Philippines farm policy keeps food costs elevated, OECD urges shift in support

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Philippines farm policy keeps food costs high

Highlights

OECD report finds Philippine farmers receive policy support averaging 22% of gross farm receipts in 2023-2025, with producer prices 29% above border references.
Philippine agricultural policies raise consumers' food expenditures by about 20% at farmgate prices, despite targeted aid, due to tariffs and administered prices.
OECD recommends reducing reliance on border measures and market interventions, urging greater investment in innovation and risk-management to enhance sector resilience and competitiveness.

OECD flags price effects of current support model

As reported by BusinessWorld, citing the OECD in its Agricultural Policy Monitoring and Evaluation 2026 report, support to Philippine farmers averages 22% of gross farm receipts in 2023-2025, meaning more than a fifth of farm income comes from policy support.

The report says domestic producer prices average 29% above border reference prices over the same period, reflecting market price support for sugar, rice, maize and livestock products. It says this support mainly comes from tariffs and tariff-rate quotas, while rice farmers also benefit from government procurement at administered prices and market interventions by the National Food Authority.

The OECD says these measures are tied to longstanding food security and self-sufficiency goals, especially for rice, but they shift much of the cost of support to consumers and other first-level buyers. It estimates that Philippine agricultural policies increase consumers' food expenditures, measured at farmgate prices, by about 20% on average.

While the government provides targeted aid through school feeding initiatives, the Supplemental Feeding Program and the Walang Gutom food stamp program, the report says these benefits are outweighed by the higher prices consumers pay. Total support to Philippine agriculture stands at 2.3% of GDP in 2023-2025, down from 2.9% in 2000-2002, but it remains among the highest across the economies covered by the report.

Investment and trade reforms seen as longer-term remedy

The OECD recommends that the Philippines gradually shift rice policy toward more targeted risk-management measures instead of continuing to rely heavily on commodity-specific price support. It says recent steps, including the formalization of a palay floor price mechanism and a flexible rice tariff framework, address short-term price volatility, but could still limit diversification and affect production and trade incentives if dependence on such support persists.

The report also calls for lower reliance on border measures and administered prices for rice and sugar, alongside stronger services for the wider farm sector. Philippine spending on general agricultural services exceeds 5% of the value of agricultural production in 2023-2025, more than twice its level in 2000-2002, with spending concentrated on irrigation systems, farm-to-market roads, and agricultural knowledge and innovation services such as education and extension programs.

The OECD urges the government to prioritize investment in innovation and resilience to improve long-term sector performance and reduce dependence on recurring market intervention. It also recommends more predictable and transparent trade and sanitary measures, saying time-bound policies aligned with competitiveness, food security and climate goals would support steadier investment signals and better integration into regional and global markets.

Our earlier article on expanded Philippine access to Malaysia’s halal import market explained how another local certification body gained recognition from Malaysia’s JAKIM, widening certification options for exporters. We noted that a broader base of internationally accepted certifiers can support the Philippines’ push to grow halal-linked exports, tourism and investment by making market entry and compliance easier across multiple sectors.

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