Agriculture officials are expressing optimism that higher farmgate palay prices will translate into improved planting intentions for the next cropping cycle.
Agriculture Secretary Francisco Tiu Laurel, jr. said in a statement that the recent recovery in palay prices has helped restore confidence among farmers after a period of weak returns that had discouraged production.
“Many farmers decided not to plant last season because they were still recovering from losses when palay prices were between PHP 10 and PHP 12 per kilo,” he said.
“This harvest season, we are seeing prices improve to PHP 22 to PHP 27 per kilo, and we hope this continues so farmers are encouraged to plant more for the next season,” added the DA chief, who also noted that the improved price environment is already supporting expectations of a better dry-season harvest.
At its weakest point in 2025, palay prices fell significantly below production costs, with farmgate prices dropping to as low as around PHP 8 per kilo in some areas, while averaging only around PHP 10 to PHP 12 per kilo in many markets—forcing farmers to scale back or delay planting.
There is now likelihood that planting activity will be boosted in the coming months, which will help reverse the cautious output decisions triggered by low farmgate prices, typhoon damage, and irrigation constraints.
The agriculture department said it is complementing the price recovery with continued support measures.
The list includes fertilizer and fuel subsidies, faster distribution of inputs, and expanded financial assistance.
In addition, it is also studying a voucher system to improve access to farm inputs and encouraging the use of organic fertilizers to help reduce production costs.
The subsequent recovery in prices has also been attributed in part to supply-tightening measures, including a temporary rice import restriction between September and December ordered by president Ferdinand Marcos, Jr. that helped stabilize domestic market conditions and lift farmgate values.
However, data from the Philippine Statistics Authority saw that the first-quarter palay output declined to 4.4 million metric tons from 4.69 million metric tons a year earlier.
According to the DA, this may be due to planting decisions made during the period of weak prices and weather disturbances in key producing regions.
The DA chief then pointed out the damage irrigation system which is affecting roughly 37,000 hectares served by the National Irrigation Administration’s Upper Pampanga River Integrated Irrigation System (NIAa-UPPRIIS), which limited supply in key farming areas.
DECLINING PALAY PRICES
Meanwhile, Tiu Laurel Jr. said that the DA is also stepping up market interventions as palay prices weaken in several major producing provinces, even as the main harvest season draws close to completion.
During a consultative meeting with rice industry stakeholders last April 27, the DA noted that with about 77 percent of the national harvest already in, fresh palay prices have slipped to PHP16–PHP17 per kilo in isolated areas in Nueva Ecija, Pampanga, Isabela, and Cagayan.
However, it is not a nationwide matter, as farmgate prices in Palawan remain significantly higher at PHP23–PHP24 per kilo, which the DA said might point towards a localized price pressure rather than a “systemic collapse in the market.”
The National Food Authority, for its part, has increased its buying price for dry palay to as much as PHP30 per kilo.
The agency will also intensify procurement in areas where prices have sharply declined to help stabilize the palay market, on top of rolling out a direct purchase order system that will allow farmers to sell directly to the NFA before their actual harvest.
Stakeholders, meanwhile, flagged persistent logistical bottleneck, especially the lack of hauling trucks. This will be partly addressed by the procurement of additional 150 trucks by NFA this year, as per the DA.
On the supply side, Secretary Tiu Laurel reiterated that rice imports remain necessary but must be carefully managed to avoid further depressing local prices—noting that earlier import controls helped ensure that about 70% of the harvest was sold at favorable levels.
However, rising fertilizer costs driven by global tensions, along with El Niño risks, are raising production costs and may discourage planting in the next cycle.
In line with that, the DA is considering limiting monthly rice import volumes from June to August to balance supply and farm gate price concerns for the goal of preventing a price collapse, while ensuring adequate domestic supply.
The agency is targeting a farmgate price of PHP 22 per kilo for the September–November harvest period, which it sees as a crucial recovery window for farmers.
The DA is also pushing for expanded storage and warehouse capacity, including strategic stockpiling to secure supply up to 2027, with the current national rice inventory stands at roughly 70 days of consumption.
Tiu Laurel assured stakeholders that the Bureau of Plant Industry will tighten accreditation standards. At the same time, the government is also exploring policy options such as blending local and imported rice to help stabilize retail prices while still prioritizing domestic production, with stakeholders invited to propose blending ratios favoring local output.
“We want to strike a balance among all stakeholders in the rice value chain, including consumers, especially amid climatic and geopolitical challenges,” said Tiu Laurel.
Tensions in the Middle East had raised the cost of fertilizer and fuel for farm machineries while a new El Niño episode threaten upcoming crop harvest and livestock production.
Negotiations with spurce countries for longer-term rice supply contracts are also ongoing, while potential shipments from India were also discussed.
The DA chief underscored that the priority remains price stability without harming farmers, securing adequate supply into next year.