Background: Aiming to shield farmers from low palay prices
The Philippines is considering a substantial package in the 2026 national budget, with a flagship measure to provide cash aid to farmers. Speaker Faustino “Bojie” Dy III announced that one million rice farmers would each receive P7,000 under the proposed P6.7 trillion budget for 2026. The move is designed to help farmers weather the challenges posed by depressed farmgate prices for palay and a market that has not fully recovered from recent disruptions.
What the proposal includes
According to Speaker Dy, the cash aid is specifically targeted at rice farmers who have faced losses due to low palay prices. He noted that the P7,000 cash assistance is intended to supplement the income of smallholders and provide immediate relief as the government pursues longer-term reforms. The plan is being presented at a joint hearing of the House Committee on Agriculture and Food and the Committee on Ways and Means, signaling a cross-cutting approach to rural support within the budget framework.
Context: aligning with Executive Order No. 93
Dy emphasized that the cash aid would complement Executive Order No. 93, which temporarily suspends rice importation to protect local producers from oversupply and low prices. By prioritizing domestic production and providing direct cash support, the government aims to stabilize smallholder incomes while keeping a policy focus on food security and national resilience.
Rationale: supporting production costs and livelihoods
Farmers, including those in the speaker’s home province of Isabela, have reported selling palay for prices as low as P8 per kilo. This is far below the estimated cost of production, which some farmers say necessitates P16 to P18 per kilo to break even. The proposed cash aid seeks to fill part of this gap, enabling farmers to cover essential costs and maintain planting cycles. Dy framed the measure as evidence of government commitment to both immediate aid and enduring reforms for the agricultural sector.
Beyond cash: broader subsidy considerations
Dy further indicated that the administration has pressed for broader subsidy delivery reforms. He requested that all subsidies from the Department of Agriculture, including seed subsidies, be disbursed in cash to farmers where possible. This approach could streamline assistance, reduce administrative friction, and get aid where it is needed most—directly into farmers’ hands.
Next steps: legislative and budgetary process
As the 2026 budget moves through committee deliberations, the cash-aid proposal will be subject to legislative scrutiny, fiscal constraints, and potential amendments. If approved, implementing rules, eligibility criteria, and disbursement mechanisms will need to be established to ensure timely and transparent delivery to the intended beneficiaries.
Implications for rural communities
Analysts say the plan could have meaningful short-term impact on rural economies by boosting farmers’ purchasing power and stabilizing demand for locally produced rice. In the longer term, coupling cash aid with reforms—such as improved access to credit, farming inputs, and market information—could strengthen resilience in farming households and support sustainable production.
Bottom line
The proposed P7,000 cash aid for 1 million rice farmers, within a P6.7 trillion 2026 budget, signals a strong statement on prioritizing agriculture. While relief is welcome, it will hinge on efficient implementation and a coherent strategy that pairs immediate cash support with structural reforms to protect farmers and ensure food security for the country.
