Philippines - Poultry and Products - Chicken Industry Update - 2009

In 2008, chicken production in the Philippines, valued at about $2 billion, increased by 5.76 per cent over the previous year. The growth in broiler production is forecast to slow this year, according to the latest GAIN report from the USDA Foreign Agricultural Service.
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Executive Summary

In 2008, Philippine chicken production, valued at about $2 billion, increased by 5.76 per cent over the previous year. The growth in broiler production is forecast to slowdown this year as a result of rising feed and production costs and possible weaker consumer demand. Total chicken meat imports, majority of which was chicken leg quarters and deboned chicken meat, increased only slightly in 2008. San Miguel Corporation, the largest agribusiness conglomerate in the country, announced plans to expand broiler production by $68 million.


The Philippine poultry sector, valued at about 131 billion pesos (PHP; $2.7 billion), expanded by 11 per cent in 2008 and represents about 14 per cent of total agricultural production in the country. Chicken production, valued at PHP 98 billion ($2 billion) and the primary source of growth in this sector, went up by 5.76 per cent. Increased broiler production was particularly noted in dressing plants throughout last year.

According to the Philippine Department of Agriculture's (DA) Bureau of Agricultural Statistics (BAS), another contributing factor to the growth in 2008 was the rehabilitation of typhoon damaged farms in Ilocos Region in Luzon. In the fourth quarter, there were reports of establishment of new broiler commercial farms in Ilocos Norte and increase in the number of contract farms in Northern Mindanao.

According to local broiler associations, the growth in chicken output is expected to slowdown this year, partially as a result of weak consumer demand, coupled with rising feed and production costs.

Chicken production ('000 metric tons)
2006 2007 2008 2007/2006 2008/2007
Chicken 1,205.95 1,211.62 1,281.35 0.47 5.76
Chicken eggs 330.29 335.11 350.77 1.46 4.67
Source - Bureau of Agricultural Statistics


Annual per capita chicken production in 2007 was at 7.86 kg decreased slightly from the previous year. Increased production and constant import levels in 2008 are expected to increase per capita consumption in 2008.

According to analysts, the ongoing global economic crisis is expected to dampen consumer food demand in 2009, including chicken consumption. However, concerns about Ebola Reston Virus in pigs may result in some shift from pork to chicken by consumers.

Annual per capita chicken consumption (kg)
2005 2006 2007
Dressed chicken 7.58 7.95 7.86
Chicken eggs 3.46 3.49 3.48
Source - Bureau of Agricultural Statistics


Prices in the poultry sector increased by an average of 5.73 per cent. Farm-gate prices of chicken in particular recorded a 5.64 per cent increment, while that of chicken eggs appreciated by 4.55 per cent

Poultry farm-gate prices (pesos, PHP)
2006 2007 2008 2007/2006 2008/2007
Chicken 67.78 72.14 76.21 6.43 5.64
Chicken eggs 69.49 75.48 79.29 9.146 4.55
Source - Bureau of Agricultural Statistics


Importation of chicken meat increased slightly in 2008 by two per cent. Main country sources are Canada (38 per cent), the United States (30 per cent) and Brazil (18 per cent). Last year, imports of chicken leg quarters, in particular, declined by 35 per cent while imports of mechanically deboned chicken, used mainly in meat processing, increased by 41 per cent.

Adequate domestic production of chicken, coupled with the uncertainty caused by the MAV review and delays in the issuance of MAV licences contributed in part to the decline in chicken leg quarter imports in 2008.


WTO commitments

Since 2005, the DA has continued to maintain tenth or final-year Minimum Access Volume (MAV) levels under its Uruguay Round commitments. For poultry HS 0207, the final-year MAV was 23,490 metric tons (MT). The DA previously stated that it will continue to do so until such time as a new WTO agreement is reached. In late 2007, the DA announced that it would undertake a review of MAV distribution guidelines in order to allow new entrants and more entities to participate in the MAV system. After extensive and spirited consultations with local stakeholders and main trading partners, in February 2009, the Philippine Agriculture Secretary announced that the current MAV system would remain in place and that no changes to would be initiated in the meantime.

Minimum Access Volumes (MAV)

Data from the MAV Management Committee of the Philippine Department of Agriculture (DA) shows that in 2005, fresh/chilled/frozen poultry meat MAV utilization dropped from 89 per cent in 2006 to 85 per cent last year. Despite uniform in and out-of quota duties of 40 per cent for most poultry products, the Philippines maintains a Tariff-Rate-Quota or MAV system for poultry.

Annual MAV utilization for poultry meat for the last three years has averaged around 90 per cent, but has been declining, in part due to the elimination of special safeguard duties for mechanically deboned chicken and thus use of MAV for those products, as well as the uncertainty caused by the extended MAV review last year. The majority of all the country's chicken meat imports (except mechanically deboned or separated poultry) fall under the MAV.

Tariff rates

In-quota and out-of-quota tariff rates for MAV commodities have not changed since 2005. On the other hand, 2009 tariff rates for ASEAN countries have dropped to 20 per cent and are expected to reach five per cent in 2010. For this year, MFN and AFTA-CEPTii tariff rates for chicken are given in the report.

Special safeguards

In 2002, the GRP imposed a price-based special safeguard duty (SSG) on chicken under H.S. 0207.1400 (frozen chicken cuts and offal). This has doubled the effective rate of protection for all out-of-quota imports of the said products.

Last year, the United States exported nearly $20 million worth of poultry meat (including chicken, turkey and duck) to the Philippines, the majority of which are chicken leg quarters and other chicken cuts. The imposition of the SSG in 2002 was mainly the result of intense political pressure from the domestic poultry industry to keep low-priced chicken imports out.


In February 2009, San Miguel Corporation (SMC), the largest food and beverage conglomerate in the Philippines announced that it has earmarked nearly PHP 10 billion ($200 million) for the expansion of its food group programme in the next few years.

San Miguel Corporation enumerated the key components of this expansion plan as follows:

  • PHP 4.89 billion ($100 million) for the expansion of the Monterey Hog Farm
  • PHP 3.37 billion ($68 million) for the expansion of the Magnolia Poultry Farm
  • PHP 840 million ($16.8 million) for the B-Meg Animal Feeds Program
  • PHP 231 million ($4.6 million) for the Purefoods-Hormel Corporation Nuggets line, and
  • PHP 215 million ($4.3 million) for the new Magnolia Ice Cream Plant.

Further Reading

- You can view the full report by clicking here.

April 2009
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