By John Reidy

MANILLA, PHILIPPINES — Rising input costs, lower dam water levels and weak planting intentions in the Philippines are taking their toll on the 2026-27 forecast for milled rice production, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

The FAS lowered its milled rice outlook for the current marketing year 0.8% from its earlier report to 12.3 million tonnes, though, if realized, that would still be 100,000 tonnes more than 2025-26.

Fertilizer prices have risen sharply since March, with urea prices surging by more than 55% in June compared to the same month in 2025, reducing farmer profitability and limiting the incentive to expand planted area, the FAS said in its most recent update.

Significantly reduced water levels in key dam reservoirs as of June pose additional risk to production in key lowland areas. The FAS said additional revisions may be forthcoming as the effects of El Niño weather conditions continue to materialize in coming months.

“The Philippine Department of Agriculture (DA) has projected a 700,000-tonnes decrease in rice output in the event of a severe El Niño,” the FAS said. “While the Philippine DA continues to provide fuel subsidies and partial seed and fertilizer support to farmers, farmer contacts report that these measures only partially offset the burden of elevated input costs.”

Rice consumption for 2026-27 is forecast to remain stable at 17.6 million tonnes, as population-driven demand continues to outweigh the moderating effect of rising retail prices. Rice remains the primary staple food in the Philippines.

To supplement lower domestic supply, rice imports for the Philippines are forecast to rise 800,000 tonnes, to 5.2 million tonnes. Meanwhile, ending stocks are seen falling about 150,000 tonnes, to 2.65 million.

Corn production is forecast to decline slightly to 8.1 million tonnes for 2026-27, reflecting the same cost and weather trends observed in the rice sector, the FAS said, which led to a 2.2% reduction from earlier projections.

Total consumption is seen rising 1.5% to 10.4 million tonnes with demand from the feed sector particularly poultry, aquaculture and pet food industry continuing to drive higher corn use and imports, the FAS said. Imports are seen reaching 2.3 million tonnes, up 50,000 tonnes.The Philippines does not produce wheat and is projected to import 7.2 million tonnes in 2026-27, up 2.9% from the previous FAS forecast, though down 400,000 tonnes from 2025-26.

Published Date: June 26, 2026