The ability of local farmers to meet consumer demand for rice decreased last year as the country’s reliance on rice imports grew.
The share of local rice production to the total rice supply in the market may decline even further this year after the government decided to lift the limit on rice imports that enter the country.
A report by the Philippine Statistics Authority showed that the country’s rice self-sufficiency ratio in 2017 declined to 93.44 percent from 95.01 percent in 2016.
During that period, the country’s dependence on rice imports slightly went up to 6.56 percent from the 2016 level of 4.99 percent.
That level is expected to rise after President Duterte allowed the entry of more rice imports to tame soaring prices.
Unabated increases in rice prices were felt by consumers for the first 10 months of 2018, leading prices to all-time highs.
In the island-provinces of Zamboanga, Basilan, Sulu and Tawi-Tawi, rice prices reached a high of P70 a kilo.
The price spike was caused by rising global oil prices and the implementation of a new tax law that pushed production costs up. This was aggravated by the National Food Authority’s delayed distribution of cheap, subsidized rice, which caused panic among retailers and consumers.
If all government-approved imports push through this year, the country’s rice imports may reach about 2.5 million tons—the highest since 2008.
Mr. Duterte had intended to push for rice self-sufficiency within the first two years of his term, but later admitted that it would be unlikely for the country to achieve that goal.
Nonetheless, the Department of Agriculture continues to push for programs that will boost the country’s rice supply.
The agency is hoping to increase the farm sector’s average production to 6 metric tons (MT) per hectare (ha) from the current level of 4.38 MT per ha before the end of Mr. Duterte’s term, which, according to the Philippine Rice Research Institute, was enough to make the country self-sufficient in the staple.
The country’s production cost for rice is P12 a kilo. This is almost double the production cost in Vietnam at P6.50 a kilo and Thailand at P9 a kilo, where most of the rice imports come from.
According to a study made by the Philippine Institute for Development Studies, the deregulation of rice imports could reduce the country’s inflation rate by 0.4 percent and bring rice prices down by P6 a kilo.