to import rice at limited levels. However, the focus on food (rice) self-sufficiency was reinforced and after the global food price crisis in 2008 spending on irrigation and input subsidies increased substantially. The Food Staples Sufficiency Programme, launched in 2011, retained a focus on rice and other selected staples, but shifted emphasis away from input subsidies towards providing public services to agriculture, such as extension and infrastructure (OECD, 2017[1]). Following the Uruguay Round Agreement on Agriculture, the system of quantitative restrictions for rice was abolished in March 2019 and replaced by a tariff rate quota system. The government established the Rice Competitiveness Enhancement Fund (RCEF) in 2019 to offset the effect of the liberalisation of rice imports on producers’ incomes. This fund has an annual appropriation of PHP 10 billion (USD 203 million) for six years (until 2025).
Support to farmers as a share of gross farm receipts (percentage PSE) gradually increased until 2014 where it reached its maximum level of 28% before declining to 21% in 2020. Support has then been growing over the last two years, stabilising to 24% in 2022. This is the highest among the emerging economies included in this report. MPS for imported commodities (i.e. rice, maize, beef, poultry, pig meat and eggs) constitutes almost all of the support to farms and largely reflects existing trade barriers mainly in the form of tariffs and tariff rate quotas (Figure 23.4). Rice is the most important commodity in terms of value of production, so the level and fluctuation of market price support for rice largely drives the evolution of total MPS. MPS for rice is implemented through multiple policies that include support prices, release prices, government procurement and import restrictions. Most of the exported commodities covered (coconut, bananas, mangoes and pineapple) are not subject to trade or domestic policies and hence do not receive any MPS. Sugar receives price support through sugar production quotas, regulation of foreign trade and protection with high tariffs. Budgetary support to producers is low, and exclusively made up of payments based on input use. Most of these payments are based on production support services (such as the distribution of seeds or fertilisers) and provision of agricultural machinery, equipment and facilities linked to commodity specific programmes.
Main policy instruments
Price support policies are an important part of the policy mix. These mainly focus on rice and sugar and take the form of trade barriers (tariffs and TRQs) and domestic market regulations for rice. The National Food Authority (NFA) implements rice price support by buying buffer stocks at administered prices from domestic producers and selling these stocks at subsidised prices to consumers. For sugar, production quotas and trade barriers (tariffs and TRQs) provide producer price support and market regulation.
Tariff protection is the Philippines’ main trade policy tool. Trade liberalisation primarily occurs within regional trade agreements, particularly the ASEAN Free Trade Area. The simple average applied Most Favoured Nation (MFN) tariff on agricultural products was 9.8% in 2020. Tariff lines applied are ad valorem and range from 0% to 66.9% (USTA, 2022[2]).
Tariff rate quotas are applied to 14 agricultural products, with in-quota tariffs ranging from 30% to 50% and out-of-quota from 35% to 65%. Products covered include live swine, goats and poultry and poultry meat, potatoes, coffee, maize, rice and sugar. Import licensing is required for all regulated products (including those under TRQs), and is intended to safeguard public health, national security and welfare.
Quantitative restrictions on rice imports were replaced with an import tariff system in March 2019, under the Rice Tariffication and Liberalisation Law (RA 1120) implemented to comply with the Philippines’ WTO obligations. In place of a quota on imports from ASEAN countries, a single tariff of 35% for rice applies. For rice imports from non-ASEAN countries, a TRQ applies. Applied MFN in-quota and out-of-quota tariffs for rice are set at 40% and 50% respectively. Additionally, grains, grain products and sugar require export permits. To offset the effects of rice liberalisation and to encourage self-sufficiency, the Philippines Department of Agriculture (DA) has implemented several support programmes for rice producers.
Budgetary support to agricultural producers, both through payments provided to farmers individually and to the agricultural sector as a whole (general services), is small compared to the level of price support. Budgetary support to producers focuses on subsidising the use of variable inputs, including seeds and fertilisers. General service payments are mainly for infrastructure and agricultural research and development.
In April 2021, the Philippines submitted its Nationally Determined Contribution which committed to reduce GHG emissions by 75% relative to projected business-as-usual cumulative emissions between 2020 and 2030, of which 2.7% is unconditional and 72.3% is conditional (UNFCCC, 2021[3]).1 For 2021-30, the conditional target GHG emission reduction for agriculture is 29.4% below the business-as-usual scenario of 539.09 MtCO2eq cumulative emissions (Department of Agriculture (DA), 2022[4]). In 2022, the agricultural sector accounted for around a quarter of national emissions and was the second-highest emitter of GHGs in the Philippines, after the energy sector. The Philippine’s ambition is to focus mitigation efforts on the major sources of agricultural GFG emissions (paddy rice cultivation, livestock enteric fermentation, soil cultivation, and livestock manure management) by adopting nature-based solutions (e.g. microbial inoculants or diet modification to reduce emission from livestock), crop management techniques (such as supplements like biochar and organic fertiliser to increase soil friability) or renewable energy for water management,
Climate change adaptation policies in agriculture
Located along the Pacific “Ring of Fire”, the Philippines frequently experience earthquakes and volcanic eruptions. The archipelago of 7 109 islands is also at the centre of a typhoon belt and typically experiences 20 typhoons every year, in addition to risks of flooding, drought, and rising sea levels.
In 2022, the Philippines had the highest disaster risk according to the World Risk Index, which measures both the exposure and vulnerability of a country’s population to potential impact from natural hazards (IFHV, 2022[5]). Due to climate change, the Philippines face an increased frequency of extreme weather events, the consequences of rising sea levels, temperature increases, and changes in rainfall patterns. Natural disasters aggravated by climate change cause considerable damage to the agricultural sector and pose major risks to agricultural output and productivity growth. From 2010 to 2019, damage to agriculture amounted to around USD 5.7 billion or 63% of total estimated damage from extreme natural events and disasters (The World Bank Group, 2022[6]; OECD, 2017[1]).
As the impact of climate change became increasingly visible, the Climate Change Act was enacted by the government in 2009 and established the Climate Change Commission (CCC) as the policy-making body to co-ordinate, monitor, and evaluate national climate-change programmes and action plans. The CCC’s advisory board comprises government agencies (e.g. DA, Department of Environment and Natural Resources, Local Government Units) and representatives from academia, the business sector, and non-governmental organisations. The CCC also supports efforts to reduce GHG emissions and promotes activities to increase resilience to natural disasters (e.g. using early-warning systems) with the National Disaster Risk Reduction and Management Council (NDRRMC). Through the CCC, the Philippines submitted its Nationally Determined Contribution, which identified both mitigation and adaptation measures (Department of Agriculture, 2022[7]).
Strategic climate-change adaptation priorities are integrated in the Philippines’ policy framework through the 2010-22 National Framework Strategy on Climate Change (NFSCC) and the 2011-28 National Climate Change Action Plan (NCCAP). The NFSCC seeks to build the adaptive capacity of communities, increase the resilience of natural ecosystems to climate change and optimise mitigation opportunities towards sustainable development (Climate Change Commission (CCC), 2010[8]). The NCCAP determines climate-related objectives and provides priorities for action in seven thematic areas, including food security, water sufficiency, and ecosystem and environmental stability, among others.
The DA launched the Climate Change Systems-Wide Programme in 2013, which cuts across policy instruments and agencies of the Department and allows it to address climate-change vulnerabilities and risks in designing and implementing its programmes. Within the DA, the Climate Resilient Agriculture Office (CRAO) oversees programmes focused on climate-change adaptation and mitigation in agriculture. The CRAO and DA Regional Field Offices (RFOs) partner to provide farming communities assistance, and prepare and disseminate farm and fishery advisories based on weather outlooks.
The flagship programme of the DA’s climate agriculture policy is the national and system-wide Adaptation and Mitigation Initiative in Agriculture (AMIA), which enhances climate-resilient agriculture technologies and practices in local communities, helping farmers and fishers build sustainable living conditions and enterprises. The programme aims to increase the capacity of individual farmers and fishers to use and apply climate information and support services that: (1) improve their food, nutrition, and livelihood security; (2) promote climate-resilient and sustainable production and management practices and technologies; (3) develop and adopt risk-transfer mechanisms to protect their income and livelihoods from sudden and slow-onset climate-related stress and shocks; and (4) support the development of climate-resilient agricultural and fisheries infrastructure (Department of Agriculture, 2022[7]).
AMIA is implemented by the DA in partnership with the RFOs, universities, international organisations, financial institutions, and non-government organisations. As of December 2022, there were 163 climate-resilient “AMIA villages” in different stages of implementation, located in 55 provinces, and 213 additional climate-resilient pilot sites under development. Through the AMIA village approach, productivity-enhancing technologies and integrated support services tailored to the needs of the community are continuously being delivered to farmer-beneficiaries, such as the provision of drought-tolerant varieties, drip irrigation and water harvesting, and the use of coconut husks as mulch in the upland agro-ecological zone (Department of Agriculture (DA), 2022[4]).
In 2022, the DA launched training modules for local government units (LGUs) on evidence-informed planning, and provided on-line presentations on climate information services and workshops for farmers. These additional training and extension services aim to disseminate adaptative tools, technologies and practices.
The CRAO also provides climate and weather-informed services; and helps complete climate-risk and vulnerability assessments, and disaster-risk reduction financing and risk transfer. The CRAO partners with national and local government units to expand regional coverage of climate-risk and vulnerability assessments, and develop an understanding of the current and future climate risks facing the region. As of December 2022, 58 provincial Climate-Risk Vulnerability Assessment (CRVA) maps were completed to focus the investment projects of DA Banner Programs. CRVA maps are among the decision-support tools developed under the AMIA programme, designed to ensure that climate-resilient technologies are applied. RFOs provided regular farm and fishery advice based on the climate outlook in 2022. Three types of information have been generated: (1) the 10-day Farm Weather Outlook and Advisory (FWOA) provides a weather forecast and farm actions to avoid losses or ensure effective farm-management practices; (2) the Seasonal Climate Outlook and Advisory provides information on expected extreme events during the upcoming six months, such as typhoons, drought, and dry spells; and (3) the special FWOA tracks incoming typhoons and provides advice on climate-resilient agriculture practices to prevent or limit damage before, during, and after a typhoon (Department of Agriculture (DA), 2022[4]).
The Survival and Recovery Loan Assistance Programme is the DA Agricultural Credit Policy Council’s (ACPC) umbrella loan programme for post-disaster recovery. It supports small farmers and fishers through loan and grant assistance in areas affected by calamities. Borrowers can receive interest-free financial assistance up to PHP 25 000 (USD 459) to contribute to finance the rehabilitation of farming, fishing, and livelihood activities. ACPC’s partners (co-operatives, NGOs, associations, and rural or co-operative banks) granted a total of PHP 418 million (USD 7.7 million) in loans to small farmers and fishers from 2019 to 2022.
The government’s lead agricultural insurer, the Philippines Crop Insurance Corporation (PCIC) provides farmers and fishers with insurance against losses of crops and non-crop agricultural assets due to natural calamities, pests and diseases, and other risk factors. The PCIC provided almost 3.2 million farmers and fishers with insurance coverage amounting to PHP 103.47 billion (USD 1.9 billion) in 2021. Insured crop area accounted for 18% of total crop land, with two third of the insured coverage devoted to rice, maize, and high-value crops. Farmers can choose between natural-disaster coverage (including typhoon, flood, drought, earthquake, volcanic eruption, and tornado) or multi-risk coverage (including crop losses caused by natural disasters, plant diseases, or pest infestation). With an additional premium, livestock (cattle, swine, poultry) are eligible for natural-disaster coverage (typhoon and flood). The budgetary expenditures allocated by the government to the PCIC to provide subsidised agricultural insurance amounted PHP 4.5 billion (USD 83 million) in 2022.
In 2022, the DA attributed PHP 24 billion (USD 480 million) to its programmes and activities devoted to climate-change adaptation, a 23% increase over 2021.
Domestic policy developments in 2022-23
After the May 2022 election, the new president took over as Secretary of Agriculture, a first in the Philippines. The new administration set itself a key objective to ensure a sufficient and affordable food supply in the face of numerous challenges and disruptions, including those caused by Russia’s war of aggression against Ukraine, the COVID-19 pandemic, and natural disasters.
In 2022, the DA published the National Agriculture and Fisheries Modernization Plan (NAFMIP) 2021-30 that serves as a directional plan for the agricultural sector for the next decade. The plan sets out strategies to encourage investments and ensure sustained growth in the agricultural and fishery sector, as well as to achieve a resilient food production and distribution system. It focuses on spatial planning and a balanced portfolio of investments in agriculture infrastructure development (e.g. the construction of production and post-harvest infrastructure facilities), the provision of machinery and equipment, and the intensification of research and extension services.
The budget of the DA and its attached agencies increased from PHP 117.29 billion (USD 2.2 billion) in 2022 to PHP 163.5 billion (USD 3 billion) in 2023. The 40% increase is intended to support the transformation of the sector towards a more competitive, sustainable and resilient agriculture while helping the country to overcome the rising cost of inputs and to reduce inflation in food prices.
In April 2022, the National Irrigation Administration (NIA) was relocated from the Office of the President (OP) to the DA as an attached agency. The NIA ensures the development and maintenance of irrigation systems to support agricultural productivity and farmers’ income in line with water management principles. The 2022 return of the NIA to the DA, after a series of transfers between the OP and other departments, seeks to further integrate the agency in the agricultural sector, to strengthen agencies’ mandates in a complementary way and to synchronise both agency’s strategies.
The Senate and House of Representatives of the Philippines enacted the Agriculture, Fisheries and Rural Development Financing Enhancement Act of 2022 which replaced the Republic Act No. 1000, known more commonly as the Agri-Agra Law. The Agri-Agra Law required all financial institutions, whether government or private, to allocate at least 15% of their lending portfolio to the agricultural sector and 10% to agrarian reform. The new act still requires these institutions to allocate a minimum of 25% of their total loanable fund but with greater flexibility between the agricultural sector and the agrarian reform. It also expands agriculture credit to include different agriculture and fishery-related activities, such as agricultural mechanisation and modernisation, agri-tourism, public rural infrastructure, marketing and processing and digitalisation of agriculture. The new law’s objectives are to enhance the productivity, competitivity and sustainability of the agriculture and fisheries sectors and to promote the livelihoods of rural community beneficiaries.
The Coconut Farmer and Industry Development Plan (CFIDP), which aims to modernise the coconut industry and increase income and competitiveness of coconut farmers, was approved in June 2022. The CFIDP was developed and funded through the creation of the Coconut Farmers and Industry Trust Fund Act in February 2021, allowing PHP 75 billion (USD 1.4 billion) to be used over the next five years for the benefit of the country’s coconut industry and its farmers. The Philippines Coconut Authority started to implement the programme in partnership with other government agencies under several priority areas: provision of social protection, strengthening of coconut farmers’ organisations, programmes of research and development, intercropping/livestock integration systems, development of the coconut value chain and provision of support services. As of mid-October, the PCA identified 2.9 million out of the 3.1 million coconut farmers listed in the National Coconut Farmers Registry System as potential beneficiaries of the CFIDP programmes. Eligible beneficiaries include farm owners or coconut growers who own at least 0.5 hectares of land with a minimum of 20 coconut trees; tenants or tenant-workers; and farm workers.
In 2022, the National Food Authority (NFA) intervened in the domestic market by buying rice for buffer stocks at a price set at PHP 19 (USD 0.38) per kg of rice, and by selling domestic rice from its stocks at administratively fixed prices comprised between PHP 23 (USD 0.42) and PHP 27 (USD 0.50) per kg according to the variety of rice and the type of buyers (authorised retail outlets, government agencies or private institutions). Buffer stocks of rice are maintained by the government for the stated purposes of ensuring food security (especially for emergency situations) and stabilising prices. In effect, these stocks are used to support domestic producers with price floors while at the same time protecting consumers with price ceilings. As of 31 December 2022, NFA maintained the equivalent of three and a half days of the average national consumption of rice, with the objective to increase the buffer stock to the equivalent of 9 days of average consumption. In 2022, the Department of Budget and Management in the Philippines raised the allocated funding for the NFA’s buffer stock programme from PHP 7 billion (USD 128 million) in 2022 to PHP 12 billion (USD 220 million) in 2023 to ensure sufficient supply of rice in times of global food crisis.
As defined under the Rice Competitiveness Enhancement Fund (RCEF), support to rice farmers accounted for a total of PHP 10 billion (USD 203 million) in 2022 and was allocated across four components: 50% to rice farm machinery and equipment, 30% for rice seed development, propagation and promotion, 10% for the provision of credit to farmers, and 10% for extension services This fund was initiated in 2019 to offset the effect of the replacement of quantitative restrictions on rice imports with tariffs. It is available for six years (2019-24) and has an annual budget of PHP 10 billion (USD 203 million) financed with the receipts from rice import tariffs. Since its implementation, the programme reduced retail prices of regular milled rice from PHP 45 (USD 0.80) per kg in 2018 to PHP 37 (USD 0.70) per kg in 2021, and provided wider varieties of rice choice to consumers.
The excess rice tariff collection from financial year 2021, above the PHP 10 billion (USD 183 million) mandated under the RCEF, was allocated to the Rice Farmers Financial Assistance programme (RFFA). In the third and fourth quarters of 2022, almost 1.6 million eligible small rice farmers (with 2 hectares or less planted to rice) registered in the government’s Registry System for Basic Agriculture, benefitting from a cash transfer of PHP 5 000 (USD 92) per farm. Funding for this cash assistance amounted to PHP 8 billion (USD 147 million). Under the programme of Cash and Food Subsidy for Marginal Farmers and Fishers, small producers of maize, coconut and sugar cane received similar support in the form of cash and food assistance amounting to PHP 3 000 (USD 55) in cash and PHP 2 000 (USD 37) equivalent in food per farm.
In 2022, an African Swine Fever (ASF) outbreak continued to spread in the Mindanao region and in December 2021 the Rai typhoon damaged pork facilities in Central and Western Visayas, offsetting the herd rebuilding effort happening in the Luzon region. As a result, there was zero growth in pig meat production relative to the 2021 level. Since 2019, when the Philippines reported its first outbreak of African Swine Fever, the country has been struggling to contain the virus, which has resulted in a loss of over 3 million pigs. National zoning measures are in place and the DA is providing financial and technical support to ASF-affected producers under the public and private programme Bantay ASF sa Barangay (BaBay ASF), launched in February 2021. This initiative, still in place, targets improvements in biosecurity and disease control measures through co-operation between local authorities, specialist biosecurity officers and farmers. It also provides insurance to hog farmers. Coupled with the BaBay ASF, the DA implemented the Integrated National Swine Production Initiatives for Recovery and Expansion (INSPIRE), a rebuilding programme focusing on restoring breeders’ pig numbers and enhancing biosecurity. This programme, which covers the 2021-23 period, has an initial budget of PHP 400 million directed at ASF-affected hog producers, farmer’s co-operatives and associations, semi-commercial farms, local government units, and state colleges and universities. To accelerate the rebuilding programme, the DA has also encouraged partnerships between private groups and the Land Bank of the Philippines, which provided credit assistance for building swine biosecurity facilities.
Domestic policy responses to Russia’s war of aggression in Ukraine
In March 2022, the government launched the “Plant, Plant, Plant Program Part 2” to mitigate the effects of high input prices, high logistics costs, decreased agri-food exports and increased food inflation, while boosting local food production. Most (PHP 20 billion, USD 367 million) of the total funding of PHP 24 billion (USD 441 million) was allocated to finance a balanced fertilisation strategy and the fertiliser subsidy, with the remainder equally shared between urban and peri-urban agriculture; local feed production; strengthening of aquaculture and mariculture fisheries; and the mobilisation of food.
After the average retail price of urea more than doubled between May 2021 and May 2022. the government began in March 2022 to provide fertiliser discount vouchers valued at PHP 1 131 (USD 21) per hectare for inbred rice, PHP 2 262 (USD 41) per hectare for hybrid rice, and PHP 2 000 (USD 37) for maize and cassava. These vouchers covered the 2022 wet season and the 2022 and 2023 dry seasons. In February 2022, the DA distributed for free 33 500 tonnes of fertiliser in different regions of the country. To reduce the Philippines’ dependence on imported fertiliser, the Department of Agriculture’s Fertilizer and Pesticide Authority developed the Balanced Fertilization Strategy to promote the use of combined organic and non-organic fertiliser to help maintain soil fertility while minimising the use of chemical fertilisers.
To protect consumers from rising commodity prices, the government imposed suggested retail prices (SRPs) on several food items, including processed milk, beef and poultry meat, pork, canned fish and sugar, soy sauce, bread and noodles. A purchase limit of 1 kg of white or washed sugar per consumer per day was implemented temporarily. SRPs had previously been implemented during the COVID-19 pandemic in 2020-21 to avoid a sharp rise in the prices of basic food items.
Another response to high food prices was promoting urban gardening. The DA signed a Memorandum of Agreement with local government units, non-government organisations, private companies and universities to intensify the National Urban and Peri-urban Agriculture Programme. The programme provided starter kits including seeds and fertiliser, technical assistance and agricultural training to 4 580 households and communities (DA, 2021[9]).
In March 2022, the DA launched the Fuel Discount for Farmers and Fisherfolk, created through the General Appropriations Act of 2022 with a budget of PHP 500 million (USD 9 million), to mitigate the impacts of the rising price of fuel. This measure provided fuel discount vouchers of PHP 3 000 (USD 55) to eligible farmers and fisherfolk for the purchase of gasoline or diesel from a Department of Energy designated fuel station.
Domestic policy responses to the COVID-19 pandemic
In 2022, while pandemic restrictions were eased, the DA continued to intervene to ensure adequate, accessible, and affordable food to Filipino households, particularly in Metro Manila and other major centres. In addition to the network of government stores (KADIWA ni Ani at Kita) which sells basic food items supplied by small producers to Metro Manila residents at regulated prices, the DA Agribusiness and Marketing also launched eKadiwa, an ecommerce website linking producers to consumers across the Metro Manila area. In 2022, new direct marketing platforms were established, including physical food terminals (Kadiwa Retail Selling), mobile markets (Kadiwa on-wheels) and transportation and distribution networks (Kadiwa express), and the eKadiwa online marketing platform was further developed.
In 2021-22, to help children and students during the pandemic, the government earmarked PHP 3.7 billion (USD 68 million) for its national feeding programmes. These include the School-based Feeding Programme (implemented by the Department of Education), the Supplemental Feeding Programme for children in day care (Department of Social Welfare and Development in co-ordination with local government units) and the Milk Feeding Programme (DA in co-ordination with the National Dairy Authority and the Philippine Carabao Center). In total, these programmes benefitted more than 3.1 million students. National feeding programmes seek to address under-nutrition and nutrient-deficiency among children in public day care, kindergarten, and elementary schools. During school closures until August 2022, nutritious food and milk packs were distributed directly at homes or scheduled via a pick-up system. Local dairy farmers and co-operatives supplied 80% of the target milk volume required by the Milk Feeding Programme for 2022. Around 60% of the domestic fresh milk production goes to this programme, which remains a growth driver for the Philippines’ dairy production (USDA, 2022[10]).
Trade policy developments in 2022-23
In 2022, the DA issued several temporary import bans on the importation of domestic and wild birds and their products, including poultry meat and eggs. The bans were imposed for veterinary and phytosanitary reasons, mostly in response to outbreaks of highly pathogenic avian influenza (HPAI). Thus, imports of live birds, poultry and eggs were prohibited for several months from Croatia, Spain, Burkina Faso, Moldova, Canada (Nova Scotia), and from the United States (Missouri, South Dakota, North Dakota, Minnesota, and Iowa). Imports of live birds, poultry and eggs have been allowed back into the Philippines starting in June from Belgium, the Czech Republic, and Denmark, in August from Japan, and in September from Hungary. The Philippines lifted the restriction on the importation of live cattle, meat and meat products from Canada and Germany in January and from the United Kingdom in March. A ban on the importation of domestic and wild pigs and their products originating from Italy and Thailand was put in place in January 2022.
The Regional Comprehensive Economic Partnership (RCEP) was ratified by the Senate in February 2023, Once the RCEP enters into force, 75% of the country’s 1 718 agricultural tariffs will be set to zero and a further 15% of agricultural tariffs will be reduced. Some agricultural products including rice, sugar, swine and poultry meat will remain excluded from tariff reductions.
The Philippines, which has benefited for a long time from the United States’ tariff rate quotas system for its sugar exports, has not been able to export sugar to the United States since the previous crop year 2021-22. The Sugar Regulatory Administration (SRA), which oversees Philippine sugar policy, trade, and domestic prices, allocates the sugar output before each crop year depending on its destined market: sugar allocation classification A for the US market, B for the domestic market, D for the world market and C as a reserve that could be classified later on according to the needs of the country. These allocations are updated as the season progresses. The SRA recommended that all raw sugar be allocated to the domestic market in the current crop year 2022-23 as the country experimented a sugar shortage partly due to the impacts of typhoons in production areas and the high cost of fertilisers. To address the supply gap, in September 2022 the president in his role as Secretary of Agriculture and the SRA authorised the import of 150 000 metric tonnes of refined sugar. Half of the sugar imported will be for industrial use and half will be for domestic consumption.
Trade policy responses to Russia’s war of aggression in Ukraine
Lower MFN tariff rate for rice (Executive Order 171, series of 2022) to 35 % were extended until the end of 2022, the same level as rice from ASEAN member countries. The usual in-quota tariff rate is 40% and the out-of-quota rate is 50%. The temporary liberalisation of the rice market was originally taken to boost supply and the diversity of rice suppliers during the pandemic and to reduce the impact of climate change on food security. The extension is intended to mitigate the impact of Russia’s war of aggression against Ukraine on the rising domestic price of rice and on supply shortages. (USDA, 2022[11]).
The temporary tariff rate on imported pig meat (15% in-quota; 25% out-of-quota) that were reduced to address rising pork prices due to African Swine Fever, were also extended until the end of 2022 to cushion the impact of supply constraints caused by Russia’s invasion of Ukraine. The Minimum Access Volume (the TRQ) that was temporarily increased in 2021 to 254 000 metric tonnes is now back at its normal level of 54 000 metric tonnes (February 2022 to January 2023) (USDA, 2022[12]). To facilitate the import of maize, an important feed component for poultry and pigs, the government lowered in-quota tariffs on maize imports to 5% (from 35%) and out-of-quota imports to 15% (from 50%) until the end of 2022. Reduced tariff rates for mechanically deboned or mechanically separated poultry (from 40% to 5%) and frozen whole turkey (from 40% to 20%) implemented in June 2019, remained in place until 31 December 2022.
The Philippines is a mid-size country in terms of land area, but its population of 114 million makes it the world’s 12th most populous country. Just under half, 48%, of Filipinos live in urban areas. With a median age of 24 years, the Philippines has a comparatively young population. At USD 8 893 in purchasing power parity (PPP), GDP per capita accounts for less than 40% of the average GDP per capita of all countries analysed in this report (Table 23.3). Overall, the Philippines’ economy is well integrated into international markets as measured by a ratio of trade to GDP of 25% in 2021.
Agriculture remains an important sector for the Philippines, but the sector’s 24% share in total employment compared to its 10% contribution to GDP highlights a significant gap in labour productivity. Farms tend to be small in size, with an average landholding of just 1.3 hectares.
Since 2012, the Philippines has achieved a relatively stable GDP growth of around 6% annually and enjoys comparatively low levels of unemployment that had been falling since 2015 to approach 2% in 2019 (Figure 23.5). However, due to the COVID-19 pandemic, the economy contracted by around 10% in 2020 and unemployment levels increased. In 2021, the Philippines’ GDP growth rate rebounded to 5.7 %, close to pre-pandemic levels. Inflation has been fluctuating, after lower rates in 2019 and 2020 inflation rose to 4% in 2021.
The Philippines has been a consistent and increasing net agro-food importer since 2000 but agro-food exports have been growing over the last two decades (Figure 23.6). While agro-food exports plateaued since 2017, agro-food imports have continued to increase at a higher rate during this period. The significant increase in agro-food imports since 2020 has been driven notably by stronger imports of grains (wheat and rice), oilcake, meat and palm oil. Processed products for final consumption dominate the Philippines’ agro-food imports representing 41% of the total in 2021. In turn, processed products for the industry (mainly crude coconut oil) is an important export category, accounting for 34% of agro-food export, followed by primary products for final consumption (mainly fruit such as bananas or pineapple).
Agricultural production increased in the Philippines by only 0.5% per year on average from 2011-20, well below the world average (Figure 23.7). This was due to declining primary factor use (-0.5% per year) and a low total factor productivity growth (+0.4% per year). The contribution of intermediate input growth (0.6%) to agricultural output growth is above the world average.
Agriculture remains the most important user of water, accounting for 79% of total water consumption in 2021. However the sector’s share in total energy abstractions remains low (0.8%). The country's nitrogen and phosphorous balances have increased and are comparatively high.
References
[8] Climate Change Commission (CCC) (2010), National Framework Strategy on Climate Change 2010-2022, Office of the President of the Philippines, Climate Change Commission, Manila, Philippines.
[9] DA (2021), Department of Agriculture 2021 Annual report, https://www.da.gov.ph/media-resources/da-annual-reports/.
[7] Department of Agriculture (2022), Climate-Resilient Agriculture in the Philippines, https://amia.da.gov.ph/wp-content/uploads/2018/08/CRA_Profile_Philippines.pdf.
[4] Department of Agriculture (DA) (2022), Information provided to the OECD Secretariat by the Philippines Department of Agriculture.
[5] IFHV (2022), World Risk Report, Institute for International Law of Peace and Armed Conflicts, https://reliefweb.int/report/world/worldriskreport-2022-focus-digitalization.
[1] OECD (2017), Agricultural Policies in the Philippines, OECD Food and Agricultural Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264269088-en.
[6] The World Bank Group (2022), Philippines - Country climate and development report, https://www.worldbank.org/en/country/philippines/publication/philippines-country-climate-and-development-report.
[3] UNFCCC (2021), Republic of the Philippines, National Determined Contribution, Communicated to the UNFCCC on 15 April 2021, https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Philippines%20First/Philippines%20-%20NDC.pdf.
[10] USDA (2022), Philippines: Dairy and Products Annual, https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Dairy%20and%20Products%20Annual_Manila_Philippines_RP2022-0057.pdf.
[11] USDA (2022), Philippines: Grain and Feed Update, https://www.fas.usda.gov/data/philippines-grain-and-feed-update-19.
[12] USDA (2022), Philippines: Livestock and Poultry Update, https://www.fas.usda.gov/data/philippines-livestock-and-poultry-update-4.
[2] USTA (2022), Philippines - Country Commercial Guide, https://www.trade.gov/country-commercial-guides/philippines-trade-barriers.
Note
← 1. Unconditional refers to policies and measures which can be undertaken using nationally mobilised resources. Conditional refers to policies and measures which require support or the means of implementation under the Paris Agreement.