Making agriculture more productive and resilient
Recent global oil price increases and geopolitical tensions have again exposed the Philippines’ vulnerability as a major oil-importing country. The country imports about 95 percent of its petroleum needs and also depends on imported fertilizer, feeds, rice, and corn. As a result, rising fuel prices quickly increase food production and transport costs, contributing to food inflation.
Higher diesel prices have raised costs for farming, fishing, irrigation, fertilizer, feeds, and inter-island food transport. According to the Philippine Statistics Authority, food inflation reached 6.1 percent in April 2026, with rice inflation at 13.7 percent, corn at 21 percent, fish and seafood at 9.4 percent, and vegetables at 10.4 percent.
The government has provided fuel subsidies, cash assistance, and credit support for affected farmers and fisherfolk. However, these measures remain largely short-term.
Accordingly, we would like to recommend the following long-term reforms to make the agricultural sector more productive and resilient.
1. Expand and improve existing solar-powered irrigation and agricultural energy programs to reduce farmers’ dependence on diesel. In 2025, the government allocated approximately P42 billion for irrigation programs, with solar-powered irrigation identified by the Department of Agriculture (DA) as a priority investment to address around 1.2 million hectares of unirrigated farmland. However, solar-powered irrigation coverage remains limited compared to the country’s irrigation needs, particularly in rainfed rice- and corn-producing areas vulnerable to fuel price shocks and drought.
Recent implementation problems include delayed delivery of fertilizers, machinery, irrigation equipment, and postharvest facilities.
Accordingly, the DA should gradually expand voucher and cash-based support mechanisms, similar to its pilot intervention monitoring card-linked e-wallet system, allowing farmers and cooperatives to directly purchase approved inputs suited to local conditions. These will reduce delays and improve flexibility and accountability.
2. Strengthen public-private partnerships (PPP) in the agricultural supply chain. The government should build on existing successful private sector participation in agriculture.
In 2025, the DA and San Miguel Foods Inc. launched a PPP establishing buying stations for corn, cassava, sorghum, and soybeans, linking farmers directly to buyers and improving price stability. Meanwhile, the MVP Group, through Metro Pacific Agro Ventures Inc., invested around P800 million in climate-resilient greenhouse vegetable production in Bulacan.
These successful models should be expanded by encouraging more private investment in logistics, warehousing, and food terminals to strengthen supply chains, reduce middlemen costs and transport losses, and improve food affordability and farmer incomes.
3. Strengthen food security and price stabilization measures by enhancing existing food reserves and market stabilization mechanisms, including the operational capacity of the National Food Authority (NFA). Apart from its buffer stocking functions, NFA reforms should prioritize improving procurement efficiency, storage capacity, and inventory management to ensure more effective responses during supply disruptions, oil price spikes, and climate-related shocks.
4. Improve agricultural governance and support local food production. Given the DA’s P186.5 billion budget, greater emphasis should be placed on improving the efficiency, absorptive capacity, and accountability of agricultural spending to ensure resources translate into measurable productivity gains. Spending priority should be given to high-impact investments such as irrigation, postharvest facilities, logistics, extension services, and climate resilience.
Existing support programs such as the Rice Competitiveness Enhancement Fund, which receives approximately P10 billion annually from rice tariff revenues, should be continuously assessed to determine its effectiveness and reorient toward areas with persistent productivity gaps.
Finally, government procurement programs (schools, hospitals, food assistance) should prioritize buying directly from local farmers and cooperatives to improve market access and stabilize farm incomes.
Conclusion. Rising oil prices are no longer simply an energy issue. They have become a direct threat to food affordability, farmer livelihoods, and economic stability. The bigger challenge is to build a more resilient agricultural economy that can withstand future disruptions. This will require stronger leadership, better coordination, and a more strategic partnership among the national government, local government, and the private sector.
Long-term reforms that improve productivity, modernize supply chains, and ensure domestic food availability should be continuously, consistently, and rigorously implemented so that food inflation will no longer be a recurring burden for both producers and consumers.
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Gary B. Teves is a Filipino politician and public servant who served as secretary of the Department of Finance.
