Closing the country’s agricultural trade gap

The country’s expenditures for agricultural imports were more than double its exports in 2021, based on an annual report published by the Philippine Statistics Authority (PSA) in September 2022. Of the farm goods imported by the country in 2021, rice topped the list, accounting for 7.3 percent of the import bill. The report noted that imports of rice at 2.98 million metric tons increased annually by 33.7 percent and its corresponding value of P56.17 billion expanded at an annual rate of 28.9 percent.

Other top contributors to agricultural imports in 2021 were rubber, mongo, onion and garlic. The country’s purchases of rubber reached P5.33 billion and were 72 percent higher year-on-year in terms of value. Imports of mongo, which Filipinos usually consume on Fridays when Catholics usually abstain from meat, jumped by 20 percent in terms of volume. The country shelled out P2.22 billion just to buy mongo from other countries, a figure that is nearly a quarter higher than the level registered in 2020.

From 2017 to 2021, the PSA report, titled “Agricultural Indicators System: Agricultural Exports and Imports,” indicated that the country’s food imports have been rising, except in 2020, when the Covid-19 pandemic struck and limited mobility. In 2017, the Philippines’s food import bill reached P554.31 billion. The import bill jumped to P700.73 billion in 2021 as the Philippine economy started to reopen and demand for food items rose.

In contrast, the value of the country’s farm exports did not even breach the P400-billion mark during the five-year period. Receipts from agricutural exports recorded from 2017 to 2021 were as follows: P331.60 billion, P322.15 billion, P345.76 billion, P307.63 billion, and P334.24 billion. During the period, banana, pineapple and rubber were the country’s top agricultural exports, with banana taking the lion’s share of total receipts.

It is clear from the PSA data that the Philippines has retained its status as a net food importing country. Significantly reducing food imports while increasing exports exponentially would require major changes in the Philippines’s food production and trade strategy. Simple tweaks will not suffice, as it is evident from the PSA data that there have been no major changes in the country’s export lineup.

The Philippines paid P3.344 trillion for goods produced by farmers and food producers from other countries in 2017 to 2021. This is more than double the P1.631 trillion obtained by Filipino farmers and food producers from foreign buyers of local agricultural products during the period. What’s worrisome is that receipts from farm exports could go down in the coming years as the country’s top competitors for certain items like banana are increasing their market share in areas where the Philippines used to dominate (See,

“PHL loses No. 2 spot for banana exporters,” Businessmirror, January 26, 2023).

It would do well for our policymakers to keep this in mind as they set out to find the right strategies that will increase the incomes of farmers and fishers. These strategies should include focus on research and development and innovation if the government is keen on closing the agricultural trade gap.