CEBU CITY, Philippines — In a major move to shield the country from fluctuating global prices and the threat of El Niño, the Philippines and Vietnam have finalized a one-year rice supply agreement. The deal ensures a steady flow of the national staple until April 2027.
The agreement was sealed during a bilateral meeting between President Ferdinand Marcos Jr. and newly appointed Vietnamese Prime Minister Le Minh Hung on the sidelines of the 48th ASEAN Summit in Cebu on May 7, 2026.
Under the new mechanism, Vietnam—the Philippines’ largest source of imported grain—has committed to uninterrupted deliveries of a high-quality variety popular among Filipino consumers.
- Total Volume: 1.5 million metric tons (MT) of rice.
- Primary Variety: Dai Thom 8 (DT8), a premium Vietnamese fragrant rice known for its long grain and soft texture.
- Agreed Price: $450 per metric ton for the premium DT8 variety.
- Alternative Varieties: Agriculture Secretary Francisco Tiu Laurel Jr. noted that other rice varieties under the deal could be priced lower, potentially around $390 per metric ton.
Agriculture Secretary Tiu Laurel emphasized that securing these volumes is a strategic necessity to manage three primary risks currently facing the Philippine economy:
- Geopolitical Tension: Ongoing volatility in the Middle East has disrupted global trade routes and increased shipping costs.
- Climate Risks: A looming “moderate to strong” El Niño dry spell later in 2026 threatens local palay production.
- Inflationary Pressure: Philippine headline inflation surged to 7.2% in April 2026, with food prices—specifically rice—being the heaviest driver.
Beyond immediate supply, the Department of Agriculture (DA) views this pact as a “blueprint” for future agricultural cooperation within ASEAN.
“Securing import volumes until next April is crucial amid geopolitical uncertainties and climate risks,” Secretary Tiu Laurel said. “This deal builds on our push for ASEAN countries to trade more closely—it’s another step toward regional integration.”
As of late April 2026, the Philippines had already imported 1.58 million MT of rice for the year, with Vietnam accounting for over 80% of that volume. By locking in prices and volumes for the next 12 months, the government aims to reduce market volatility and prevent sudden spikes in retail rice prices, which the DA recently capped at ₱45 per kilo for certain imported varieties.
The agreement also coincides with the 50th anniversary of diplomatic relations between the two nations, highlighting a deepening economic partnership in the face of regional food security challenges.
