Philippine Palay Forecast Falls 17.2% as Smaller Harvest Area Cuts Rice Output

Smaller Harvest Area Drives a 650,000 Ton Decline

The Philippines is expected to produce 3.10 million metric tons of palay, or unmilled rice, in the third quarter of 2026, down 17.2% from 3.75 million metric tons a year earlier, according to the Philippine Statistics Authority (PSA). The September estimate puts the expected loss at about 650,000 metric tons and cuts the forecast for a second consecutive month.

The central problem is a smaller area available for harvesting. The PSA projects that 753,680 hectares will be harvested from July through September, down from 916,770 hectares in the same period last year. That is a reduction of 163,090 hectares, or 17.8%. Expected production per hectare has edged higher, but the improvement is too small to make up for the lost area.

Corn production is also expected to fall, adding pressure to a food supply system that serves both households and livestock farms. The Department of Agriculture (DA) is seeking a larger corn import allowance while the National Food Authority (NFA) is pursuing purchases of domestic palay to build its reserves.

The rice outlook brings together three immediate concerns: how much farmers can harvest, how much imported rice will be needed, and whether government buying can support growers while maintaining public stocks. The figures are forecasts based on crops observed before the quarter ended; final production totals have not been given.

How the Forecast Changed From July to September

The PSA reduced its third quarter palay estimate from 3.26 million metric tons in July to 3.19 million in August, then to 3.10 million in September. The latest figure is 160,000 metric tons, or about 4.9%, below the July forecast.

The sequence shows the outlook weakening as the harvest approached and more information about standing crops became available:

• July: Palay production was forecast at 3.26 million metric tons, while corn production was forecast at 2.11 million metric tons.
• August 1: The palay estimate fell to 3.19 million metric tons and the corn estimate to 2.08 million metric tons.
• September 1: The palay estimate fell again, to 3.10 million metric tons, with 334,330 hectares already harvested.
• September 24: Rice imports had reached 3.98 million metric tons.
• October 12: An update on NFA procurement described a harvest season buying target of at least 500,000 metric tons.

At 3.10 million metric tons, third quarter palay production would be the lowest since the 3.05 million metric tons recorded in 2017. The projected harvest would be only 50,000 metric tons above that earlier level.

Why Better Yields Cannot Offset Less Land

The PSA expects palay yield to rise to 4.12 metric tons per hectare, compared with 4.09 a year earlier, an increase of about 0.7%. Yield means the amount harvested from a given area of land. Total production depends on both that amount and the number of hectares harvested.

A small yield improvement across a much smaller harvest area still produces less rice. In this case, a gain of 0.03 metric tons per hectare is being outweighed by a reduction of more than 163,000 hectares. The figures place the main pressure on the size of the harvest area rather than on a nationwide decline in palay productivity.

The August forecast had put the harvest area at 771,790 hectares and yield at 4.13 metric tons per hectare. By September, the estimated area had fallen another 18,110 hectares, while expected yield had slipped slightly to 4.12. Both revisions pushed the production forecast lower.

The DA links its expectation of weaker farm output to the effects of El Niño. The weather pattern can bring unusually dry conditions to the Philippines, reducing water available for planting and crop growth. The department expects palay production for the year to decline by around 700,000 metric tons.

What Farmers Had Harvested and Planted

By September 1, farmers had harvested an estimated 334,330 hectares of palay, producing 1.32 million metric tons. The harvested area represented 44.4% of the PSA's projected third quarter harvest area of 753,680 hectares.

A month earlier, on August 1, only 113,790 hectares had been harvested, yielding 455,250 metric tons. The harvested share was then 14.7% of the August area forecast. Those figures show how much of the crop moved through harvest during August, even as the estimate for the full quarter declined.

The PSA, the government agency responsible for national production statistics, also recorded progress against farmers' intended planting area for July through September:

"Of the farmers' planting intentions for July to September 2026 at 1.58 million ha perceived area, 1.38 million hectares or 87.5 percent have been actually planted," the PSA said.

The planting figures refer to land farmers intended to plant during those months. The harvest forecast concerns crops expected to be gathered during the quarter. Rice takes time to grow, so planting and harvesting figures describe different points in the farming cycle.

Standing Crops Show the Harvest Still Developing

The PSA recorded 1.80 million hectares of standing palay in its September update. Of that area, 40.6% was in the vegetative stage, 38.3% in the reproductive stage and 21.1% in the maturing stage.

Vegetative crops are growing leaves and stems. Reproductive crops are developing the structures that produce grain, while maturing crops are closer to harvest. These stages help explain why a large area of standing rice does not become harvested output all at once.

The August update had recorded 1.55 million hectares of standing palay, with 60.1% in the vegetative stage, 26.1% reproductive and 13.8% maturing. By September, a larger share was in the later stages of growth, making water availability and conditions during grain development important to the coming harvest.

Corn Faces Losses in Both Area and Yield

Third quarter corn production is forecast at 2.08 million metric tons, compared with 2.43 million a year earlier. That is a reduction of about 350,000 metric tons, or 14.4%. Unlike palay, corn faces declines in both harvest area and production per hectare.

The latest corn forecast puts the harvest area at 692,550 hectares, down 12.3% from 789,240 hectares a year earlier. Yield is expected to fall 2.3%, from 3.07 to 3.00 metric tons per hectare.

The August estimate also projected 2.08 million metric tons of corn, but used a smaller harvest area of 688,030 hectares and a higher yield of 3.02 metric tons per hectare. The later increase in estimated area was offset by the lower expected yield, leaving the rounded production forecast unchanged.

By August 1, farmers had harvested 129,950 hectares of corn, or 18.9% of the area forecast at that time, producing 366,790 metric tons. The PSA also recorded 798,370 hectares of standing corn: 39.2% reproductive, 31.2% maturing and 29.6% vegetative.

Rice Imports and Corn Access Address Different Needs

Rice imports had reached 3.98 million metric tons by September 24, and imports for the year were projected to exceed 5 million metric tons. Reaching that projection would require more than another 1.02 million metric tons after the September tally.

Palay must be milled before it becomes the rice sold for cooking. Milling removes the husk and other outer layers, reducing its weight. A 650,000 metric ton decline in palay therefore cannot be matched kilogram for kilogram against imported milled rice when assessing food supplies.

The DA is also seeking to expand the minimum access volume for corn to 500,000 metric tons. This is an import quota under which a specified quantity can enter at a lower tariff than corn imported outside the quota. A tariff is a tax charged on imports.

The proposed expansion is intended to help protect hog and poultry producers from potentially higher feed costs amid the threat of El Niño. Corn is an ingredient in animal feed, so a smaller domestic harvest can put pressure on farms producing pork, chicken and eggs. The proposal concerns access to imported corn; approval and implementation dates were not specified.

NFA Buying Depends on Prices and Warehouse Space

The NFA is targeting purchases of 500,000 metric tons of palay during the harvest season toward a full year goal of 790,000 metric tons. The harvest target was described as up to 500,000 metric tons in the production account, while the October 12 procurement update described it as at least that amount.

NFA Administrator Larry Lacson said the agency had raised its minimum buying price for clean, dry palay to between PHP28 and PHP30 per kilogram. He also said the agency was renting additional warehouses and would continue purchasing while storage space remained available.

A purchase of 500,000 metric tons would represent about 63.3% of the NFA's annual target. Warehouse capacity is a practical limit: the agency needs room to receive and store grain before it can keep buying more.

The NFA said its own stocks covered seven days of consumption, while the national rice stock position covered about 75 days. The national figure included rice held by households, traders and rice millers, as well as public stocks. Much of the country's rice supply is therefore held outside NFA warehouses.

Farm Prices Rise From Last Year but Fall From August

The average farmgate price of dry palay was PHP20.84 per kilogram in September, up 33.6% from PHP15.60 in the same month last year. Farmgate prices are what growers receive when selling their crop, before milling, transport and retail costs are added.

September's price was nevertheless 6% below August's PHP22.16 per kilogram. Farmers were receiving substantially more than a year earlier, but less than a month earlier as harvesting advanced.

The NFA's announced buying range of PHP28 to PHP30 per kilogram was PHP7.16 to PHP9.16 above the September national average. That comparison explains why government procurement may attract growers, although the NFA price applies to qualifying clean, dry palay and actual purchases depend on available storage.

The production decline and buying programme address different parts of the same supply problem. Imports can add rice for consumers, while NFA purchases move domestically grown palay into public reserves and provide an outlet for farmers. Neither changes the amount already grown for the quarter.

Key Points

• Third quarter palay production is forecast at 3.10 million metric tons, down 17.2% from a year earlier.
• The expected palay harvest area is down 17.8%, outweighing a small improvement in yield.
• The palay forecast fell from 3.26 million metric tons in July to 3.19 million in August and 3.10 million in September.
• Corn output is forecast at 2.08 million metric tons, about 14.4% below last year's third quarter total.
• Rice imports reached 3.98 million metric tons by September 24 and were projected to exceed 5 million for the year.
• The DA seeks a corn import quota of 500,000 metric tons to help contain feed costs.
• The NFA is pursuing harvest season palay purchases toward an annual target of 790,000 metric tons, with warehouse space limiting further buying.