Rise of middle class fuels growth in US agri exports
The United States anticipates a hike in agricultural exports to the Philippines this year amid several sectors’ expansion and the middle class slowly becoming a force in the economy.
“In 2025, US agricultural exports are expected to benefit from robust growth in the food service sector, driven by rising disposable incomes and a burgeoning middle class,” the United States Department of Agriculture’s (USDA) Foreign Agricultural Service said in a report.
It forecasts steady growth in the retail and food manufacturing sectors, thus making “high-quality products” in demand.
In addition, the US also sees an opportunity to boost its farm exports to the Philippines, the second-fastest growing economy in Southeast Asia and a key destination for its agricultural products, because of the government’s efforts to tame food price inflation and lower retail prices of food items.
Executive Order No. 62, signed by President Marcos in June last year, lowered the import duty on rice and extended the tariff reduction schedule on corn, meat and mechanically deboned meat until 2028.
The Department of Agriculture would also be reinstating a maximum suggested retail price for imported pork by the end of July or early August, after suspending it earlier at the request of industry stakeholders to find a more effective strategy to stabilize retail prices.
The foreign agency said the US government was working with Philippine counterparts to reduce sanitary and phytosanitary barriers and resolve import licensing issues to facilitate trade.
It was also closely monitoring an administrative order issued by the Department of Finance mandating preshipment inspection and cross-border electronic invoicing for various products.
“If implemented, the measure will increase the administrative burden on exporters,” the USDA noted.
US agricultural exports to the Philippines totaled $3.5 billion in 2024, a 3-percent drop from $3.6 billion a year prior, according to the USDA. America’s farm exports to Manila averaged $3.58 billion between 2020 and 2024.
A 20-percent decline in the prices of soybean meal, the largest US export product, slashed outbound farm shipments to the archipelago.
Ethanol (nonbeverage) exports reached $147 million, surpassing imports by $77 million or 111 percent, fueled by the continued rapid growth in Philippine gasoline sales and competitive pricing compared to Brazil, the US’ main foreign competitor.
Beef, pork and poultry and their products climbed by 58 percent, 10 percent and 8 percent, respectively.
“Population growth and income growth increased demand for protein products. Additionally, a resurgence of African swine fever adversely impacted domestic swine production,” the report said.
Meanwhile, exports of other US agricultural commodities dropped: feeds, meals and fodders (15 percent); processed vegetables (4 percent); wheat (2 percent) and dairy products (2 percent).
