The Organisation for Economic Co-operation and Development (OECD) has called on the Philippines to abandon temporary agricultural interventions in favor of structural reforms aimed at boosting productivity and attracting private investments.
In its “Agricultural Policy Monitoring and Evaluation 2026” report released on November 2, the Paris-based organization noted that while state support remains among the highest globally—averaging 2.3 percent of the country’s gross domestic product from 2023 to 2025—it relies heavily on market price support.
These measures keep local prices higher than international benchmarks through tariffs and quotas, placing the financial burden largely on consumers.
The report revealed that domestic producer prices averaged 29 percent above border reference prices between 2023 and 2025. Furthermore, these policies raised consumer food spending at the farmgate level by about 20 percent, making consumers net contributors to farm support.
The OECD warned that relying on commodity-specific price supports constrains agricultural output, hinders diversification, and distorts trade incentives. Recent government actions—such as palay floor prices, flexible tariffs, and import moratoriums on sugar and molasses extending into 2026—only provide temporary relief.
In 2025, tariff-rate quotas applied to 14 farm commodities, including rice, sugar, corn, poultry, potatoes, and coffee. In-quota rates ranged from 15 to 50 percent, while out-of-quota duties reached up to 65 percent, bringing the average applied tariff for agricultural goods to 11.24 percent.
“Rebalance rice policy by gradually reducing reliance on price-distorting mechanisms and shifting towards more targeted risk-management instruments,” the OECD advised.
To address weak agricultural productivity—which grew by just 0.1 percent annually from 2014 to 2023, compared to the 1.8 percent global average—the OECD recommended redirecting state spending toward infrastructure. Priorities include post-harvest facilities, modernized storage, digital systems, research and development, extension services, and climate advisory programs.
The organization also emphasized the need for predictable trade and sanitary measures to improve the overall investment climate.
“This would support stable investment signals and improve integration into regional and global markets,” the report stated.