Flat agri growth seen in 2026 as climate, costs weigh on sector

Despite posting its strongest expansion in five years in 2025, the Philippine agriculture sector is expected to register little to no growth in 2026 as climate risks, high production costs, and persistent supply chain challenges continue to weigh on output.

The University of Asia and the Pacific Center for Food and Agribusiness (UA&P-CFA) projects agricultural growth to range between a 0.5 percent contraction and 0.5 percent expansion this year, a sharp slowdown from the 3.1 percent growth recorded in 2025.

Speaking at the UA&P-CFA Midyear Food and Agribusiness Conference, Executive Director Marie Annette Dacul said last year’s performance reflected a recovery from previous setbacks rather than a structural improvement in agricultural productivity.

“The outlook suggests a mixed performance across sub-sectors, with poultry and livestock expected to support overall growth while crops and fisheries remain under pressure,” Dacul said.

Crop production is projected to decline from last year’s levels as farmers continue to grapple with elevated input costs and weather-related uncertainties. The fisheries sector, meanwhile, is expected to remain constrained by climate variability and rising operating expenses, particularly fuel costs.

Dacul identified four major risks facing the country’s agribusiness supply chain: climate and environmental disruptions, economic pressures, pests and diseases, and systemic vulnerabilities such as geopolitical shocks.

While these challenges pose significant risks, she said they also present opportunities to modernize and transform the sector.

Among the areas with strong growth potential are agricultural exports, climate-smart farming, digital agriculture, high-value crop production, value-added agribusiness processing, and logistics modernization.

Dacul said rising global incomes continue to drive demand for premium tropical and processed food products, creating opportunities for Philippine exports such as bananas, pineapples, mangoes, coconut products, and other specialty agricultural goods.

“With better quality, processing and marketing, we can further expand our presence in global markets,” she said, noting that the country should focus on niche export markets where Philippine products have a competitive advantage.

She also emphasized the importance of investing in climate-smart agriculture, including climate-resilient crop varieties, improved irrigation systems, and more efficient water management to help farmers adapt to increasingly extreme weather conditions.

Digital technologies are likewise becoming increasingly important in boosting farm productivity. Dacul cited the growing use of drones, satellite imagery, artificial intelligence, and mobile applications to improve crop monitoring, optimize farm operations, and connect producers directly with buyers.

She also encouraged greater investment in high-value agriculture, including fruits, vegetables, coffee, cacao, coconut products, aquaculture, and other premium commodities that can generate higher returns from the same area of farmland.

“Instead of simply producing more, we should also produce better,” she said.

Beyond production, Dacul stressed the need to expand value-added processing to help farmers capture a greater share of the agricultural value chain while creating more jobs in rural communities.

She also underscored the importance of modernizing cold storage facilities, warehouses, and transport systems to reduce post-harvest losses, improve food distribution efficiency, and enhance the competitiveness of Philippine agricultural products in both domestic and export markets.