The Philippines’ agri-food industry, a key driver of the economy, is facing growing challenges from global trade tensions, rising tariffs, and climate change, a new report warns. Experts are urging government support to strengthen the sector’s resilience and competitiveness.
“The Economic Impact of the Agri-Food Sector in the Philippines,” released Thursday in Makati by Oxford Economics, the ASEAN Food and Beverage Alliance, and Food Industry Asia, highlights the sector’s contribution to the economy and calls on policymakers to support local producers and exporters to ensure food security.
“Our latest research shows the scale and importance of the sector. Overall, the sector contributed $164.6 billion to the economy, around one-third of national GDP, and supported 18.8 million jobs, representing 38 percent of total employment,” the report said.
Escalating tariffs
The report warns that climate risks, trade tensions, and US tariffs on Philippine agri-food exports are raising costs and uncertainty. “Escalating tariffs could, in a worst-case scenario, leave global GDP 2.3 percent below baseline over five years, and volatility in global commodity prices could drive inflationary pressures in the net food-importing economy,” it added.
James Lambert, director at Oxford Economics, said Philippine agri-businesses are likely to feel the impact of higher US tariffs, which could reduce US imports of Philippine agri-food products by about 25 percent.
Food price inflation another concern
Food price inflation is another concern. “The Philippines’ net importer status and vulnerability to climate change shocks compound the pressures on local food prices,” Lambert said. The country is also the most vulnerable among selected ASEAN nations to rising temperatures and extreme weather events.
The report stresses that the sector can turn these challenges into opportunities through trade diversification and improved competitiveness.