1. The public conversation about the Iran war has focused almost entirely on fuel prices and electricity bills. But there is a second crisis building in the background that is slower to manifest and potentially more damaging in the long run: the collapse of global fertilizer supply through the Strait of Hormuz. The Strait is not only the world’s most critical oil chokepoint. It is also the passage through which roughly 30 percent of internationally traded fertilizers move, including urea, ammonia, phosphates, and sulfur, most of them produced in Saudi Arabia, Qatar, the UAE, and Iran. Since the war began, the FAO estimates that the disruption has stalled approximately three to four million tonnes of fertilizer trade per month. Urea, the most widely traded nitrogen fertilizer and the one most directly tied to rice yields, has surged from around USD 482 per metric ton before the war to approximately USD 700 per metric ton, a nearly 45 percent increase in weeks. The food security consequences of this will not be felt immediately. They will arrive with a delay of six to nine months, precisely when the next planting season is under stress.
2. The Philippines’ direct exposure to Middle Eastern fertilizer is lower than that of its neighbors. MUFG estimates that the Philippines imports only about 7 percent of its fertilizers directly from the region, compared to 40 percent for India and 34 percent for Thailand. But this understates the real risk, because the Philippines is critically dependent on rice imports from precisely those neighbors. If India and Thailand face fertilizer shortages that reduce their rice harvests, their governments will restrict exports to protect domestic supply, as Thailand and Vietnam are already signaling. The Philippines consumed an average of 37,000 metric tons of rice per day in 2025, and the National Food Authority (NFA) currently holds a buffer stock assessed at roughly 10 days of supply as of mid-March 2026, against a recommended buffer of at least 30 days. The country entered this crisis with one of the thinnest rice reserves in the region, and the fertilizer shock now threatens the import pipeline that makes up for domestic production gaps.
3. The fertilizer sector in the Philippines operates under a liberalized regime that is poorly equipped to respond to a supply shock of this magnitude. The Fertilizer and Pesticide Authority (FPA), created under Presidential Decree No. 1144 of 1977 and attached to the Department of Agriculture (DA), has the mandate to assure adequate supplies of fertilizer at reasonable prices. But the FPA’s price-setting function was effectively abandoned in 1986 as part of the government’s trade liberalization program, and it has not been restored by legislation. The FPA itself acknowledges that it cannot regulate and control fertilizer prices under the current legal framework. Quantitative restrictions on importation were also removed in 1986, and the Agriculture and Fisheries Modernization Act (AFMA, Republic Act No. 8435) subsequently allowed duty-free importation of fertilizer by enterprises engaged in agriculture. The result is a market that functions well in ordinary times, when competitive global supply keeps prices in check, but that has no price control mechanism and no strategic buffer reserve to draw on when that supply collapses.
4. PD 1144 does have one emergency clause that could be activated in the coming months. The FPA is empowered to impose restrictions and controls in cases of extraordinary and unreasonable increases in pesticide prices, and the same broad mandate to assure adequate supplies at reasonable prices applies to fertilizers. In an acute supply crisis, the DA and the FPA could argue that this residual mandate authorizes emergency procurement, government importation, or directed allocation of available stocks, analogous to what Section 14(e) of the Oil Deregulation Law authorizes for petroleum products (discussed in our Oil and Power Advisory No. 004). Whether this argument holds up against a constitutional challenge, given the 1986 deregulation and the absence of a specific statutory delegation of price control authority in the post-1986 framework, is genuinely uncertain. The more defensible legal path for the government is to act through the appropriations process, using public funds to subsidize fertilizer procurement by the Philippine Crop Insurance Corporation (PCIC) or through DA-administered input support programs, rather than attempting direct price control.
5. On the side of rice production, the legal framework is more developed. Under the amended Rice Tariffication Law (Republic Act No. 12078), the DA Secretary, upon the recommendation of the National Price Coordinating Council (NPCC), is authorized to declare a food security emergency in response to a supply shortage or an extraordinary increase in rice prices. During such an emergency, the DA may direct the NFA to release its buffer stocks to government agencies, local government units, and Kadiwa outlets for sale to the public. The DA exercised this power in February 2025 in response to elevated rice prices, releasing NFA stocks at P33 per kilogram to LGUs for resale at P35 per kilogram. That experience also exposed the mechanism’s limitation: the NFA’s buffer stock is structurally thin, the bureaucratic process of getting LGUs to actually pull out and distribute the rice is slow, and the declared emergency does not by itself address the upstream problem of supply shortage in the import market. A fertilizer-driven reduction in regional rice production would require a far more aggressive response than the 2025 declaration contemplated.
6. The legal and policy actions that matter most right now are not the ones being discussed publicly. While attention is fixed on pump prices and electricity bills, the government should be urgently securing fertilizer stocks before the planting season and before prices rise further, negotiating government-to-government rice supply agreements to insulate the Philippines from the export restriction risk of its main supplier countries, accelerating the capitalization of the Rice Competitiveness Enhancement Fund (RCEF) for seed and input subsidies, and exploring whether emergency procurement authority under EO 110 or its follow-on orders can be extended to cover agricultural inputs as well as fuel. The Philippine history of the 1972 to 1973 oil crisis, which produced a fourfold drop in rice production, was the original reason the Fertilizer Industry Authority was created in the first place, with sweeping price and supply control powers. That crisis is the direct ancestor of the current one. The lesson it taught, that a fuel crisis and a fertilizer crisis and a food crisis are not three separate events but one cascading event, is the lesson the current legal framework is least prepared to apply.
Geronimo Law advises clients on energy regulation, oil and power law, DOE and ERC proceedings, and energy contracting. For inquiries, contact us at attorney@geronimo.law, +63 9999329836, or through www.geronimo.law. We are located at 6/F Valero One Center, Valero St., Salcedo Village, Makati City.
This advisory is for general information only and does not constitute legal advice. Consult counsel for advice on specific situations.
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