Agriculture in the Philippines

THE PHILIPPINES, ONE OF THE LARGEST island-groups in the world with 7,100 islands and islets, is strategically located within the area of nations that sweeps southeast from Mainland Asia across the equator to Australia.

Its boundaries are formed by three large bodies of water: on the west and north by the South China Sea; on the east by the Pacific Ocean; and on the south by the Celebes Sea and coastal waters of Borneo. The total land area of the Philippines is 300 thousand square kilometers or 30 million hectares. It constitutes two percent of the total land area of the world and ranks 57th among the 146 countries of the world in terms of physical size.

The Philippines advocates the archipelago doctrine, as such it gains exclusive to all resources living or non-living in and at the bottom of an area of about 276,000 square nautical miles.

The Philippines is divided into three major island groups: Luzon, with an area of 141 thousand square kilometers;  Mindanao, with an area of 102 thousand square kilometers; and Visayas, with an area of 57 thousand square kilometers.

 Climate Map of the Philippines

Based on the seasonal rainfall distribution, the climate of the Philippines is classified as follows:

  •  Type I: Two pronounced seasons with maximum rain period from June to September and a dry season which lasts from three to six or seven months?
  • Type II: No dry season with a very pronounced maximum rain period from December to February.
  • Type III: No pronounced maximum rain period with a short dry season lasting only from one to three months.
  • Type IV: Rainfall more or less evenly distributed throughout the year.

The tropical cyclone season in the country is from June to December, with the months from July to September having the most frequent occurrence of more than 3 cyclones each month. Annual relative humidity ranges from 75 to 86 percent and annual mean temperature is between 19.20 and 28.20 °C while annual rainfall ranges from 914 to 4,358 millimeters.

 Land Area

The Philippines is an agricultural country with a land area of 30 million hectares, 47% of which is agricultural land. In the Philippines, prime agricultural lands are located around the main urban and high population density areas.

Land resources in the country are generally classified into forest lands and alienable and disposable lands. A total of 15.8 million hectares were classified into forest lands, and 14.2 million hectares are alienable and disposable lands. Out of the 14.2 million hectares alienable and disposable lands, 93% or 13 million hectares are classified as agricultural lands.

 Land Distribution

The total area devoted to agricultural crops is 13 million hectares. This is distributed among food grains, food crops and non-food crops. Food grains occupied 31% (4.01 million hectares), food crops utilized 52% (8.33 million hectares) while 17% (2.2 million hectares) were used for non-food crops.

For food grains, the average area utilized by corn was 3.34 million while rice occupied 3.31 million hectares. Of the total area under food crops, coconut accounted for the biggest average harvest area of 4.25 million hectares. Sugarcane with 673 thousand hectares; Industrial crops with 591 thousand hectares; 148 thousand hectares for fruits; 270 thousand hectares for vegetables and rootcrops; 404 thousand hectares for pasture and 133 hectares for cutflower.

According to land capability, 78.31% of the alienable and disposable land are prime agricultural areas, 6.1 million hectares are highly suitable for cultivation.

 Farm System/Structure

Philippine agriculture is characterized by a mixture of small, medium and large farms. Majority of the farms in the country are all small farms averaging about 2 hectares. These are simple farms which are owned and managed by single families ranging from subsistence to commercial production.

Farming is generally undertaken on small farms. Two-thirds of all farms in 1988 were no larger than three hectares. Eighty-five percent of all farms were no more than five hectares. Over a period of ten years ending in 1996, the proportion of small farms had been expanding. The Philippine Agrarian Reform Council Secretariat reported that the government had acquired and distributed about 4.1 million hectares of agricultural lands to agrarian reform beneficiaries. Under this Program implementing the comprehensive agrarian reform law, a farm household cannot own a farm larger than five hectares. A typical farming system consists of a major crops, with rice, corn and coconut as common base crops, and a few heads of livestock and poultry.

Rice, corn, coconut and many crops are principally produced by small farms. Prior to CARP, there were large plantations in rubber, coffee, oil palm, cacao, banana, pineapple, etc. Contract growing schemes operate in corn seeds, banana, tomato, cucumber, oil palm, asparagus and broiler chicken.

 Agriculture in the Economy

Philippine agriculture plays a vital role in the economy. This attaches the high priority of transforming agriculture into a modern, dynamic and competitive sector. A sustained expansion of the national economy requires sustained growth in the agricultural sector.

Agriculture including forestry and fishery, plays a dominant role in the Philippine economy. The country’s population is predominantly rural (70 percent of the total) and two-thirds of this population depends on farming for their livelihood. In terms of employment, about one-half of the labor force is engaged in agricultural activities.

Primarily, Philippine agriculture consisted of rice, corn, coconut, sugar, banana, livestock, poultry, other crops and fishery production activities.

The sector’s contribution to the economy has been substantial 23% of gross domestic product in 1995. It registered a growth rate of 3.2%. The growth was mainly due to the expansion of the poultry, livestock, and parlay subsectors.

 General Performance of Agriculture

Over the past six decades, the agricultural sector was confronted by both internal and external bottlenecks that constrained its performance and growth. Despite the sector’s desire to implement reforms to increase productivity, efficiency, competitiveness, market adaptability, and sustainability of agri-based industries, these reforms were hampered by inadequate resources, limited implementing capabilities of national and local government units ( LGUs), and weak coordination among implementing agencies. In addition, the occasional occurrences of natural disasters (e.g., El Niño phenomenon and La Niña phenomena) and international market crisis (e.g., 1997 financial crisis) exacerbated the real growth of the sector, resulting to contraction in output as observed in 1998.

From 1993 to 2004, agriculture, fisheries, and forestry hardly grew on the average by 2.6% ( Fig. 1). Real growth in agriculture of 1% in the Philippines from 1980 to 1990 lagged behind the world average and middle-income country average of 2.8% and 3.5%, respectively. Neighboring Asian countries such as China, Vietnam, and Thailand posted very high growth rates during the period. From 1990 to1997, the Philippines improved its real agricultural growth rate to 1.9%, but this is still considerably lower than middle-income countries in Asia. However, during the 1998-2003 period, Philippine agricultural growth was comparable to Thailand and Vietnam.

 GATT-WTO Ratification

In December 1994, the Philippine Congress ratified the Philippine accession to the Uruguay Round General Agreement on Tariff and Trade under the World Trade Organization ( GATT-WTO). Specifically, under the GATT-WTO, and other external agreements congruent to WTO, the Philippines was committed to the following:

  •  Removal of Quantitative Restrictions ( QRs) and Conversion of QRs into their Tariff Equivalents.
  • Reduction of Tariffs on Agricultural Products. Developing countries to reduce average tariffs by 24% with a minimum 10% cut per tariff lines from 1995 to 2004.
  • Reduction of Production Subsidies. For developing countries, reduction of trade distorting domestic subsidies by 13% from 1995 to 2004. However, under the “de minimis” principle of the agreement, no reductions are required if the domestic support is no more than 10%.
  • Minimum Access Volume ( MAV). The allowing of annual imports at a lower tariff of volumes equivalent to 3% of 1986-1988 consumption for 1995, increasing to 5% of 1986-1988 consumption by 2004.
  • Tariff Bindings. Countries will bind tariff rates at levels beyond which no further increases will be imposed.
  • Prohibition of Additional Non-Tariff Measures. No new non-tariff measures, such as import licensing, variable import levies, import quotas, and import bans may be imposed.
  • Plant Variety Registration and Protection. Intervention and ownership of biological products such as plant and microorganisms should be protected under patent or the sui generis system or both.

To cushion the impact of trade reforms under GATT-WTO, the Philippine government committed safety net measures to neutralize temporary adjustments and dislocations in the sector and to enhance farmer’s competitiveness. Some of these internal commitments of the Philippine Government include:

  •  Tariff Reduction on Inputs. For those inputs directly used for agricultural modernization, the tariff rates were reduced to zero.
  • Trade Remedies. These are measures that provide industries relief from import surges, declining import prices and/or dumping.
  • Reforms in the VAT for Agricultural Processors. Exemptions from the value-added tax ( VAT) of food and non-food agricultural products and marine commodities.
  • Budgetary Support in Agriculture. Under the Uruguay Action Plan of DA, the budget support for agriculture from 1995 to1998 was estimated at P72.9B. Fifty-eight percent of this should have come from DA-GAA and the rest from DAR, DPWH-GAA, Asset Privatization Thrust ( APT), Minimum Access Proceeds, Savings and Reserves.

 Global Competitiveness of Agricultural Products

A recent study which covered majority of the strategic agricultural commodities of the Philippines indicated that most agricultural products are globally competitive as import substitutes. Among its crop commodities, coconut oil, palm oil, cavendish banana, banana chips, coffee beans, mango, pineapple, durian and mangosteen, onion (seasonal), abaca, cacao, and rubber are export-competitive crops. Except raw sugar and garlic, other crops (rice, yellow corn, potato, cassava, vegetables, tomato and cutflowers are competitive as import substitutes. The competitiveness factor include, among others, productivity, border prices, costs of production, quality, and volumes, especially for exports.

For livestock and poultry products, processed meats for pork and chicken have export potentials. Dairy has no competitiveness both as import substitute and as export, while most of the products are competitive as import substitutes in fresh meat form. A major competitiveness factor for swine and beef export is the quality (i.e., the Philippines is not an FMD-free zone and thus will have difficulty in being accepted as suppliers of these meat products). High feed costs, due in part to the high cost of producing domestic corn, are major concerns among livestock and poultry growers.

For fisheries products, carageenan, seaweeds, prawns, tuna, and deboned milkfish are export winners. Likewise, tilapia is also emerging as competitive product in the export market. The major competitiveness factors include productivity, high feed costs, distance on international waters, and pest and diseases.


The performance of Philippine agriculture relative to its Asian counterparts in the 1980s was low due in part to external and internal bottlenecks. However, during the 2000s, the growth of the sector was at par with most of the agricultural economies of Asia.

Although Philippines is basically a small hold agriculture, Philippine exports in banana, pineapple, and papaya are international benchmarks in global trade. The sector has also competitive advantage in the export of fishery products, banana chips, coconut oil, sugar, and abaca.

A most notable development in the agriculture sector over the past 15 years was its sectoral transformation into agro-industrial services. From 1990 to 2003, the GDP share of agriculture dropped from 21 to 14%, while services increased from 43 to 53%, and industry from 32 to 34%, respectively. The 14% GDP share of Philippine agriculture in 2003 pales in comparison with Malaysia and Thailand of 9% each, and South Korea at 4%.

It is envisioned, however, that enhancing agro-industrial development will further accelerate Philippine agriculture’s sectoral transformation.

Sources: Department of Agriculture (DA), Philippines  and Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD), Department of Science and Technology (DOST)

Source and Photo: Food & Fertilizer Technology Center
You also follow Labex Korea by Twitter and Facebook

4 responses to “Agriculture in the Philippines

  1. thanks for the article. it really helped me a lot.

  2. I regard something truly interesting about your weblog so I saved to favorites .

  3. This blog has inspired me to carry on working on my own blog

  4. i like reading this article…thanks.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s