The Philippine agri-food sector—one of the country’s most powerful economic engines—is entering a high-risk year. Trade tensions, rising tariffs, and intensifying climate shocks are converging to test the sector’s resilience. Yet with the right policy mix and investments, these pressures can be transformed into a catalyst for modernization, competitiveness, and food security.
This is the central message of The Economic Impact of the Agri-Food Sector in the Philippines, a new report by Oxford Economics, the ASEAN Food and Beverage Alliance, and Food Industry Asia, launched in Makati on February 5.
A pillar of the economy
The numbers underscore why the stakes are high. The agri-food sector contributes about US$164.6 billion, or roughly one-third of national GDP, and supports 18.8 million jobs, accounting for 38% of total employment. Beyond output and jobs, it anchors food security and inclusive growth, particularly in rural areas.
But the report warns that the operating environment is tightening. Climate risks, trade frictions, and higher tariffs—particularly from the United States—are raising costs and uncertainty for producers and exporters.
Trade risks and inflation pressures
James Lambert, director at Oxford Economics, said Philippine agri-businesses are especially exposed as the US accounts for about 20% of total agri-food exports. An additional 19% tariff could cut US agri-food imports from the Philippines by around 25%, dealing a significant blow to exporters.
Food price inflation is another looming risk. As a net food-importing economy and one of ASEAN’s most climate-vulnerable countries, the Philippines faces compounded pressures from global commodity price volatility and extreme weather disruptions.
In a worst-case global scenario, escalating tariffs could leave global GDP 2.3% below baseline over five years, further amplifying external shocks felt by domestic food systems.
Turning turbulence into advantage
Despite the headwinds, the report argues that the Philippines can “turn turbulence into an advantage” through a proactive, coordinated strategy.
At the core is trade diversification. The ability to scale production and compete with established players is key for local agri-businesses to benefit from short-term trade-diversion dynamics, Lambert said.
To address these risks, the report calls for a focused reform and investment push, starting with upgrading export infrastructure and strengthening food safety and logistics systems such as cold-chain storage, inter-island shipping, and integrated logistics hubs to cut losses and improve reliability for perishable goods. It also urges expanded access to finance, certification, and standards compliance to help MSMEs and small producers enter higher-value export markets, alongside trade facilitation reforms to reduce the cost and complexity of exporting through more efficient customs procedures and predictable food regulations. The agenda includes accelerating investments in resilience-building infrastructure—port upgrades, farm-to-market roads, transport connectivity, renewable energy expansion, and improved grid efficiency—to ensure stable and affordable power for agri-processors. Restoring investor confidence through business-friendly reforms is highlighted as critical to signaling long-term policy commitment, while deeper regional integration is seen as a growth lever, with RCEP participation alone projected to raise Philippine exports by 5.1% and GDP by 3.4% by 2035. The report adds that transparent and consistent trade and investment policies are essential to sustaining investor trust and integrating Philippine producers into global value chains.
A moment for strategic action
The message from the report is clear: risks to the agri-food sector are real and rising, but so is the opportunity.
With continued emphasis on trade openness, infrastructure investment, and institutional capacity, the Philippine agri-food sector can maintain its resilience and reinforce its role as a catalyst for inclusive economic growth.
For policymakers and industry leaders, the challenge now is execution—moving from awareness to a coherent, long-term strategic plan that secures food security, protects livelihoods, and positions Philippine agriculture to compete in an increasingly volatile global market.