Rising costs and water stress weigh on Philippines rice output

Milled rice production in the Philippines for the MY 2026/27 is under pressure due to rising input costs, low reservoir water levels, and weak planting intentions, according to the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture.

The FAS slightly lowered its milled rice forecast by 0.8% from its previous estimate to 12.3 million tonnes. However, if realized, production would still be about 100,000 tonnes higher than in 2025/26.

A key constraint is the sharp increase in fertilizer prices. Urea prices surged by more than 55% in June compared with the same month in 2025, significantly reducing farmer profitability and limiting incentives to expand planted area. In addition, significantly reduced water levels in major dam reservoirs are creating further risks for lowland rice production.

The FAS also warned that weather-related risks linked to El Niño could lead to additional downward revisions. The Philippine Department of Agriculture estimates that a severe El Niño event could cut rice output by 700,000 tonnes, despite ongoing government support programs such as fuel subsidies and partial input assistance, which farmers say only partially offset higher costs.

To compensate for weaker domestic supply, rice imports are forecast to rise to 5.2 million tonnes, while ending stocks are expected to fall to 2.65 million tonnes. Rice consumption is projected to remain stable at 17.6 million tonnes, as it continues to be the country’s main staple food. Corn production is also expected to decline, further reinforcing import demand for grains in the Philippines.