THE shortfall in domestic rice production could grow to 6.1 million metric tons (MMT) by 2028/29 due to unfavorable weather in the face of growing demand, putting the Philippines at the mercy of volatile international grain markets, Fitch Solutions BMI reported.
The Philippines is facing a “growing production deficit,” estimated at 3.5 MMT in 2024/25 before expanding further to 6.1 million MT by 2028. It 2014/15, the shortfall had been 1.4 MMT, it said on Thursday.
BMI said “structural challenges” faced by the Philippines include limited availability of arable land, exposure to typhoons and the growing population, making it difficult to achieve self-sufficiency in grains.
Self-sufficiency in rice has decreased “significantly” over the past decade, to 69.7% in 2024/25 from 91.6% in 2014/15, BMI said.
“This is due to limited growth in production combined with strong growth in consumption,” it noted.
BMI said it estimates the five-year average annual growth rate in the period ending 2024/25 at 3.6% for rice consumption and 0.2% for production.
“Through our forecast period between 2025/26 and 2028/29, we expect the average annual growth rate for production to be 2.0%. For consumption we expect this to be 2.5%,” it added.
The Philippines has lowered tariffs and declared an emergency that triggers the release of state rice stocks in response to elevated rice prices.
Philippine inflation eased to 2.1% in February from 2.9% in January as rice inflation dropped to 4.9%, the sharpest decline since April 2020.
Rice growers are currently facing low farmgate prices as traders opt to deal in imported rice. The farmgate price was P15-16 per kilo for freshly harvested grain, according to industry reports last week.
The report also noted that labor productivity in the Philippines is low compared to Thailand and Vietnam due to “manual transplanting being more common and lower levels of mechanization.”
It noted that rice yields in the Philippines are lower than those in Vietnam but are very close to those in the largest exporter, India, and higher than those in Thailand.
BMI said it’s a “significant concern” that the Philippines is now the largest importer of rice globally, accounting for 9.7% of global rice imports in 2024/25 based on US Department of Agriculture forecasts, given that 19.5% of the population had insufficient food consumption as of September 2024.
“We also highlight that the Philippines relies entirely on imports for wheat, a further risk for food security,” it flagged.
BMI said demographic trends will result in continued strong demand for rice in the medium to long term, noting that spending on rice will grow at a faster rate than food spending overall in 2029. — Kyle Aristophere T. Atienza