Rice deficit to reach 6 million metric tons by 2029

MANILA, Philippines — The Philippines’ rice consumption is projected to continue outpacing domestic production, leading to a widening supply deficit that could reach 6.1 million metric tons (MT) by 2029, according to BMI, a unit of Fitch Solutions.

In a report released yesterday, BMI forecast that the country’s rice consumption will grow at an average annual rate of 2.5 percent until 2029, while production will lag behind with a growth rate of only two percent annually.

“The challenges faced by the sector are also reflected in a growing production deficit, which was 1.4 (million MT) in 2014/15 and we forecast this to increase to 3.5 (million MT) in 2024/25 and expand to 6.1 (million MT) in 2028/29,” the report stated.

BMI highlighted that “limited growth” in domestic rice production, coupled with strong consumption demand, has significantly reduced the country’s self-sufficiency in rice.

“We believe that favorable demographic trends will result in continued strong demand for rice in the medium to long term,” the firm noted, adding that consumer spending on rice will grow at a faster rate than overall food expenditures by 2029.

The country’s rice self-sufficiency is estimated to decline to 69.7 percent in 2024/25, a significant drop from 91.6 percent in 2014/15.

The United Kingdom-based multinational research firm also projected that rice imports would account for about 30 percent of the domestic consumption in 2024/25, marking a “significant” increase from 17 percent share five years ago.

Additionally, BMI forecast a 2.6 percent year-on-year decline in domestic rice output in 2024 due to unfavorable weather conditions.

The research firm identified limited availability of arable land, exposure to typhoons and a growing population as persistent challenges constraining the country’s rice production.

To address these issues, the country would have to rely on increasing yields to expand its rice production, according to BMI.

“We expect the government to continue its policies aiming to boost self sufficiency in rice, while also improving trade relationships given the intrinsic challenges in increasing production,” the research firm said.