THE Department of Agriculture (DA) said it is expecting a further drop in the maximum suggested retail price (MSRP) of rice due to declining global rice prices and strengthening of the peso.

The government may bring the MSRP to P45 per kilo for imported rice varieties consisting of 5% broken grains in late March from P49, Agriculture Secretary Francisco Tiu Laurel, Jr. told reporters late Monday.

The peso closed at P57.90 to the dollar on Monday, strengthening from its P57.995 on Friday finish.

Mr. Laurel in late February said the DA will apply the MSRP “more selectively” since the prices of imported rice “were already lower than the MSRP” in “some provinces.”

The first MSRP was set at P58 per kilo on Jan. 20.

The retail price for 5% broken rice was P62-P64 per kilo before the MSRP order, which Mr. Laurel said has been effective in influencing market prices.

The government lowered the tariff on rice imports to 15% last year, promising “substantial drops” in rice prices by January.

“From vegetables to rice, prices have declined,” Mr. Laurel said. “Our MSRP is really working.”

The DA declared a national rice emergency, citing an “extraordinary” spike in the prices of the staple grain despite lower tariffs for imports.

A food security emergency declaration — a power given to the DA under Republic Act 12708 or the Agricultural Tariffication Act — triggers the release of rice reserves from National Food Authority warehouses to stabilize prices. 

Rice imports hit an all-time high of nearly 4.7 million metric tons in 2024, in the face of inadequate domestic production.

In mid-January, Mr. Laurel said the government does not plan to rely as heavily on imports to bring down high rice prices, which he said are also caused by profiteering. — Kyle Aristophere T. Atienza

By Kyle Aristophere T. Atienza, Reporter

THE displacement of the Philippines by Vietnam as the top banana supplier to China reflects the Philippine banana industry’s declining competitiveness, as well as weak Chinese demand and the impact of plant diseases, analysts and agriculture industry officials said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said China’s banana imports last year declined by about 4%, though Vietnam grabbed more market share due to its “lower labor costs and overall cost of living that led to lower prices.”

The International Trade Centre, an arm of the World Trade Organization, reported that China’s banana imports from the Philippines hit a 15-year low in 2024 of 463,306 metric tons. Vietnam’s banana exports to China, meanwhile, rose 24% to 625,166 MT.

Mr. Ricafort cited Vietnam’s proximity to China, which helps cut logistics costs in the face of high fuel prices.

“I think the decline is a result of a combination of the effects of the sigatoka and Panama plant disease and emergence of competing suppliers like Vietnam, which is very competitive and enjoys lower banana tariffs,” Federation of Free Farmers National Director Raul Q. Montemayor said via Viber. 

Philippine banana exports overall fell 2.97% to 2.28 MT in 2024, ceding its position as the third-leading banana exporter.

The Food and Agriculture Organization (FAO) at that time noted that Philippine supplies continued to be affected by “the spread of TR4,” a variety of Panama disease or fusarium wilt.

The Tropical Race 4 strain, a soil-borne fungal disease that deprives bananas of minerals, nutrients, and moisture, was first detected in Davao City in 2009 and still threatens the Cavendish banana, the main export variety.

“Geopolitics and competitiveness has a lot to do with Philippines losing its market share,” according to Philippine Chamber of Commerce and Industry Chairman George T. Barcelon, former chairman of the Philippine Exporters Confederation, Inc. He did not elaborate.

Mr. Ricafort said geopolitical risks are also playing a part due to ongoing tensions between the Philippines and China in the South China Sea, which Beijing claims almost in its entirety.

“The dispute partly led to lower demand for Philippine exports such as bananas,” he said. 

China is the Philippines’ largest source of imports and the second-biggest market for exports. Two-way trade hit $41 billion in 2023. 

Mr. Ricafort cited the flare-up of tensions in 2012, when China imposed what industry representatives called “unbelievably” tight quarantine rules for Philippine fruit products, with Beijing allegedly detecting mealy bugs in Philippines fruit.

“Whenever there were tensions in the past, China would resort to phytosanitary requirements to prevent some Philippine fruit exports to China, causing Philippine products to rot in ports,” he said.

The quarantine restrictions followed a standoff at Scarborough Shoal, although government officials said at the time that phytosanitary issues had surfaced even before the conflict.

“Panama disease is more manageable than the loss of warmer bilateral relations between the Philippines and China, which is driven by the geopolitical dynamics brought about by the Taiwan issue that pits the US and its allies against China,” according to retired agriculture professor Roy S. Kempis, who heads the Center for Business Innovation at Angeles University Foundation.

“The Philippines is directly on the receiving end as well as a victim of collateral damage,” he said via Viber. “While we have the best tasting bananas in the world, the reality is, this can be ignored by China for geopolitical vengeance and gain.”

Mr. Kempis said moving forward, the logical step is to find alternative markets for Philippine bananas.

Mr. Ricafort said another key market for Philippine bananas is South Korea, with which Manila recently signed a free trade agreement.

The deal allows the Philippines to export fresh bananas to South Korea at zero duty by January 2028, “with tariffs starting at 24% upon entry, falling to 18% by January 2025,” according to the Department of Trade and Industry. 

Philippine banana market share in South Korea fell 11 percentage points between January and August 2024.

The FAO said in January that Philippine exports to China and Japan declined last year due to a shortfall in domestic supply, noting that only 51,000 hectares out of the 89,000 hectares of land available for banana cultivation were operational.