Despite the effort of the Philippines authorities to rebuild its hog industry after the ASF disease that started in 2019, the long domestic supply chain is increasing both farmgate and retail prices for pork cuts. Consequently, imports are stable and keep coming in.

The volume of hog production from January to March 2024 recorded a live weight of 420 thousand metric tons. This indicates an annual decline of -4.3% from the same period in 2023 [1]. At the end of March, total swine inventory was estimated at 9.96 million heads. This is 2.5% lower than the previous year´s same-period count of 10.21 million heads.

Therefore, the Government is maintaining the “special” import tariff rates of last year, 15% in-quota and 25% out of it. The strong demand for pork in the Philippines and the high inflation rates are navigating toward a strategy that keeps relying on imports.

There is a sustained uptrend in overall inflation for the Philippines. Food and non-alcoholic beverages are one of the top three commodity groups contributing to overall inflation. The rate in May is 5.8% [2] (while 3.9% in general). Inflation for meat is still rising while other products like vegetables, cereals, fruits, and rice are decreasing [3].

For pork meat in May, in the principal markets of the country, the average retail price recorded 339 PHP/Kg (5.36EUR) for kasim shoulder ham (kasim cut includes the neck, shoulder blade, and upper arm) and 370 PHP/kg (5.84EUR) for liempo belly (liempo cut is taken from the belly or sides of the pig). January was 311 PHP/kg (4.91EUR) and 359 PHP/kg (5.67EUR) respectively. Last year, pork kasim’s average price was 300 PHP/kg (4.74EUR) while pork liempo stayed at around 350 PHP/kg [4] (5.53EUR).

One plausible explanation is the evolution of farm-gate prices, which are always increasing. For example, the Pork Producers Federation of the Philippines (PPFP) has recently diagnosed this increase in the price due to farm input and production costs [5]. The average now is around 183.64 PHP/kg (2.91EUR), while in December 2023 it was 167.69 PHP/kg (2.65EUR). In comparison, the CIF price for Spanish “belly” frozen pork is 110.826 PHP/kg (1.75EUR) which still has a high margin for profit to reach local pork.

About 70% of the country´s swine population comes from small-hold farms. There are some commercial side companies, but still a minority, and the rate is nowadays showing a decreasing trend for such companies. Small-scale farming implies less capacity to integrate all value chains, with some outsourcing that needs to be done. The longer the supply chain, the more intermediate stakeholders, the more added profit margins, and higher prices for end consumers [6].

On the other hand, imported pork has recently thrived. In the first quarter of the year, pork meat imports rose by almost 12% (128MT from 114MT in 2023) [7]. Jan-Feb 2024 shows +22% in pork exports from the EU to the Philippines although price is stabilizing at a lower level compared to last year.

There is a good chance the Philippines will continue to demand considerable quantities of pork for a long time. Both farmgate and retail prices are up, and inventory is down from previous quarters [8].

[1] https://library.psa.gov.ph/cgi-bin/koha/opac-detail.pl?biblionumber=28432

[2] Consumer Price Index and Inflation Rate | Philippine Statistics Authority | Republic of the Philippines (psa.gov.ph)

[3] Consumer Price Index and Inflation Rate | Philippine Statistics Authority | Republic of the Philippines (psa.gov.ph)

[4] https://www.da.gov.ph/price-monitoring/

[5] Pork prices up due to increase in production cost, group says | GMA News Online (gmanetwork.com)

[6] Philippine-Hog-Industry-Roadmap.pdf (da.gov.ph)

[7] bai.gov.ph/stakeholders?Rep=Importation Data

[8] https://www.feednavigator.com/Article/2021/09/28/Philippines-Pig-sector-not-expected-to-recover-until-2024