Food Security at What Cost? An Economic and Fiscal Analysis of the Php 20 Rice Price Policy in the Philippines

The evaluation assesses the economic sustainability, social implications, and fiscal impact of the Philippine government's goal to establish a universal retail price of Php 20 per kilogram for rice, which serves as a vital food security measure and a powerful political icon. The research evaluates this extensive policy through analyses of official statistics, academic studies, and industry reports. The research data shows that the Php 20/kg target price remains far from the actual market prices, which reached more than Php 40/kg during the first months of 2025. The analysis shows that the raw material cost of palay (unmilled rice) at the farmgate already reaches or exceeds the Php 20 target when converted to its milled rice equivalent before adding milling and logistics expenses and retail margins. The government would need to provide annual subsidies of between Php 178 billion and Php 329 billion to implement a universal price ceiling, which would exceed the Department of Agriculture's total budget. The research shows that farmer profitability and livelihood sustainability are under severe threat, which could lead to decreased production and increased import dependence. The policy would provide immediate benefits to consumers, yet it would generate substantial market disruptions, leading to stockpiling, decreased private-sector investment, and permanent harm to agricultural value chain operations. The research demonstrates that a Php 20/kg rice price is economically unfeasible in the present situation and would create a fiscal problem, diverting essential agricultural productivity investments required for sustained food security.