The average cost to produce palay (unmilled rice) in the Philippines last year showed improvement over previous years, but industry observers expect this trend to reverse in 2026, according to a report by BusinessWorld.
The anticipated rise in production costs is attributed to the lingering effects of El Niño, which can reduce yields and increase irrigation expenses, coupled with persistently high prices for fuel and fertilizers. These factors are expected to pressure farmers' margins and potentially lead to higher retail rice prices.
The Department of Agriculture and other stakeholders are monitoring the situation, though no specific intervention has been announced yet. The outlook underscores the vulnerability of the Philippine rice sector to external shocks and the need for sustained support to stabilize production costs.