Voluntary Report - Public distribution

**Date:** 5/19/2008

**GAIN Report Number:** RP8030

RP8030

**Philippines**

**Grain and Feed**

**Corn PSD Update**

**2008**

**Approved by:**

![](media/image1.wmf)Emiko Purdy

U.S. Embassy

**Prepared by:**

Perfecto G. Corpuz

**Report Highlights:**

Enhanced by high corn prices, Philippine corn production will surge in
MY07/08 due to better yields and an expanded planted area. Increased
food and feed corn consumption will mirror the dramatic production
growth during the period. The following year, production growth will
likely slow although consumption is expected to continue expanding due
to postharvest handling losses. Imports of white corn are predicted in
MY08/09 as a result of tight supply entering the year.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Trade Report

Manila \[RP1\]

\[RP\]

<table>
<colgroup>
<col style="width: 17%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="2"><strong>PSD Table</strong></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td><strong>Country</strong></td>
<td colspan="2"><strong>Philippines</strong></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td><strong>Commodity</strong></td>
<td><strong>Corn</strong></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="3">(1000 HA)(1000 MT)(MT/HA)</td>
</tr>
<tr class="even">
<td></td>
<td>2006</td>
<td>Revised</td>
<td></td>
<td>2007</td>
<td>Estimate</td>
<td></td>
<td>2008</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>07/2006</td>
<td>07/2006</td>
<td></td>
<td>07/2007</td>
<td>07/2007</td>
<td></td>
<td>07/2008</td>
<td>07/2008</td>
</tr>
<tr class="odd">
<td>Area Harvested</td>
<td>2605</td>
<td>2637</td>
<td>2605</td>
<td>2650</td>
<td>2650</td>
<td>2650</td>
<td>2650</td>
<td>2650</td>
<td>2700</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>698</td>
<td>698</td>
<td>698</td>
<td>792</td>
<td>791</td>
<td>542</td>
<td>742</td>
<td>826</td>
<td>777</td>
</tr>
<tr class="odd">
<td>Production</td>
<td>6231</td>
<td>6230</td>
<td>6231</td>
<td>6500</td>
<td>6500</td>
<td>7250</td>
<td>6600</td>
<td>6600</td>
<td>7300</td>
</tr>
<tr class="even">
<td>MY Imports</td>
<td>163</td>
<td>163</td>
<td>163</td>
<td>50</td>
<td>135</td>
<td>135</td>
<td>200</td>
<td>300</td>
<td>50</td>
</tr>
<tr class="odd">
<td>TY Imports</td>
<td>181</td>
<td>150</td>
<td>181</td>
<td>25</td>
<td>135</td>
<td>135</td>
<td>200</td>
<td>300</td>
<td>50</td>
</tr>
<tr class="even">
<td>TY Imp. from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>7092</td>
<td>7091</td>
<td>7092</td>
<td>7342</td>
<td>7426</td>
<td>7927</td>
<td>7542</td>
<td>7726</td>
<td>8127</td>
</tr>
<tr class="even">
<td>MY Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>TY Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Feed Consumption</td>
<td>4700</td>
<td>4700</td>
<td>4950</td>
<td>4900</td>
<td>4900</td>
<td>5350</td>
<td>5300</td>
<td>5350</td>
<td>5550</td>
</tr>
<tr class="odd">
<td>FSI Consumption</td>
<td>1600</td>
<td>1600</td>
<td>1600</td>
<td>1700</td>
<td>1700</td>
<td>1800</td>
<td>1700</td>
<td>1700</td>
<td>1800</td>
</tr>
<tr class="even">
<td>Total Consumption</td>
<td>6300</td>
<td>6300</td>
<td>6550</td>
<td>6600</td>
<td>6600</td>
<td>7150</td>
<td>7000</td>
<td>7050</td>
<td>7350</td>
</tr>
<tr class="odd">
<td>Ending Stocks</td>
<td>792</td>
<td>791</td>
<td>542</td>
<td>742</td>
<td>826</td>
<td>777</td>
<td>542</td>
<td>676</td>
<td>777</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>7092</td>
<td>7091</td>
<td>7092</td>
<td>7342</td>
<td>7426</td>
<td>7927</td>
<td>7542</td>
<td>7726</td>
<td>8127</td>
</tr>
<tr class="odd">
<td>Yield</td>
<td>2.391939</td>
<td>2.362533</td>
<td>2.391939</td>
<td>2.45283</td>
<td>2.45283</td>
<td>2.735849</td>
<td>2.490566</td>
<td>2.490566</td>
<td>2.703704</td>
</tr>
</tbody>
</table>

Upward adjustments were made to feed corn consumption in MY06/07 to
reflect the stronger-than-expected demand for animal feed during the
period. With less competition from imported feedgrain as a result of
rising global prices, demand for local corn surged with both food and
feed corn consumption increasing significantly during the period. As
reported in GAIN 8026 (CONSUMPTION, Oilmeals), all feed consuming
sectors posted positive growths last year. It should be noted, however,
that the consumption figures in the table does not reflect actual demand
as it also includes considerable spoilage losses.

Strong feed demand raised local yellow corn prices which encouraged
increased production in MY07/08. Philippine corn production in MY07/08
was raised to approximate official production estimates from the Bureau
of Agricultural Statistics (BAS) for calendar year 2007 and its
projections for the first semester of 2008. Official projections are
based on farmers' standing crop and planting intentions. The improved
production in MY07/08 is mainly due to the increased use of
better-quality planting seeds, including GM corn, which considerably
raised yields.

As a result of the significant increase in corn production in MY07/08,
similar revisions were likewise made to corn consumption (mainly local
corn) during the year. High prices of imported feed grain are likely to
have insulated local corn use from foreign competition during the
period.

For MY08/09, corn production is again expected to increase from the
previous year's level as local farmers continue to respond to the high
corn prices. The response by local farmers is expected to be enhanced by
increased support from the national government. Similarly, upward
revisions were also made to overall corn consumption during the year.
Food corn consumption in MY08/09, however, is expected to remain flat
compared to the previous year as white corn farmers are expected to
shift to yellow corn production during the year as a result of high
prices. As noted earlier, the growth in feed consumption during the year
is largely the result of increased spoilage losses due to inadequacy of
existing postharvest, storage and distribution facilities.

The import estimate in MY08/09 was pared down due to the expected
improved production during the period and represents the volume of a
possible white corn importation during the year. This is due to a
reported shortage in white corn supply in the Central Visayas Region
(refer to GAIN 8023) experienced early 2008.