The average cost to produce palay fell last year, but industry observers warn that gains may prove temporary as climate and input pressures mount.
Data showed the average cost of palay production dropped 7.7% to P55,097 per hectare in 2025.
Despite the lower costs, yields remained flat at roughly 4.15 tons per hectare over recent years, below the target of five tons per hectare.
A representative of a national farmers' federation described the combination of declining costs and stagnant output as unsustainable.
The official noted that billions in government spending on seeds, fertilizer, and machinery had failed to lift productivity meaningfully.
Without a dramatic improvement in yields, any cost reduction is superficial, the federation representative said.
Looking ahead, production expenses are expected to rise due to higher fuel and fertilizer prices and the anticipated impact of El Niño.
An executive at a separate agricultural industry group disputed the reported decline in production costs for 2025.
He cited major rice-growing provinces where costs reached P16 to P17 per kilogram, exceeding the official estimate of P13.26 per kilogram.
Fuel and fertilizer remain the dominant cost drivers, and current cropping expenses have climbed to between P20,000 and P30,000 per hectare.
