Philippine MY 2025-26 rice output seen falling on El Niño, higher input costs

The Philippines' rice production is expected to decline in marketing year 2025-26 (July June) as farmers grapple with elevated fuel and fertilizer prices, compounded by the impact of El Niño, multiple sources told Platts, part of S&P Global Energy, April 24.

With domestic production under pressure, market participants expect the Philippines to increase rice imports to offset the supply shortfall and maintain adequate buffer stocks.

The Philippines' milled rice production is expected to fall to 12.2 million metric tons in marketing year 2025-26, the lowest level since MY 2019-20, when output stood at 11.93 million mt, according to S&P Global Energy CERA. USDA data similarly projects production at 12.3 million mt for MY 2025-26, the lowest level in six years.

"In the first quarter of 2026, harvested area declined significantly, partly due to farmers' reduced interest in planting rice amid the low farm gate price in the previous planting season," Leocadio Sebastian, former agriculture undersecretary for the Philippine Department of Agriculture, told Platts April 24. "Projected increases in fuel and fertilizer costs, as well as the impact of El Niño, could affect the 2026 rice cropping season."

El Niño is typically associated with below-average rainfall in Southeast Asia, leading to drier conditions that can reduce irrigation and lower crop yields.

Sebastian noted that although the high cost of fertilizer and fuel did not affect crops already harvested in the first quarter or those about to be harvested, "the impact is greater on the newly planted and those to be planted in the coming months."

He added that the Department of Agriculture is mitigating this impact through fertilizer subsidies and the scaling up of alternative fertilizers, such as biofertilizers.

Wet season crop under pressure

"The Philippines has two rice crops; the dry season accounts for about 45% of output and appears stable, but the wet season crop, which makes up 55%, could decline by 20% to as much as 50% compared with the annual average," a Ho Chi Minh City-based exporter said.

"Higher diesel and fertilizer costs, along with El Niño, are the main factors," the exporter said, adding that in El Niño years, stronger typhoons typically disrupt the wet season crop.

The Philippines produces two rice crops annually, with the wet season crop, harvested between September and December, accounting for the larger share of output.

A Philippines-based buyer said that local rice production is generally inefficient, as farming is largely carried out by individual farmers rather than through coordinated or large-scale systems. The source added that without sufficient government support, production is likely to decline further.

The source also said that fertilizer price increases are contributing to the expected decline in rice output.

Imports expected to rise

The Ho Chi Minh City-based exporter said Philippine rice imports are likely to rise this year to offset the production shortfall.

A Ho Chi Minh City-based trader echoed this view, saying the decline in Philippine rice production is primarily driven by fuel-related issues that have posed significant challenges for the country.

"I think the imported quantity will be higher to recover the shortage of local supply," the trader said.

The Philippines' rice imports are projected at 5.5 million mt for MY 2025-26, up 51% year over year, according to USDA data. However, S&P Global Energy CERA projects imports of 3.5 million mt for MY 2025-26, down 35% year over year.

However, Sebastian cautioned that "USDA estimates are usually high," adding that "the Department of Agriculture is expected to manage imports as it did last year to avoid dampening paddy rice farm-gate prices in the coming cropping season."

In 2025, the Philippines imposed a series of import restrictions, including a temporary suspension from September through early 2026, followed by limited monthly import windows to balance supply needs and support domestic farmers during peak harvest periods.

Platts assessed Vietnam Fragrant 5% rice, the most exported rice variety to the Philippines at $481/mt FOB April 23, up $75/mt month over month.

Vietnam remained the Philippines' largest rice supplier in 2025, exporting 3.2 million mt, down 24% year over year, according to Vietnam Customs data.