BMI View: We hold a positive view on the Philippines ' agribusiness sector in the long term, given the country's potential for expansion into new sectors , such as palm oil. We particularly like t he outlook for sugar production and believe the livestock sector will continue to show healthy growth rates. The Philippines' vast consumption market, along with strong government support , will foster domestic and foreign investment and favour output expansion. However, backyard farming and infrastructure problems, especially transport costs, will continue to hamper the sector's growth. These inefficiencies will become increasingly crippling as South East Asia moves towards the ASEAN Economic Community, which is supposed to lead to trade and investment liberali s ation in the region. Although the Philippines' government appears to have taken the measure of the challenge and is now supporting rice and sugar production, agriculture in the country remains uncompetitive. As such, the sector is at risk of low cost imports from its neighbours over the medium term.
|BMI Market Value By Commodity (2005-2020)|
|e/f = BMI estimate/forecast. Source: BMI, FAO|
Sugar production growth to 2019/20: 21.0% to 2.8mn tonnes. Sugar production growth will be driven by improvements in yields. The government approved the Sugarcane Industry Development Act, which is aiming at diversifying the sugar sector towards more value-added products and will provide financing to farmers.
Poultry production growth to 2019/20: 16.3% to 1.3mn tonnes. Poultry production will record steady but unspectacular growth. Growth will be driven by investment, both domestic and foreign.
Milk production growth to 2019/20: 23.4% to 25,100 tonnes. Milk and other dairy production will remain very low in the Philippines, although it will record strong growth due to low base effects. The government is committed to increase domestic supply of liquid milk, via National Dairy Development Plan.
Agribusiness market value: 2.5% increase to USD32.9bn in 2016, forecast to grow on average 4.7% annually between 2016 and 2020.
2016 real GDP growth: 6.0% (up from 5.8% in 2015; predicted to average 5.9% over 2016-2020).
2016 consumer price inflation: 2.0% y-o-y (up from 1.5% in 2015; predicted to average 3.5% over 2016-2020).
The Philippines has been badly affected by El Nino since the phenomenon re-emerged in H215, as it has lead to a prolonged period of unusually dry weather. Although El Nino is currently fading and should dissipate in Q316, rainfall in the Philippines remained significantly lower than normal so far in 2016.
We have revised down our production forecasts for a number of commodities as the drought will damage agricultural production in 2016. We expect output of rice, corn, sugar and coffee to decline quite significantly, increasing import demand for these commodities. The Philippines will see its imports grow in 2015/16, as the government has no choice but to agree to ease its strict import policy. Milk and livestock production will hold up better than other commodities but output growth slowdown.
In 2016, the Philippines and the EU began negotiations for a potential free-trade agreement. This would bode well for the EU's meat and dairy exports to the Philippines, given the country's robust food consumption growth and rising import needs.
Regional economic and financial integration in South East Asia is making progress. The Association of South East Asian Nations (ASEAN) has officially set out the full implementation of its ASEAN Economic Community (AEC). We believe some countries' agricultural sectors will be affected by the AEC, as their uncompetitive production will face challenges from cheaper imports. With the elimination of trade tariffs, competition between countries will increase, and production in less competitive countries may decline. The problem is all the more significant for uncompetitive countries that are not self-sufficient in some commodities and already import part of their consumption needs. Indeed, these countries already face growing imports from the ASEAN region and, more specifically, smuggled imports. The Philippines' production of some commodities, especially rice and sugar, is at risk of such a scenario.
The Philippines' government appears to be aware of the challenge and is making some progress to address issues in the agricultural sector, including in the sugar sector. However, agriculture in the county remains broadly inefficient and production commands high prices, which make the Philippines' products uncompetitive.
The Philippines Agribusiness Report features BMI Research's market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.
BMI's Philippines Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.
- Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
- Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.
- Assess the activities and market position of your competitors, partners and clients.
BMI Industry View
Summary of BMI’s key industry forecasts and views, highlighting recent changes and key risks to the industry outlook.
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the wider agricultural industry.
BMI Supply & Demand Forecasts
Divided into sections based on various diverse sectors in the agriculture market, the chapter provides insight into each market’s agricultural industry, centred on sector forecasts to end-2019 for the consumption, production and trade of key commodities.
- Consumption Forecasts: Accompanied by a discussion of the main drivers of consumption growth: macroeconomic factors, food processing trends, price movements and increasingly, demand from the non-food sector.
- Production Forecasts: Examine the trends influencing BMI’s production outlook: global demand, price increases, public and private sector investment and agricultural efficiency improvements.
- Trade Forecasts: Accompanied by a discussion of the factors influencing a country’s trade in agricultural goods, including domestic demand, global prices and government trade policies.
- BMI’s Forecasts: Accompanied by a risks-to-outlook assessment, which examines potential factors that could affect our existing forecast picture and the likelihood of their occurrence.
BMI’s Commodity Price Analysis
Fundamental and technical analysis of the short- and medium-term price outlook for eight agricultural commodities based on globally recognised benchmarks.
Analysis of headline food and drink forecasts, including total food consumption, per capita food consumption and total sector trade, which provide important downstream intelligence for primary agricultural producers.
Includes relevant articles from BMI’s daily analysis service. These can include: long-term projections on agricultural imports and exports; our perceptions of the impacts of economic slowdown on key companies and subsectors within the Agribusiness industry in a given country; our analysis of fertilizer production; as well as other relevant analysis of recent news and events.
The reports contain information on prominent companies operating in each market.
Key Commodities Covered By The Agribusiness Market
Reports Include: Grains, Dairy, Livestock, Rice, Sugar, Palm Oil, Edible Oils, Coffee, Cocoa, Cotton, Soybean
Please note – not all reports cover all commodities.
The Agribusiness reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.