Breaking down the struggles of Philippine banana export in Asia

Neil Gregori Garen

Mar 8

Why is Vietnam surpassing the Philippines in banana exports to China, while South American countries dominate the Philippines’ key markets in Japan and South Korea? Is this due to shifting trade relationships, or does it reveal deeper issues in Philippine agriculture?

While the Philippines remains a major banana exporter, it faces mounting challenges that threaten its global standing. Addressing these issues—through farm expansion, research collaboration, and policy reforms—could help the country reclaim its position in the international banana market.

The Philippines has long been a key player in the global banana trade, even maintaining strong exports to China despite geopolitical conflicts—although it has lost its top spot to Vietnam. However, recent years have seen a decline in its competitiveness. Here are five major reasons why the country is struggling to maintain its dominance in banana exports:

Limited farm expansion

Unlike Vietnam and South American nations, which are making large-scale investments in agricultural land development, the Philippines lags behind in expanding its banana farms. Many plantations remain stagnant, with minimal investment in new farming areas, limiting productivity and export capacity. While the government reports some increase in production, land expansion remains insufficient. Compounding this issue, 90% of the country’s banana plantations are concentrated in the Davao region, making production highly vulnerable to natural disasters, which could significantly disrupt supply.

Rising domestic consumption due to population growth

With only a slight increase in banana production, the Philippines struggles to meet both local and international demand. The competition starts within the country itself, as producers must decide whether to prioritize the domestic or export market. The Philippines’ fast-growing population drives up local banana consumption, further reducing the volume available for export. Without significant improvements in agricultural productivity, the country will continue to lose ground in the global banana trade.

Geopolitical tensions affecting trade and research

The challenges in the banana trade stem from two major factors: geopolitical tensions and agricultural threats. Ongoing disputes between the Philippines and China create uncertainty among traders, making them hesitant to invest in Philippine banana exports. At the same time, banana farmers struggle with persistent threats from pests and diseases such as Fusarium Wilt (Panama Disease), which impact both the quantity and quality of production.

China has played a significant role in supporting agricultural research in the Philippines, particularly through its funding of the International Rice Research Institute (IRRI) to enhance rice production. A similar partnership in the banana industry—focused on disease resistance, sustainable farming, and market expansion—could significantly boost the Philippines' banana exports. Without geopolitical conflict, collaboration in research and technology could strengthen the industry, helping the country reclaim its position as a leading supplier to China, Japan, and South Korea.

Agricultural land conversion for urban development

The lack of advanced technologies to combat plant diseases and environmental stresses discourages farmers and plantation owners from sustaining banana production. As a result, farmlands become unproductive and are increasingly converted for residential, industrial, or commercial use. With the country’s growing population driving demand for urban expansion, agricultural land is gradually being repurposed for non-farming purposes.

The only way to counter shrinking farmland is to increase banana yield per hectare. Achieving this requires sustained investment in research and innovation—particularly in fertilizer development, pest control, and modern farming techniques—to maximize production efficiency.

Higher costs in Philippine banana export

The cost of banana production in the Philippines is notably higher than in Vietnam. Labor costs in the Philippines is P608 to ₱645 per day, compared to ₱404 in Vietnam. Both countries import fertilizers from China, but Vietnam imports a larger share—$649 million or 44% of its total fertilizer imports, while the Philippines imports $514 million (40%). With Vietnam closer to China, importing fertilizers and exporting bananas to key markets like China, Japan, and South Korea are both cheaper. Beyond these financial disadvantages, ongoing geopolitical tensions between the Philippines and China further strain trade, adding another challenge for Filipino banana producers. These factors make Philippine banana export less competitive globally.

The challenges in Philippine banana exports underscore the need for innovation, policy support, and stronger global partnerships to sustain the country’s agricultural competitiveness. Addressing these issues today can create opportunities for future generations to thrive in agribusiness, trade, and technological advancements in agriculture.