Presentation prepared by Xinshen Diao, Paul Dorosh, Mia Ellis, Karl Pauw, and James Thurlow, all with the International Food Policy Research Institute, Washington, DC. This is part of the Global Crisis Country Series.

1. Version: 7 July 2022
The Philippines
Impacts of the Ukraine and Global
Crisis on Food Systems and Poverty
Xinshen Diao, Paul Dorosh, Karl Pauw, Angga Pradesha, and James Thurlow
International Food Policy Research Institute, Washington DC
These country studies are conducted by IFPRI with financial support from
BMGF, FCDO, and USAID. All studies use data and models developed with
ongoing support from BMGF, USAID and the CGIAR’s “Foresight and Metrics”
initiative. The Philippines study benefits from working with the National
Economic and Development Authority (NEDA), the Republic of the Philippines.
Xinshen Diao (x.diao@cgiar.org) |Paul Dorosh (p.dorosh@cgiar.org) |
Angga Pradesha (A.Pradesha@cgiar.org) | James Thurlow (j.thurlow@cgiar.org)

2. Version: 7 July 2022
Overview
• Series of country case studies
• Economywide modeling
• Capture world market shocks
• Estimate impacts on economy, agri-food
system, poverty, food security, etc.
• Simulate policy responses
• Three phases of analysis:
1. Initial data collection and impact assessment
2. Data revisions and analysis of broad policy options
• Cash transfers, food aid, and fertilizer subsidies
• Fiscal implications for national governments
3. In-country engagement and tailored policy analysis
Impact
assessment
Policy
analysis
Country coverage
Countries with IFPRI RIAPA models
May June
July

3. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations World Price Shocks
Source: World Bank Pink Sheets
Global data
11%
-13%
100%
56%
34%
88%
101%
Maize Rice Wheat Palm oil Crude oil Natural gas Fertilizer
Change in real world prices (June 2021 to April 2022)
30 Jun 2021 - 31 Jan 2022 31 Jan 2022 - 30 Apr 2022
30 Jun 2021 - 30 Apr 2022

4. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Supply and Demand
Supply
(% by source)
Demand
(% by use)
The Philippines data
Source: IFPRI Philippines RIAPA Model
84% 81%
16%
99%
19%
57%
Rice Wheat Edible oils Oil products
Imports
Domestic
38%
47%
97%
62%
47%
37%
16%
Rice Wheat Edible oils Oil products
Exports
Final use
Input use
+ Others = 100%
+ + +
3.4% 0.9% 0.8% 3.4%
Products’ share of the
value of total demand
throughout the economy

5. Version: 7 July 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Consumption Baskets
The Philippines data
Source: IFPRI Philippines RIAPA Model
10.6% 15.8%
9.3%
28.4%
8.8%
33.4%
42.5%
33.9%
59.9%
33.2%
56.0%
57.2%
65.9%
39.5%
66.7%
All households Rural Urban Poor Nonpoor
Composition of household consumption spending
Cereals & edible oils Other foods Non-food goods & services

6. Version: 7 July 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations Fertilizer Adoption Rate
Source: Estimates based on national experts’ assessments
Timing When is the fertilizer needed?
The Philippines data
54%
83%
54%
66%
65%
67%
58%
79%
80%
95%
46%
46%
52%
Maize
Rice
Wheat
Oilseeds
Cassava
Irish potatoes
Sweet potatoes
Vegetables
Sugarcane
Tobacco
Bananas
Other fruits
Rubber
Share of cultivated land using fertilizer

7. Version: 7 July 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations
Crop Calendar
Source: Department of Agriculture, the Philippines
Timing When is the fertilizer needed?
Planting for Philippines’s main 2022 season is already
underway
The Philippines

8. Version: 7 July 2022
Results | GDP and Employment
• National GDP and employment decline
• Negative terms-of-trade shock
(i.e., negative effect of higher import prices outweighs positive
effect of higher export prices)
• Rising import costs reduces spending on
domestically produced goods
• Falling production leads to job losses
• Impacts occur throughout the economy
• Agri-food system GDP and employment fall more
• Larger GDP declines in both primary agriculture
and off-farm agri-food sectors (equal to 21% and
59% of overall GDP losses in the country
respectively)
• Larger employment declines in off-farm agri-food
sectors
• Outside of the agri-food system, GDP losses are
modest while job losses are large (60% of total job
losses), because the negatively affected
nonagricultural sectors are often labor intensive
Source: IFPRI Philippines RIAPA Model
Contribution to total change
GDP
Jobs
-0.5%
-1.5%
-1.2%
-1.7%
-0.1%
-2.3%
-2.5%
-0.4%
-5.5%
-2.2%
-6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Change in GDP and employment due to
food, fuel and fertilizer shocks (%)
GDP Employment
21%
59%
20%
Agriculture
Off-farm
Outside AFS
4%
35%
61%

9. Version: 7 July 2022
Results | Drivers of GDP Losses
• Fuel and fertilizer shocks drive most of the decline in
national GDP
• Agri-food GDP losses mostly driven by fertilizer shocks
• Fertilizer directly affects primary agricultural production
• Disrupts downstream processing via supply chains
• Off-farm agri-food GDP losses also due to the higher food
prices that raise the cost of food processing and agri-food
related services and reduce their production
• GDP losses outside the agri-food system driven by
higher fuel prices
• Higher transaction costs
• Lower consumer demand
Source: IFPRI Philippines RIAPA Model
Contribution
to change
-0.4%
0.2%
-0.6%
-0.3%
-0.1%
-0.2%
-0.3%
-0.2%
-1.0%
-1.4%
-0.9%
-0.5%
-1.5%
-1.2%
-1.7%
-0.1%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Percentage change in real GDP due to food, fuel
and fertilizer shocks (%)
Food prices Fuel prices Fertilizer prices & response
8%
53%
40%
Notes: About 60 percent of the effect on agriculture GDP under “fertilizer prices and response” is directly from rising fertilizer,
while the remaining 40 percent are from the productivity shock caused by lowering the use of fertilizer.

10. Version: 7 July 2022
Results | Household Consumption
Source: IFPRI Philippines RIAPA Model
• Household consumption falls significantly
• Larger than GDP losses as households are hit twice by rising
prices and falling incomes
• Larger impact from food price shocks on consumption losses
than for GDP losses
• Importance of shocks differs across population groups:
• Fuel shocks important for all households and more so for
urban households
• Earn more income outside the agri-food system
• More import-intensive consumer basket
• Consume products with larger transaction cost margins
• Fertilizer shocks more important for rural and poor
households
• Rely more on farm incomes
• Consume more domestically-produced foods
• Food prices affect all households similarly
• Poor households affected much more by all the three shocks
Contribution
to change
-0.7%
-0.6%
-0.8%
-0.9%
-0.6%
-1.3%
-1.2%
-1.4%
-1.6%
-1.2%
-0.7%
-1.0%
-0.6%
-1.5%
-0.6%
-2.7%
-2.7%
-2.7%
-4.0%
-2.5%
National
Rural
Urban
Poor
Nonpoor
Percentage change in real consumption
Food prices Fuel prices Fertilizer prices & response
25%
48%
27%

11. Version: 7 July 2022
Results | Changes in Inequality
• Differential effects on poor/nonpoor households are
driving changes in inequality:
• Fuel shocks cause larger consumption losses for
households in the top quintile
• Fertilizer shocks affect lowest quintile much more than
top quintile
• Food prices have similar impact across the income
distribution with slightly smaller effect on the top quintile
• Overall, inequality rises
• Much larger consumption losses for poorer households in
Quintile 1-3, leading to increase in inequality
Source: IFPRI Philippines RIAPA Model
-4.5%
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
Q1 Q2 Q3 Q4 Q5
Percentage change in quintile consumption
Food prices
Fuel prices
Fertilizer prices & response
Combined food, fuel and fertilizer shocks

12. Version: 7 July 2022
Share of population
falling into poverty
Results | Poverty
• Poverty rises significantly
• Headcount rate up 2.3% points
• 2.4 million more people pushed into poverty
• Larger increase in poverty in rural areas
• 55% of expanded poor population
• Larger increase in rural poverty headcount
rate
• Initial rural poverty level already much
higher than urban poverty
• Three shocks all drive the rise in poverty
with fuel shock more important
Source: IFPRI Philippines RIAPA Model
Contribution
to change
0.6%
0.6%
0.5%
1.0%
1.1%
1.0%
0.7%
0.5%
0.8%
2.3%
2.1%
2.4%
National
Urban
Rural
Change in poverty headcount rate (%-point)
Food prices Fuel prices Fertilizer prices & response
607
318
295
1,114
536
583
720
235
474
2,441
1,089
1,352
National
Urban
Rural
Change in poor population (1000s)
Food prices Fuel prices Fertilizer prices & response
25%
46%
29%
45%
55%
Urban
Rural
Notes: About 39.5% of the country’s population have adult equivalent consumption levels that fall below the US$1.90 poverty
line. The poverty rate is higher in rural, about 54.6%, than in urban, about 20.0%.

13. Version: 7 July 2022
• Food, fuel and fertilizer shocks together increase the cost
of a healthy reference diet
• Reference diet is the EAT-Lancet’s “healthy” diet thresholds for
the six major food groups
• Rising prices for edible oils (in added fats) and maize and
wheat prices (in staples) increase the cost of the
recommended healthy diet for added fats and staples, while
falling incomes reduce demand for fruits, dairy and proteins
(meats & fish), and thus lower their costs slightly
• The combined price and income effects lead to the real cost of
a health reference diet up by 4.7%
Results | Diet Quality
Source: IFPRI Philippines RIAPA Model
• Rising prices and falling incomes cause diet quality to worsen for
many households
• Prior to the crisis, few households had consumption levels and diversity
needed for a healthy diet
• Rising food prices are more important for diet quality deterioration
than for GDP losses; together with other two shocks, 2.2 million people
become deprived in at least one additional food group for a health diet
• Urban population accounts for more of the deterioration in diet quality,
reflecting the fact that rural households already suffer more food
deprivations than urban households prior to the shocks, thus with little
scope for a further increase in food deprivations
4.7%
0.5%
-0.3%
4.6%
Net change in
cost of healthy
diet
Contributions of
food groups to
change
Change in the real cost of a healthy
reference diet caused by rising world
prices (%)
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
15.8%
19.1%
23.3%
19.4%
11.8%
10.6%
Shares of six food groups in
total cost of a healthy diet
prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
1,163
719
445
329
154
174
728
376
352
2,220
1,250
971
National
Urban
Rural
Number of people to become deprived in at least one
additional food group for a healthy diet (1000s)
Food prices Fuel prices Fertilizer prices & response

14. Version: 7 July 2022
Headlines
• Food, fuel and fertilizer shocks lead to large reductions in
GDP and employment in Philippines
• Agri-food system adversely affected, alongside the broader
economy
• Agriculture is particularly at risk to fertilizer shocks, esp. if it
leads to lower fertilizer use in the current season
• Poor households are especially vulnerable
• Larger income losses among poor households
• Greater increase in poverty (esp. number of poor people)
among rural households
• Larger contribution to the deterioration in diet quality from
urban population
• Next steps
• Evaluate policy options available to governments and
development partners to mitigate impacts on food systems,
poverty, and food insecurity (e.g., cash transfers, food aid,
fertilizer subsidies, fiscal support, etc.)
Impact
assessment
Policy
analysis
Country coverage
May June
July