Philippines to increase dairy imports in 2027 amid limited domestic production

The Philippines is expected to increase imports of major dairy products in 2027 amid rising domestic consumption and limited local production capacity. According to USDA forecasts, the country will continue expanding purchases of milk powder, ready-to-consume dairy products and cheese. Meanwhile, domestic production meets less than 2% of the Philippines’ total dairy requirements, leaving the country heavily dependent on foreign suppliers.

Imports of skim milk powder (SMP) are forecast at 185 thsd tons in 2027, up 2% from the estimated 181 thsd tons in 2026. SMP accounts for around 40% of total dairy imports and is widely used in the production of condensed milk, ice cream, infant formula and other food products. Meanwhile, whole milk powder (WMP) imports are expected to remain at 15 thsd tons due to elevated prices. Processors may increasingly use SMP as a more affordable alternative, reserving WMP for products requiring a higher fat content.

Imports of fluid and ready-to-drink milk could increase by 3% in 2027 to 171 thsd tons, compared with 166 thsd tons a year earlier. Growth will be supported by higher household consumption and the government’s milk feeding program for children. Meanwhile, domestic fluid milk production is forecast at 48 thsd tons, up 4.3% from 2026. The increase is expected to be driven by expanding dairy herds among both small-scale and large-scale producers.

USDA also forecasts a 5% increase in cheese imports to 63 thsd tons in 2027. Domestic cheese consumption could reach 64 thsd tons, also rising by 5% year over year. The main driver is growing demand among middle- and high-income urban consumers. According to the cited estimates, 82% of consumers in this category eat cheese at least once a week.

Despite the expected increase in purchases, import growth will be constrained by high production and transportation costs, particularly rising fuel prices. A stronger US dollar against the Philippine peso is also putting additional pressure on importers by increasing the cost of dairy products purchased abroad. USDA also identifies weather conditions associated with El Niño as a potential risk to dairy production in exporting countries.

Tags: Philippines, dairy products