The sharp decline in palay (unmilled rice) prices across the country, particularly during the dry-season harvest, is a result of the government’s policy of unlimited rice importation and tariff cuts on imported rice, the Federation of Free Farmers (FFF) said.
“Based on Bureau of Customs (BoC) data, almost 4.8 million tons of rice arrived in 2024, making the country the world’s biggest rice importer. Another 331,000 tons entered last January, resulting in a supply glut coinciding with the start of the dry season harvest,” the FFF said in a statement.
Farmers in Mangaldan, Pangasinan, according to the group, have decided to delay selling their palay due to low buying prices from traders.
Meanwhile, in San Jose, Occidental Mindoro, prices for newly harvested palay have dropped to as low as P13 per kilo, while clean-and-dry palay is being bought at P19 per kilo.
However, traders are reportedly hesitant to purchase more stocks, citing the influx of imported rice in the market.
The farmers’ group noted that the National Food Authority (NFA) has yet to procure palay at its announced price of P23 per kilo, as its warehouses are still stocked with supplies from previous harvests.
“Some 5,000 sacks in Sablayan and another 3,700 sacks in San Jose have reportedly been stored – and deteriorating – in NFA bodegas in these towns since 2022,” the FFF stated.
Impact of import policies on market prices
The farmers’ group claimed that traders are also holding back on purchasing rice stocks, anticipating further price drops due to the government’s maximum suggested retail price (MSRP) policy and the continued disposal of NFA rice through local governments and KADIWA outlets at a subsidized rate of P33 per kilo.
The current price slump is being exacerbated by falling import costs, the FFF warned.
“Import prices for Vietnamese rice have decreased by over 30% compared to their peak levels in January 2024. The landed cost of rice with 5 percent broken, inclusive of freight and insurance and 15 percent tariff, averaged only P28 per kilo in January 2025, which is significantly lower than current retail prices and the MSRP,” the group stated.
Call to restore 35% tariff
To address the situation, the FFF urged the government to reinstate the 35 percent tariff on imported rice to push local traders to buy palay at better prices.
“The landed cost of rice with 5 percent broken from Vietnam will rise to P33 per kilo if we reinstate the 35 percent tariff. If we add P15 for other costs and trading margins all the way to retailers, imported rice could still be sold at P48 per kilo, well below the current MSRP of P52 per kilo,” Raul Montemayor, the national manager of FFF, said.
He urged the Department of Agriculture (DA) to address the “emerging problems of farmers with the same vigor and persistence with which it has been cutting rice prices for consumers.”
The farmers’ group warned that should no immediate action be taken, the government’s aggressive rice importation policies could leave local farmers struggling to recover losses, further discouraging them from planting for the next cropping season.
In June 2024, President Marcos signed Executive Order (EO) No. 62, reducing tariffs on imported rice from 35 percent to 15 percent.
Such policy sought to lower rice prices and stabilize the market.
Per the DA, the Philippines had imported 4.78 million metric tons of rice as of Dec. 31, 2024.