Philippine Cacao Industry Roadmap
Philippine Cacao Industry Roadmap
CACAO
INDUSTRY
ROADMAP 2021-2025
PHILIPPINE
CACAO
INDUSTRY
ROADMAP 2021-2025
Department of Agriculture
HIGH VALUE CROPS
DEVELOPMENT PROGRAM
The Philippine Cacao Industry Roadmap (2021-2025)
No part of this publication may be reproduced, distributed, or transmitted in any form or by any
means, including photocopying, recording, or other electronic or mechanical methods, without
the prior written permission of the Coordinating Office, except in the case of brief quotations
embodies in critical reviews and certain other noncommercial uses permitted by copyright law.
Editorial correspondence and requests to publish, reproduce or translate this publication in
part or in whole should be addressed to the authors and the publisher.
Published by:
Coordinating Office:
ii
PHILIPPINE CACAO INDUSTRY ROADMAP
DEVELOPMENT TEAM
Team Leader
Consul Armi Lopez Garcia, Philippine Cacao Industry Council
Co-Team Leader
Ms. Josephine Ramos, OPTIONS, Inc.
Industry Experts
Ms. Sylvia Ordoñez, PCIC Vice-Chair, Luzon Island Representative
Mr. Buen Mondejar, PCIC Vice-Chair Visayas Island Representative
Mr. Christopher Lindo, PCIC Vice-Chair Mindanao Island Representative
Dr. Romulo Cena, USM
Mr. Dante R. Muyco Jr., Chokolate de San Isidro, Inc.
Ms. Magel Bacalso. KIDLAT MPC
Mr. Pedro Cruz, CIDAMI
Mr. Simon Bakker, Kennemer Foods International
Mr. Sherwin Paul Barrameda, Aurora Cacao Agricultural Cooperative
Chef Jill Sandique
iii
Representatives from the Government Sector
Undersecretary Evelyn G. Laviña, DA HVCRC
Ms. Judy Anne Placido, DA HVCDP
Ms. Asther Paglinawan, DA BPI
Mr. Noli Garcia, DA BPI
Mr. Bernardo Pascua, DA BSWM
Ms. Angelica L. Ecito, DA BSWM
Ms. Jonalyn Villasis, DA ATI
Mr. Manuel Dimalaluan, DA ATI
Engr. Critsy Cecilia Polido, DA BAFE
Engr. Denver Camania, DA BAFE
Ms. Leonora Gabriel, DA AMAS
Ms. Loredie De Jesus, DA AMAS
Mr. Manuel Corinas, DA PCIC
Ms. Joan Basay, DA ACPC
Ms. Michelle Imperial, DA ACPC
Mr. Joseph Manicad, DA PMS
Mr. Alexander Estoesta II, DA PMS
Ms. Faustina Baradas, DOST-PCAARRD
Technical Writers
Ms. Mayla Viray-Blaskie
Ms. Ethel Reynda Calivoso
iv
TABLE
OF CONTENTS
TABLE OF CONTENTS v
LIST OF TABLES vii
LIST OF FIGURES viii
LIST OF APPENDICES ix
ACRONYMS x
MESSAGES xii
FOREWORD xiv
PREFACE xv
EXECUTIVE SUMMARY 1
INTRODUCTION 5
Rationale 5
Objectives 6
Definition of Terms 7
INDUSTRY SITUATION AND OUTLOOK 9
Product 9
Product Forms 10
Cacao Production 13
Consumption 20
Trade (Import and Export) 22
Prices 26
v
ANALYSIS OF THE COMMODITY INDUSTRY 29
Value Chain Analysis 29
SWOT Analysis 41
Cost and Return Analysis 44
Benchmark Analysis 51
Competitive Analysis 54
MARKET TRENDS AND PROSPECTS 57
Local 57
International 58
PRIORITY CONCERNS & OPPORTUNITIES / 61
CONSTRAINTS & OPPORTUNITIES
TARGET SETTING 64
RECOMMENDATIONS FOR POLICIES, STRATEGIES, 67
AND PROGRAMS
Development Directions and Upscaling Strategies
67
Cacao Industry Action Plans
68
INDUSTRY CLUSTER GOVERNANCE NETWORK
77
REFERENCES
81
APPENDICES
83
vi
LIST OF TABLES
Table 1. Top Cacao Producing Provinces in the Philippines 15
Table 2. Planting Materials Distributed per Government Program 16
Table 3. Volume of Production and Area Planted/Harvested 17
Table 4. Utilization of Cacao in the Philippines from 2010 to 2019 20
Table 5. Volume and Value of Export and Import of Cocoa Products 23
in Thousand Metric Tons, CY 2020
Table 6. Value of Imports of the Top Cocoa-Importing countries, 24
2016-2020
Table 7. Value of Philippine Cacao Imports by Country of Origin 25
(US $) 2016- 2020
Table 8. Cacao Industry Value Chain Map 32
Table 9. Agricultural Credit Programs 39
Table 10. SWOT Analysis of the Philippine Cacao Industry 42
Table 11. Costs and Returns per Hectare as Intercrop 45
(600 trees per hectare)
Table 12. Costs and Returns per Hectare as Monocrop 48
(1,100 cacao trees per hectare)
Table 13. Farmers’ Assessment of the Effect of the Current Practices 52
on Income and Environment with Proposed Solutions
and Intervention Approach
Table 14. Financial Requirement for Cacao Production 66
Table 15. The Philippine Cacao and Chocolate Industry Action Plan 69
vii
LIST OF FIGURES
Figure 1. Map Showing the Major Production Areas 13
of Cacao in the World
viii
LIST OF
APPENDICES
Appendix 1. Agro-Climatic Requirements for Growth 84
and Development of Cacao
ix
ACRONYMS
ACPC Agricultural Credit Policy Council
ASEAN Association of Southeast Asian Nations
BAFS Bureau of Agriculture and Fisheries Standards
BIST Business Innovation through Science and Technology
BPI Bureau of Plant Industry
CIDAMI Cacao Industry Development Association of Mindanao
CPB Cocoa Pod Borer
CRADLE Collaborative Research and Development to Leverage Philippine Economy
DA Department of Agriculture
DA-HVCDP Department of Agriculture – High Value Crops Development Program
DA-RFOs Department of Agriculture –Regional Field Offices
DAR Department of Agrarian Reform
DENR Department of Environment and Natural Resources
DOST Department of Science and Technology
DTI Department of Trade and Industry
FFC Fine Flavoured Cocoa
GAP Good Agricultural Practices
ICT Information Communication Technology
KFI Kennemer Foods International
LGU Local Government Unit
MCDC Mars Cocoa Development Center
MinSAAD Mindanao Sustainable Agrarian and Agriculture Development
MPEX Manufacturing Productivity Extension Program
MRP Manufacturing Resurgence Program
x
NCITWG National Cacao Industry Technical Working Group
NGO Non-government Organization
NICER Niche Centers in the Regions for R&D Program
NSIC National Seeds Industry Council
NSO-FTS National Statistics Office – Foreign Trade Statistics
PAPs Programs, Activities, and Projects
PCA Philippine Coconut Authority
PCAARRD Philippine Council for Agriculture, Aquatic,
and Natural Resources Research and Development
PCIA Philippine Cacao Industry Association
PCIC Philippine Cacao Industry Council
PhilMECH Philippine Center for Postharvest Development and Mechanization
PSA Philippine Statistics Authority
RDLead Research and Development Leadership
SBC Small Business Corporation
SETUP Small Enterprise Technology Upgrading Program
UPLB University of the Philippines – Los Bańos
USM University of Southern Mindanao
VCA Value Chain Analysis
VSD Vascular Streak Dieback
xi
MESSAGE
In the wake of unprecedented events and emerging
crises, the Department of Agriculture (DA) launched the
Plant, Plant, Plant Program to ensure that all Filipino
families would have adequate supply of nutritious,
healthy, accessible and affordable food to meet the
demands of these challenging times.
In light of this, I wish to congratulate all the principal actors who paved the way for the crafting and
updating of High Value Crops Development Program (HVCDP) Roadmap. Through the completion
and publication of this HVCDP Roadmap, we enshrine the spirit of excellence, collaboration, and
resilience as inherent characteristics of our agricultural inheritance and legacy.
The progressive cross-cutting and continuing collaboration among all stakeholders in pursuit of
attaining competitive advantage and relevant growth is an output designed into the pages of this
roadmap.
I am proud and grateful that such a focused work on this commodity could be undertaken to
ensure that a brighter future for the industry can reasonably be expected and attained because this
blueprint already exists to assure it.
x ii ii
x
MESSAGE
In
ThethePhilippine
wake of unprecedented
coffee and cacao events
industries
and emerging
play a
crises,
fundamental
the Department
role in theof socio-economic
Agriculture (DA) advancement
launched the
Plant,
of our Plant,
country Plant
as they
Programcreatetoemployment
ensure that all opportunities
Filipino
families
and promotewouldahave
culture
adequate
of qualitysupply
for local
of nutritious,
products that
healthy,
highlightaccessible
the professionalism
and affordable of ourfood
people
to meet
and the
services.
demands
With coffee of and
these cacao
challenging
consideredtimes.
high-value crops
and emerging agriculture products in the country, it is
As a imperative
testament of ourwe firm resolvetheto triumph over
only that bridge various gaps in this
our
formidable foe, the DA was re-energized to act as one,
supply chain towards a more responsive and globally-
but is committed
coffeeatand
the cacao
same time to delivering results
competitive industries.
from various projects under the different major programs
of
Throughout
the Department.
the years, the Department of Agriculture
(DA) has been an invaluable and dedicated partner of the
In light of this,
of ITrade
wish to congratulate all the principal actors who pavedwith the
the way for the crafting and
Department and Industry (DTI) in this endeavor. Together commitment of industry
updating of High Value Crops Development Program (HVCDP) Roadmap. Through the completion
organizations and the participation of our private sector partners and stakeholders, our combined
and publication ofunified
this HVCDP
actionRoadmap, we enshrine thelevels
spirithave
of excellence, collaboration, and
efforts for a more at the national and local provided enabling mechanisms
resilience as inherent characteristics of our agricultural
that empower and support the long-term development of farmers. inheritance and legacy.
The
The progressive cross-cutting
updated Philippine Coffeeand
andcontinuing collaboration
Cacao Industry Roadmapsamong
serveallasstakeholders in pursuit of
guides in improving
attaining
productioncompetitive advantage
while ensuring and
that the relevant industries
respective growth is an
areoutput designed into
cost-competitive, the pages
aligned of this
with global
roadmap.
quality standards, reliable and environment-friendly, and will provide sustainable benefits to farmers,
Iprocessors, traders,
am proud and and that
grateful exporters.
such a These, inwork
focused turn, on
willthis
accelerate the growth
commodity could be ofundertaken
the agriculture
to sector
as we address issues on food security, economic prosperity, and social inclusion for micro,
ensure that a brighter future for the industry can reasonably be expected and attained because thissmall, and
medium enterprises
blueprint (MSMEs).
already exists to assure it.
As we strengthen
Marami and at
pong salamat position the Philippine brand of coffee and cacao on the global stage, let
Mabuhay!
us remain steadfast in charting realistic, responsive, and strategic actions in promoting our local
produce so that we may be able to secure the sustainable and inclusive growth of our industries and
provide a more comfortable life for all Filipinos.
xx ii ii ii
FOREWORD
The Covid-19 pandemic that ravaged life and livelihood
in the country for almost 2 years now proved to be an
existential threat to our way of life. On the positive side,
it elicited generosity and a sense of community in all of
us, and became a catalyst of change in many areas of our
lives.
This roadmap is envisioned to serve as a guide to all industry stakeholders for the realization of
the targets set in it for 2021 – 2025. It is an embodiment of how the industry will achieve its goals
of transformative growth through the value chain approach, as well as increase in quality and
sustained yields and incomes. It is with pride and pleasure that I express my heartfelt gratitude to
everyone both in the private sector and government, who unselfishly lent their time and talent for
this timely and necessary endeavor. More than the lofty legacy and memorable milestone we shall
leave behind because of this worthwhile work, it is more the comfort in the knowledge that the
entire industry would have a clear pathway to follow in the years ahead to realize its vision that is
truly more meaningful to remember us all by. Thank you.
EVELYN G. LAVIÑA
Undersecretary for High Value Crops and Rural Credit
Department of Agriculture
xiv
PHILIPPINE CACAO INDUSTRY COUNCIL
“A Competitive and Sustainable Philippine Cacao Industry”
[email protected]
MESSAGE OF SUPPORT
PREFACE
Big Congratulations are in order to all high value crops stakeholders in cacao, coffee,
mango, banana, vegetables and onions who have successfully updated the
commodity roadmaps of the country.
Big Congratulations are in order to all high value
crops stakeholders in cacao, coffee,mango, banana,
The updating
vegetablesofand
theonions
high value cropsuccessfully
who have roadmapsupdated
addresses the major challenges of our
food and agricultural
the commodity sustainability
roadmaps in the light of climate change and other natural
of the country.
calamities that hit most of our regions in recent memories. We have actively worked
on a unified strategic
The updating of theinitiative
high valuewith
cropthe premise that agriculture should be a positive
roadmaps
contributor to food security, jobs creation and economic opportunities and
addresses the major challenges of our food and
agricultural sustainability in the light of climate change
environmental sustainability.
and other natural calamities that hit most of our
regions in recent memories. We have actively worked
As head of the strategic
on a unified Philippine Cacao
initiative withIndustry
the premiseCouncil
that and being an active lead and
participant of theshould
agriculture cacaobeindustry
a positivecluster discussions,
contributor this particular
to food security, roadmap
jobs creation including
and economic
the rest of the updated roadmaps have outlined the different industry-appropriate
opportunities and environmental sustainability.
frameworks for action to implement multi-stakeholders’ solutions that are directly tied
to ourAsnational
head of the Philippine Cacao Industry Council and being an active lead and participant
agricultural development priorities.
of the cacao industry cluster discussions, this particular roadmap including the rest of the
updated roadmaps have outlined the different industry-appropriate frameworks for action
Thesetoagricultural roadmaps have carried
implement multi-stakeholders’ solutionskey
thatmessages
are directly that
tied the private
to our sector
national which
agricultural
most development
of us are ablypriorities.
represented in these industry clusters are able and ready partners
and driver of solutions for responsive and sustainable agriculture. Laying down the
ground works
These with government
agricultural and carried
roadmaps have privatekey
sector partners
messages andprivate
that the effective government
sector which most
leadership is an active ingredient for success.
of us are ably represented in these industry clusters are able and ready partners and driver
of solutions for responsive and sustainable agriculture. Laying down the ground works with
government and private sector partners and effective government leadership is an active
We do hope and
ingredient pray that these roadmaps will encourage many others to initiate
for success.
action and strengthen collaborative engagements to achieve our shared goals for
sustainable future.
We do hope and pray that these roadmaps will encourage many others to initiate action
and strengthen collaborative engagements to achieve our shared goals for sustainable
future.
xv
EXECUTIVE SUMMARY
The crafting of the revised Philippine Cacao and Chocolate Industry was necessitated to
realign its vision, mission, goals, strategies and interventions with the Philippine Republic
Act 8435 (Agriculture and Fisheries Modernization Act of 1997), the United Nation’s
Sustainable Development Goals (UN SDGs), the AmBisyon Natin 2040, the Philippine
Development Plan (PDP) and the proposed Philippine Cacao Industry Development
Act”. This revised roadmap contains new strategies and interventions as well as retain
some Action Plans in the 2017-2022 Philippine Cacao Industry roadmap that are deemed
relevant and doable but need more push in its implementation. Two of the major revisions
made in the existing roadmap are (1) the vision spells out the focus on building strong
Philippine branding and (2) anchor the strategies and interventions on the principle of
industry clustering, localization and market demands, as well as heightening a context of
inclusivity in its scoping and application.
Based on PSA data, the Philippine cacao has a slow but increasing production trend
with an average increase of 2,743 ha per year from 2013 to 2020. Such increase may be
attributed to area expansion and the seed/seedling dispersal programs of DA, DENR and
PCA. However, despite the increasing trend in production, supply still fall short to meet
the increasing market demand domestically and globally. Low productivity is due to high
mortality of planting materials and the lack of knowledge of cacao growers.
1
Like most countries that grow cacao, majority of the cacao farms in the country are small
holdings and are being owned and managed by farmers. Thus, the need for localization
and clustering.
Based on the Food and Agriculture Organization survey in 2017, the Philippines is placed
24th among the top countries producing cacao beans. However, the country placed 72nd
in terms of exports with a global market share of less than 0.01%.
The Philippines is a net importer of cacao with an average of USD 168.3-M worth of
import but with only USD 22.1-M export value. The large import of cocoa powder and
export value of chocolate is being credited to major chocolate manufacturers in the
country who seldom buy local cocoa beans. Instead, they use imported powder and
cocoa butter for their raw materials.
Based on the recent Philippine Cacao Industry forum, the Philippines has an estimated
global demand of about 4.7 million to 5 million metric tons (MT) by 2020. Nonetheless,
a cocoa shortage is also predicted at 1 million metric tons (MT). The annual local
consumption is at 50,000 metric tons (MT) but the local supply is only around 10,000
metric tons (MT).
With the Philippines’ location conducive for cacao production and accessible to domestic
and foreign trade, there is a heightened interest among local farmers and exporters to
push for a more dynamic and competitive cacao industry that can compete with other
major cacao-growing nations.
Moreover, the presence of players from all stages in the cacao value chain places the
Philippines at a competitive edge. Another strength of the industry are the support
services provided by the enablers in the form of technical and financial interventions,
which facilitate the development and strengthening of the industry. Furthermore, the
convergence of government support programs and projects touches various levels of
the cacao industry value chain and is expected to transform and empower cacao farmers
into thriving cocoa communities, which are the essential foundation for sustainable cocoa
farming.
2 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Where do we want to go?
To be globally competitive and sustainable cacao industry, efforts should be geared
towards the following:
f. Stronger participation in the global cacao and chocolate value chain by building/
promoting Philippine Brand.
This revised roadmap is a product of the collective efforts of the cacao stakeholders.
Series of meetings and consultations were conducted in crafting this roadmap. This
revised roadmap will serve as a guide in the implementation of interventions and the
close monitoring of Action Plans. All the stakeholders who participated in crafting this
roadmap made a commitment to continue working together to ensure that the short-term
goals will be achieved and the medium- and long-term goals be realized.
4 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
INTRODUCTION
Rationale
In the recent National Food Security Summit (NFSS), the importance of engaging a wide
range of stakeholders in the agriculture value chain was realized as timely feedback
can be obtained through them. The updating of the Philippine Cacao and Chocolate
Industry Roadmap is aligned in such modality and complies with the Memorandum Order
No. 37, Series of 2021 by the Office of the Secretary of the Department of Agriculture.
This revised roadmap gives emphasis on the active participation of all stakeholders
especially the private sector, and stresses the need for a Unified Action at the national
and local level. The significance of harmonizing all efforts from production to marketing
at the regional and local level was further elaborated in its strategies and Action Plans.
Hence, this updated roadmap will serve as a guide in improving production as well as
strengthening and positioning the Philippine brand of cacao and chocolate industry to be
globally competitive.
But why invest in Cacao? Basically, cacao may significantly contribute to poverty
alleviation and inclusive growth through livelihood and job generation. This is because
cacao production only requires a small monetary investment or start-up capital. This
explains why 90% of the growers are of small farm holdings. The suitability of cacao as an
intercrop for coconut and banana, the two-week harvest interval, and an early gestation
period of 18 months are some of the most valued advantages of this high value crop.
The early return of investments and high profitability of the product also ensure good
income augmentation potential. Moreover, cacao is considered one of the world’s most
valuable crops. It is a multi-million-dollar industry that has an increasing global and
domestic market demands. Above all, the industry is market-driven considering that
cacao has no product substitute. The gaining popularity of cacao products not only in
the chocolate industry but also in cosmetics and pharmaceutical industries could not
be over-emphasized. Hence, cacao’s diversified usage as food and non-food warrants a
sustainable market opportunity.
5
On the other hand, cacao industry also faces some hurdles and challenges that need to
be addressed as shortage of supply due to low productivity has been observed. This is
one of the reasons why an updated roadmap needs to be crafted.
Following the guidelines set in the Philippine Republic Act 8435 (Agriculture and Fisheries
Modernization Act of 1997), the United Nation’s Sustainable Development Goals (UN
SDGs), the AmBisyon Natin 2040, the Philippine Development Plan (PDP), and the One
DA Reform Agenda: Key Strategies along with addressing the issues and constraints
raised by stakeholders, this updated roadmap will outline how the Philippines may
address the following challenges:
a. At the regional level, crafting harmonized production and postharvest protocols and
strengthening technical support to ensure that Good Agricultural Practices (GAP)
leading to excellent cacao bean quality is adopted;
b. At the national level, improving farm productivity and efficiency to increase farmer’s
income;
Objectives
The general objectives of this roadmap are to harmonize the production and postharvest
practices of cacao growers and to establish Philippine brand in the global market. To
achieve these objectives, interventions will be focused on the following directions:
• Expansion of production areas in areas suitable for cacao growing based on the
Climate and Soil Suitability Map
6 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Moreover, the strategies and Action Plans are geared towards meeting the following
specific objectives:
Definition of Terms
• Agri-preneurship – refers to the application of the principles of entrepreneurship to
agriculture.
• Intercropping – refers to growing two or more crops in the same field at the same
time
• One Sector-One Voice – strengthening PCIC/PCIA to serve as the voice of the Cacao
Industry
• Quality planting materials – grafted and scions coming from certified mother
trees; planting materials asexually propagated using propagules/scions from NSIC
registered cacao trees.
• Single-origin chocolates - are made from cocoa beans produced in a specific country,
region or even a specific plantation. Due to the climate and soil, together with the
techniques of cacao farming and harvesting, origin chocolates have its own signature
flavor profile.
• Supply chain – refers to the network of individual and/or organizations from the
delivery of raw materials from the supplier to the manufacturer until the product’s
delivery to the end user.
• Value chain – characterizes the full range of activities necessary to create a product or
service, which allows businesses to determine competitive opportunities.
8 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
INDUSTRY SITUATION
AND OUTLOOK
Product
Theobroma cacao, the scientific name of Cacao, literally translates as “food of the gods”
in Greek. The name Theobroma cacao was first given to the cocoa tree by Carolus
Linnaeus – the Father of Modern Day Taxonomic Plant Classification. Cacao is the Mayan
root word to describe the tree and its product. It is grown mainly for its seeds known as
the cocoa beans which are used to make cocoa mass, cocoa powder and chocolate.
In the Philippines, there are three major cultivar groups being grown by farmers. Each
cultivar possesses its unique properties and qualities. These cultivars are:
The Criollo is considered as the most prized, rare and expensive variety. It is native
to Central and South America. It is believed that the first cacao seed planted in the
Philippines was the Criollo variety brought via the Acapulco-Manila Galleon Trade
in 1670. Only 5% of the world’s cacao production is Criollo because it is extremely
susceptible to pests and diseases, thus difficult to grow. The beans are white to pale pink
in colour and recognized as a superior quality, less bitter and more aromatic. Considered
as the “Prince of Cocoas,” Criollo is an ingredient in premium chocolates.
The Forastero, a native of the Amazon basin, is the most versatile variety and most
commonly grown cocoa. It is mainly grown in Africa, Ecuador and Brazil and accounts
for 80% of the world’s cocoa supply. It is significantly harder, disease resistant and high
yielding. Beans are purple-coloured and mainly used to give chocolate its full-bodied
flavor. They have bitter taste, thus often blended with superior cocoas.
The Trinitario, a crossbreed variety of Criollo and Forastero, combines the best qualities of
the two varieties: the hardiness and high yielding traits of Forastero and the refined taste of
Criollo. It is the predominant fine flavour cocoa and is being used in about 10% of the world
9
cacao supply. Trinitario can be found in all the countries where Criollo cocoa was once grown
including Southeast Asia and the Philippines. About 70% of Philippine production is Trinitario.
The soil and water composition differ in different locations, thus identical varieties of
cacao may taste differently. Like wine sources, cacao bears the distinct flavor of the land
where it originates.
Cacao is said to be a non-self-pollinating plant thus scientists and industry experts are
recommending to have at least 3-5 clones in one farm site to facilitate pollination. In
the Philippines, there are 13 approved varieties/clones registered in the National Seeds
Industry Council, to wit: UF 18, BR 25, K 1, K 2, PBC 123, K 9, ICS 40, UIT 1, DR 1, P 7, S
5, USM Ch 1 and USM Ch 2. Of these major clones, six (6) are prevalently used, namely:
UF18, PBC123, BR25, K1, K2 and K9. Among the six clones, UF18, BR25 and PBC123 are
seen to have high performance and great potentials in the market. These clones possess
the following traits: early maturing, early fruit-bearing, high-yielding, high fat content,
tolerant to Vascular Streak Dieback (VSD) and have an average pod index of 20-34.
Product Forms
Cacao is the main ingredient that has no product substitute in chocolate production.
There are six (6) intermediate products that can be derived from cacao beans: cocoa
nibs, cocoa liquor (tablea), cocoa cake, cocoa butter, cocoa powder and chocolate
confectionary blocks. These products gained popularity not only in the chocolate industry
but also in cosmetics and pharmaceutical industries. Hence, cacao’s diversified use for
food and non-food industries provides broader market opportunities. As a health food,
cacao is considered as a super food as it is packed with vitamins, antioxidants and
essential minerals such as magnesium, calcium and iron.
a. Cacao Nibs are made from fermented and dried cacao beans, which are de-hulled
then broken into smaller pieces. They contain the whole cacao bean, thus possess the
full flavor that cacao has to offer.
10 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
b. Cacao Paste, known as cacao liquor, is made from milling whole cacao beans into a
creamy, rich paste. The paste is allowed to solidify into a solid block, which can also
be considered 100% chocolate as it contains only pure, whole cacao beans.
c. Cacao Butter is the combined butter made from all of the fat-based components in
whole cacao beans. This is made by pressing the milled cacao beans to separate the
cacao butter from non-fat cacao mass or solid.
d. Cacao powder is obtained from milling whole cacao beans and pressing them to
remove the fat content. The milled cacao mass can then be grounded into a fine
powder.
e. Cacao beans are the raw form, which can be sold as wet or dry and fermented. It can
be heat treated by roasting, to produce cocoa-based products.
• Chocolates
• Chocolate Confectionery
On the other hand, some of the by-products that can be derived from cacao are as follows:
a. Cocoa Pulp Juice, also known as sweatings, is a whitish liquid extracted from wet
cocoa beans. It contains predominant minerals such as potassium, sodium, calcium
and magnesium. The pectin obtained from cocoa pulp juice is comparable with
pectins that are derived from apples and lemons. Fermentation of the sugars in
sweatings may lead to the production of alcoholic drinks, such as gin and brandy, as
well as production of wine and vinegar.
ii. Animal feed – CPH is incorporated into animal feeds for pigs, poultry and
livestock, and is blended in tilapia feed.
iii. Alkali - CPH ash can be used as a source of alkali for soap making.
iv. Fertilizer - CPH ash can also be converted into a potassium-rich fertilizer by
adding starch and pelletizing the mixture.
c. Cocoa Bean Shell is the seed coat removed from the cocoa beans, which can be used
as a mulch.
d. Cocoa butter extracted from discarded cocoa beans may be used in the
production of toilet soap, soft soap and body pomade.
The processing of cocoa waste into the above-mentioned by-products will not only help
preserve the environment but also has the potential to augment cocoa farmers’ income.
Continual research and development are being undertaken to further assess the viability
and profitability of the above-mentioned by-products. Likewise, new initiatives are being
done to develop other by-products that can be derived from cocoa waste.
12 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Cacao Production
Cacao is a perennial crop that grows in tropical environments, mostly concentrated in a
region called the Cacao belt, which is anywhere within 20 degrees north or south of the
Equator. It grows most notably in Central and South America, West Africa and Southeast
Asia specifically Malaysia, Indonesia and the Philippines. The climate conditions in these
areas are well suited for growing cacao trees. The tree is often grown under the shades of
other trees and can be as tall as 40 feet. It typically bears fruits in 18 months but reaches
full bearing capacity in 5 years producing 70 to 100 pods or more per tree per year. The
suitability of cacao as an intercrop for coconut and banana and the two-week harvest
interval are some of the most valued advantages of this high value crop.
The tree is cultivated in many countries. Africa contributes 77.3% of the world cacao
production, followed by Latin America (17.2%) while Asia and Oceania at 5.5%. At
present, the leading suppliers of cacao are Ivory Coast, Ghana, Indonesia, Nigeria,
Cameroon, Brazil, Ecuador, Peru, Dominican Republic and Colombia.
Figure 1: Map Showing the Major Production Areas of Cacao in the World
Source: ICCO Quarterly Bulletin of Cocoa Statistics, Cocoa year 2020/21, August 31, 2021
Ninety percent (90%) of existing cacao farms are small. This ownership profile holds true
even in the global scenario where most cacao farms are also small, ranging from 1-3
hectares.
Local Production
In the Philippines, most cacao growing areas are located in the Mindanao island. As
illustrated below, the Davao Region contributes 78% of the national cacao production having
7,257.85 metric tons (MT) planted in 19,975 hectares of land in 2020. The rest of Mindanao
contributes almost 90% while the remaining 10% is being shared by Luzon and Visayas.
Nine of the top ten producing provinces are located in Mindanao island and one in the
Luzon island. Though majority of the top producers are in the Mindanao island, it is
noteworthy to recognize that Luzon and Visayas islands are continuously encouraging
new growers and existing growers to expand its areas thereby predicting to increase its
contribution in the overall cacao production in the future. Currently, the top producing
14 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
provinces in Luzon and Visayas are Aurora, Palawan, Iloilo and Bohol. The highest
producers in Luzon and Visayas are Aurora province and Iloilo with 333.91 metric tons
(MT) and 82.46 metric tons (MT) production, respectively.
Figure 3 shows that in Davao region, the City of Davao has contributed the highest
production in 2020 with a record of 2,508.98 metric tons (MT), which is equivalent to 27%
of Davao region’s contribution nationwide. It was followed by Davao del Norte and Davao
del Sur with 15% and 13% contribution, respectively.
The first cacao in Asia was planted in the Philippines in 1670 while commercial farms
were established in the 1950s. Production level reached 35,000 metric tons (MT) by 1990.
However, production started to decline due to several factors such as typhoon, pests
and diseases infestation, aging trees and possible genetic deterioration on commonly
used varieties. The decline was further aggravated by decreasing world market price and
competition with other plantation crops such as banana and palm oil, which led to a shift
on planting preferences.
Despite its competitive advantage, the Philippine cacao production at present only stands
at 9,340.73 metric tons (MT) from the 31,285.36 hectares of land planted with cacao
based on the figures released by the 2020 Philippine Statistical Authority (PSA).
Around 77,648,326 pieces of seedlings were distributed and planted through the
programs of Department of Agriculture-High Value Crops Development Program (DA-
HVCDP), the Department of Agrarian Reform (DAR), the Department of Environment and
Natural Resources–National Greening Program (DENR-NGP), and the Philippine Coconut
Authority-Kaanib Program (PCA-Kaanib Program). About twenty million (20M) planting
materials were distributed from 2016 to 2020 through the Department of Agriculture-High
Value Crops Development Program (DA-HVCDP). However, monitoring was not regularly
conducted, resulting in inaccurate and outdated data, which need to be addressed
immediately. High mortality on the planting materials distributed and inefficient
procurement and distribution system of planting materials were also identified as issues.
Most of the materials distributed in the past did not thrive because of its untimely
distribution and the seedlings were not yet mature when distributed.
The seedling dispersal programs could have provided a big push for the industry if
proper trainings were provided to beneficiaries and appropriate production protocols
were observed. For this reason, the Harmonized Production and Postharvest Protocols for
cacao is currently being crafted.
16 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Table 3: Volume of Production and Area Planted/harvested
Year Volume of Production (MT) Area Planted/Harvested (HA)
Table 4 shows that there was a slight decrease in area planted for cacao from 9,582
to 9,339 ha in 2011-2012 due to high number of mortality rate. However, a gradual
increase in area planted was observed in 2013 up to 2020 from 9,431 to 31,285 ha,
which accounts for an average increase of 2,743 ha per year. Such increase could be
associated with the DA, DENR and PCA seedling dispersal programs as well as the
increasing interest of private sectors in cacao growing. Despite an increase in hectarage
of cacao farm, the cacao production only increased slightly with an average volume of
563 metric tons (MT). As of the 2020 PSA release, there are 6 million cacao bearing trees
planted nationwide. This may be attributed to the unclear data on how many trees have
been planted in a hectare to match the computation for the expected production. It is
therefore recommended that in conducting data gathering, the number of trees instead
of hectarage should be collected in order to reflect a more realistic scenario of cacao
production.
YIELD
Despite the availability of high-yielding varieties of cacao, the 2.0 kg per tree yield
performance has not been achieved in most farms. This is due to the limited supply of
quality planting materials and lack of trainings on good agricultural practices.
In spite of the availability of high-yielding varieties, area expansion and planting material
distribution initiatives, the yield has declined from 0.53 metric tons (MT) per hectare (ha)
to 0.30 metric tons (MT) per hectare (ha) during the period of 2010 to 2020. The volume
of production at 0.5 kg to 1.0 kg per tree per year was observed, which is way below the
targeted 2 kg per tree per year yield performance set by the industry to beat the 2022
Cacao Challenge. The genetic expression of the existing varieties is expected to produce
3.5 kg per tree per year.
Aging cacao trees, possible genetic deterioration on commonly used varieties, lack of
good agricultural practices, and scarcity of high-yielding planting materials are among
the factors affecting the yield and production volume of the industry. Thus, aside from
expansion area and provision of inputs, massive rehabilitation/rejuvenation of old cacao
trees is strongly recommended to increase yield. An estimate of 19 million trees also
need to be fertilized with an expected yield of 39 metric tons (MT) by 2025.
18 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
The Philippine Coconut Farmers and Industry Development Plan (CFIDP) includes a
collaborative effort in the implementation of the Coconut-Coffee/Cacao-Based Enterprise
Development project under the Republic Act No. 11524 otherwise known as the Coconut
Farmers and Industry Trust Fund Act. This targets to rehabilitate about three (3) million
cacao trees over a five-year period, expand the priority cacao area to 7,300 hectares over
five years, and establish cacao nurseries with production training to achieve a capacity
of 10,000 seedlings per year. The goal of this project is to group farmers into clusters,
create long-term jobs, and conserve natural resources. Farmers-owners will be the direct
beneficiaries of this project, while tenants, laborers, and caretakers will benefit as skilled
farm and processing service providers/workers.
In addition, intercropping coconut and cacao might help meet the roadmap’s targets of
3,792.98 metric tons by 2025 and 10,362.33 by 2028.
The growing number of restaurants and coffee shops serving cocoa-based drinks and
food items, and the growing industry of medium and small-scale chocolatiers requiring
high quality cocoa beans contributed to the attractive price of cacao in the domestic
market. Moreover, changes in consumer preferences such as increasing consumption of
“Tsokolate” (Tablea) drinks and chocolates, and increasing purchasing power of middle-
aged working class pose opportunities for manufacturers of tablea and chocolates
including cocoa beans producers.
20 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Figure 5: Graph Showing the Utilization of Cacao in the Philippines from 2010 to 2019
Based on the Supply and Utilization Accounts data generated by the PSA, a Filipino
consumed an average of 0.063 kg of cacao per year for the 10-year period (2010-2019).
It can be observed that the per capita consumption dropped from 0.08 kg/year in 2010
to 0.06 kg/year in 2019. The average volume of imports during the period is 23% of the
total supply of cacao in the country.
On the other hand, cacao intended for exports generally increased over the years, from
181 metric tons (MT) in 2010 to 3,049 metric tons (MT) in 2019. The drastic increase
started in 2014 wherein eight (8) Filipino firms participated in the cocoa-chocolate global
value chain. On the average, 17.75% of the cacao supply in the country was exported.
Meanwhile, volume intended for processing exhibit volatility. The average volume allotted
for the said activity is just 0.82% of the total available supply in the country.
Furthermore, total net disposable continuously takes up majority of the available supply
with an average of 81.43% for the same period. Net Food Disposable pertains to the
amount of food commodity available in its original or unprocessed form which is intended
for human consumption.
Figure 6 shows the production of cocoa beans by country from 2018/19 and 2019/20,
with a forecast for 2020/21. In crop year 2020/21, the top producer is still Côte d’Ivoire
with about 2.225 million metric tons (MT) of cocoa beans. All of the top eight (8) cacao-
producing nations exhibited increases in the production comparing the 2018/2019 and
2020/21 data, except for Indonesia. Only Indonesia is the Asian country among the said
list with 0.200 million metric tons (MT) in 2020/21.
Figure 6. Global cocoa bean production by country (in 1,000 metric tons)
In 2017, the Philippines placed 24th in the cocoa beans production with 7,009 metric tons
(MT). This is according to the survey conducted by the Food and Agriculture Organization
(FAO). However, the country placed 72nd in terms of exports with a global market share
of less than 0.01%.
22 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Table 6 shows the volume and value of exported and imported cocoa products in 2020.
Based on volume, the major cocoa product exported by the country in 2020 is still cocoa
beans with 5,153 kg (equivalent to USD 13,657). The diversified use of cocoa beans in
the manufacturing, pharmaceutical, and cosmetics industries generally pushes the global
demand of cocoa beans on an upward trend. Other cocoa products exported by the
Philippines include cocoa paste (48 kg), cocoa butter, fat and oil (381 kg), cocoa powder
(241 kg), and chocolate and other food preparations containing cocoa (609 kg).
Meanwhile, the largest volume imported is still cocoa powder with 28,389 kg (equivalent
to USD 59,511). This is being credited to major chocolate manufacturers in the country
that use imported powder and cocoa butter for their raw materials. On the other hand,
the biggest importation of cocoa products in terms of value is on Chocolate and other
food preparations containing cocoa with USD 82,058 (equivalent to 19,886 kg).
The country also imported cocoa beans (175kg), cocoa shells, husks, skins and other
cocoa waste (1841kg), cocoa paste (884kg), and cocoa butter, fat and oil (60kg). The
total value of exported cocoa products is USD 22,130 while the imported cocoa products
is USD 168,311. Clearly, there is a trade deficit in cocoa, which is equivalent to USD
146,181.
Table 5: Volume and Value of export and import of cocoa products in thousand metric tons, CY 2020
EXPORT IMPORT
COCOA PRODUCTS
Quantity (kg) Value (US$) Quantity (kg) Value (US$)
Cocoa powder, not containing added sugar 241 659 28,389 59,511
or other sweetening matter
Other countries in the list include France, United Kingdom, Belgium, Canada, Poland,
Italy and Russian Federation. It can be noted that the value of the cocoa imported by
the top 10 cocoa-importing countries ranges from 57 to 59% of the total value imported
from 2016 to 2020. The growing demand of cocoa beans is positively correlated with
the demand for chocolates given that cocoa is the primary raw material that cannot be
substituted by other commodities.
Source: International Trade Center (ITC) Trade Map accessed through http://www.trademap.org
24 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Table 7: Value of Philippine Cacao Imports by Country of Origin (US $), 2016- 2020
Import Market 2016 2017 2018 2019 2020 Total % Share
United States of America 44,541 37,303 22,796 17,552 14,041 136,233 14%
Source: International Trade Center (ITC) Trade Map accessed through http://www.trademap.org
On the other hand, as shown in Table 8, most of the Philippine Cacao Imports are sourced
from Malaysia with USD 202,531 from 2016 to 2020 followed by Indonesia with USD
158,942 and USA with USD 136,233. Bigger percentage of importations from Malaysia
and Indonesia may be due to the proximity of these countries to the Philippines.
For the 2019/20 forecast, world cocoa grindings are expected to expand to 4.860 million
tons, up by 157,000 tons, representing a 3.3% increase compared to the revised estimate
of 4.703 million tons. It is anticipated that processing activities will grow by 5.1% to 1.164
million tons in Asia and Oceania, whereas a growth of 7.6% to 961,000 tons is projected
for the Americas. In Africa, processing activities are forecast to expand by 0.5% to 1.001
million tons while a 1.6% increase to 1.734 million tons is envisaged in grinding activities for
Europe compared to the level attained in the same period of the previous season (ICCO).
The high grinding capacity has already exceeded the bean production, thus, widening the
gap of demand and supply. In the Philippines, current production is not even enough to
supply local grinding requirements estimated to be at 40,000 metric tons (MT).
Among the primary drivers of this increase are: the big cocoa consumption demand
of the United States and Europe, the increasing discretionary household income in
developing countries, and the positioning of cocoa as health food, among others.
Prices
Normally, the local price of the country’s cocoa beans is correlated with the international
commodities pricing. However, when there is an increased volume in local cacao
processing on a certain period (i.e. tablea processors) and the supply of raw materials is
nil, it pushes the local price up considering that ‘tablea’ does not at all times conform to
world market prices.
Figure 7. Wholesale Prices of Cocoa Beans from January 2016 to May 2021
(Philippine Peso per Kilogram)
The wholesale price of cocoa beans in the Philippines ranged from Php 98.00-138.00/kg.
As of May 2021, the wholesale price of dried cacao beans is at Php 115.52/kg.
26 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Figure 8. Farmgate Prices of Cacao Beans from January 2016 to May 2021
(Philippine Peso per Kilogram)
From 2016 to July 2021, the farmgate price of dried cacao beans per month ranged from
PhP 82.00 to 126.00/kg. As of July 2021, the farmgate price of dried cacao beans is at
P96.01/kg.
Cacao is the only agricultural commodity that defies the law of Supply and Demand.
Unlike other commodities, the price of cocoa beans is generally higher during peak
season. Low production is between January to April with the price at its lowest. However,
during the peak production period, i.e. October up to early January, the price is at its
highest. Incidentally, this period is also the peak inventory month for cacao bean for
occasions such as Halloween, Christmas and Valentine’s Day.
As shown in Table 9, there are eight (8) segments in the Cacao industry chain, namely:
input provision; cacao farm maintenance and beans production; fermentation, drying,
and storage; local trading/marketing; beans processing; exporting; trading of finished
products; and final sale in domestic and export markets.
Input Provision
Input suppliers, farmer cooperatives and nursery operators are the sources of raw
materials used in cacao production. The most important raw material that these key
players provide is the seedling. To provide these seedlings, the following activities
are necessary: establishment/expansion and maintenance of budwood gardens/scion
groves; propagation and distribution; and nursery accreditation. The destination of
these inputs are farmer cooperatives and individual farmers. Moreover, organic fertilizer
(such as biofertilizers and biopesticides) and inorganic farm inputs, pod sleeves,
packaging materials and other input requirements of the upper level functions are
made accessible by the input providers. Most importantly, they provide technical and
extension services to producers.
29
Cacao Farm Maintenance and Beans Production
There are farmer cooperatives which may be involved in processing activities. These
cooperatives eventually coordinate with local processors, which sell to the local market
and exporters, for the sale of their produce to the export market. Farmer cooperatives
together with wet beans buyers are tasked to do the following activities to produce
either dried or fermented beans and dried beans: pod breaking; fermentation; drying;
packaging; storage; utilization of cacao waste and by-products; and other value-adding
activities.
Local Marketing/Trading
In local marketing/trading of dried and fermented beans, farmer cooperatives and traders
organize activities related to consolidation, cleaning, packaging and labelling, hauling,
transporting, wholesaling, and retailing.
Beans Processing
Beans are further processed by farmer cooperatives and processors into nibs, tablea,
butter and powder (set A) or chocolates and chocolate products (set B). For the first set
of products, the tasks to be undertaken include cleaning, roasting, winnowing, grinding,
pressing, pulverizing, packaging and storage. For chocolates and chocolate products, the
activities are cleaning, roasting, winnowing, grinding, mixing/refining, conching, moulding
and packaging.
30 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Exporting
Products are then transported/shipped by exporters and processors to traders and other
exporters. These products include tablea, cocoa beans, cocoa butter, cocoa powder,
chocolates, and cocoa paste.
The above-mentioned products are sold in retail by traders and exporters in the local
and export markets. Supermarkets and retailers undertake the selling function. Final
consumers include local households and consumers, OFWs, and tourists.
Tasks/roles • Provision of • Planting/ • Pod breaking • Consolida- Set A • Transport- • Retailing • Buying
seedlings: replanting/ • Fermentation tion • Cleaning ing/Shipping
a. establishemnt/ rehabilita- • Drying • Cleaning • Roasting
expansion, tion • Packaging • Packaging • Winnow-
maintenance of • Farm main- • Storage & labeling ing
budwood gardens/ tenance • Utilization of • Hauling • Grinding
scion groves • Nutrient cacao waste • Transport- • Pressing
b. propagation and manage- and by- ing • Pulveriz-
distribution ment products • Wholesal- ing
c. nursery accreditation • Water man- • Other value- ing • Packaging
• Make accessible agement adding • Retailing • Storage
fertilizer, pesticide, • Pest and activities
pod sleeves disease Set B
• Make accessible manage- • Cleaning
design and ment • Roasting
packaging materials • Pod harvest- • Winnow-
and other input ing ing
requirements of the • Grindling
upper level functions • Mixing/
D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
• Technical, extension Refining
services • Conching
• Moulding
• Packaging
Final sale in
Cacao Farm Fermentation, Trading of
Local Mar- Domestic
Maintenance Drying and Beans Pro- Finished
Functions Input Provision keting/Trad- Exporting and Export
and Beans Storage cessing Products
ing Markets
Production
Role players/ Input Suppliers Farmer Coop- Wet beans Farmer Farmer Co- Exporters Traders Consump-
Operators Farmer Cooperatives eratives buyers Cooperatives operatives Processors Exporters tion
Nursery Operators Individual Farmer Coops Local Traders Processors
Farmers
Product - Seedlings Cacao pods, Dried beans, Dried beans, Set A: Nibs, Tablea, Cocoa Tablea, Co- Local
- Organic ferilizers wet beans fermented and fermented Tableam Benas, Cocoa coa Beans, Households
Technical services dried beans and driend Butter, Pow- Butter, Cocoa Cocoa But- and Con-
beans der Powder, Choc- ter, Cocoa sumers,
olates, Cocoa Powder, OFWs,
Set B: choc- paste Chocolates, Tourists, Su-
olates and Cocoa permarkets,
chocolate paste Retailers,
products Export Mar-
ket
Enablers DA, DA-HVCDP, DA-BPI, DA-ATI, DA-BAFS, DA-BSWM, DA, DA-HVC- DA, DA, DTI, Tablea, Co-
DA-BAR, PCA, DAR, DENR, DTI, DOST, PCIC/PCIA, LGUs, DP, DA- DA-HVCDP, DA, DTI, PCIC/ PCIC/PCIA coa Beans,
MinDA, Academe, Government, other private sector AMAS, DTI, ATI, TESDA, PCIA, Attaches Cocoa But-
group, ACPC, LBP and other Funding Institutions PCIC/PCIA PhilMech, --- ter, Cocoa
LGUs DTI, DOST, Powder,
PCIC/PCIA, Chocolates,
LGUs Cocoa paste
One of the players that has a major role in the realization of the different interventions
is the strengthened Philippine Cacao Industry Council (PCIC). The PCIC was created to
spearhead the development of the industry. It is a private sector led council composed
of public and private sector representatives. To provide co-leadership, the Department
of Agriculture acts as a co-chair. Furthermore, at the Regional level, the Regional Cacao
Industry Councils were established. These councils spearhead the development of the
industry in their respective regions. The elected chairpersons represent their regions at
the Philippine National Cacao Industry Council (Philippine Cacao). To date, sixteen (16)
regional councils and five (5) provincial councils have already been created.
Enablers
The potential and significant contributions of the cacao industry to employment and
income generation have led the various government agencies to initiate interventions
that will support the development of the industry. Among the programs designed to
provide support are as follows:
• Industry Clustering, Market Assistance, Trade Promotion and Shared Service Facility
Programs of the Department of Trade and Industry (DTI);
34 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
• Mindanao Sustainable Agrarian and Agriculture Development (MinSAAD) Project;
• SETUP, MPEX, and CAPE, NICER, RDLead, CRADLE and BIST Programs of DOST; and
• Research and Development Projects of the DA-Bureau of Plant Industry and academe.
The convergence of government support programs and projects touches various levels of
the cacao industry value chain and is expected to transform and empower cacao farmers
into thriving cocoa communities, which are the essential foundation for sustainable cocoa
farming. To reach this goal of transformation and empowerment, there is a need for
collaborative and harmonized interventions among government agencies, private and
non-government organizations.
Postharvest Facilities
At present, majority of the cacao farmers ferment and dry the cacao beans at their farms
or homes using makeshift equipment. Cacao beans are dried on the ground or makeshift
platforms, which may expose the beans to surface contamination and infestation. The
absence of appropriate solar dryers or mechanical dryers slows down the drying of
cocoa beans during rainy season, allowing moulds to develop. On the other hand, rapid
drying prevents the oxidation of acetic acid, which leads to excess acid trapped within
the beans. Hence, this lack of appropriate machinery may cause serious problems for the
industry as it affects the flavor and quality of the beans.
Given the competitive advantage and marketing potentials of cacao in the local and
world market, many farmers have ventured in the industry in the recent years. However,
the supply of quality planting materials was not enough to meet the demand of the
increasing number of cacao growers as nursery and budwood gardens are limited.
There are over 150 nursery operators in Davao Region with combined production of more
than five (5) million seedlings per year. These nursery operators are supplying the Davao
Region and Mindanao areas as well as Luzon and Visayas areas. Ready to sow seeds and
bud sticks, which are the primary inputs to nursery operation, are also sourced out from
Davao. However, high mortality on planting materials was observed due to improper
handling and transport.
The existing supply gap and the proliferation of non-accredited nurseries are major
concerns that hamper the expansion and development of the industry. Hence, ensuring
easy access and availability of quality planting materials should be given top priority. In
order to address these concerns, there is a need to establish additional nurseries and
budwood gardens at the provincial level. In addition, plant nursery accreditation and
certification in the province should be strengthened at the same time more nurseries in
the municipalities be accredited.
Farm-to-Market Road
Accessibility to farm-to-market road (FMR) plays a vital role in the production and
marketing aspects of the industry.
In the production side, the lack of FMR affects the farmers’ capacity to transport farm
inputs and farm products, thus increasing their production costs. The delay of movement
in the harvested cacao to postharvest facilities and/or marketing channels also affects the
quality of beans, thus resulting in low farm gate prices.
As for the marketing aspect, poor road networks limit the farmers’ opportunities to gain
access to larger commercial channels and to choose buyers who can provide higher prices.
Oftentimes, farmers rely on middlemen who often buy their beans at a much lower price.
36 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Since most cacao farms are located in the rural areas, issues on product consolidation,
delays in the movements of crops, farm inputs, and finished product, which affect
production costs and farm gate prices, are very evident.
To help farmers gain better leverage on market and have better access to inputs, it is
recommended that Farm-to-Market Road (FMR) initiatives put priority on the locations
where cacao growing is suitable as presented in Appendices 2 and 3: Climate and Soil
Suitability map.
Improvement and innovation across the different areas of the value chain (input provision
to production and processing) are necessary in gaining competitive and comparative
advantage. Accordingly, both the private and public sectors including the academe
have been independently doing research and development on cacao production and
management as well as product development and enhancement in order to attain its
competitive advantage.
To complement the research and development (R&D), the University of the Philippines
Los Baños (UPLB), DA-BPI and the DOST in partnership with the private sector undertook
research and development interventions to develop new technologies in nursery
operation, farm production protocols and postharvest processing. These initiatives aim to
increase farm efficiency and productivity as well as enhance product quality.
Although product development and enhancement are commonly initiated by the private
sector engaged in processing/manufacturing, the government sector such as the DOST
is also conducting researches for quality improvement of various cocoa-based products
such as tablea, liquor, etc.
At present, the private sector and non-government organizations such as the Kennemer
Foods International (KFI), CSI Trade Ventures., Cacao Industry Development Association
of Mindanao (CIDAMI), and ACDI/VOCA provide technical support to cacao farmers
across the country. Likewise, public sector initiatives led by DA, DAR, DENR, and DTI in
partnership with Cacao Industry Development Association of Mindanao Inc. (CIDAMI)
provide human resource trainings not only in the field of production but also on
entrepreneurship.
It is evident that the importance of capacity building has been recognized and given
priority by all sectors. However, most of the training centers are located in Region XI,
thus making it less accessible to other regions such as Luzon and Visayas. To address this
gap, PCIC in collaboration with TESDA will design and conduct trainings nationwide.
Alongside with this initiative is the preparation of the Harmonized Cacao Production and
Postharvest Protocols that will be published and made in digital format to reach more
cacao growers.
38 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
capital requirements of their production, processing, marketing as well as farm rehabilitation
and/or expansion undertaking, and other activities along the cacao value chain.
The Department of Agriculture (DA) including its attached agencies and the Department
of Agrarian Reform are the government agencies responsible for the majority of
the lending programs for the agricultural sector. The government credit programs
administered by DA, DAR and other related agencies are designed to provide preferential
(subsidized) loans to smallholder farmers, including those in cacao farming.
Majority of DA and DAR credit programs are implemented in partnership with the Land
Bank of the Philippines (LBP). A number of the DA programs are also in partnership with
cooperatives, farmers’ associations and rural banks in delivering credit to smallholder
farmers. Loans are granted for the purpose of purchasing inputs, as working capital, and/
or for the acquisition of farm equipment, machineries and post-harvest facilities. DA and
DAR also make available financing support for immediate relief and recovery of small
farmers affected by calamities and other disastrous and fortuitous events.
Cacao farmers and cacao-based MSEs may also avail financing through the lending
windows provided by government-owned financing institutions such as the Land Bank of
the Philippines (LBP) and the Small Business Corporation (SBC).
ACPC AgriNegosyo Program Provides accessible and affordable credit to eligible borrowers
(ANYO) and its subprograms to finance income-generating activities (production, processing,
or marketing or agri-fishery income generating activity and
non-farm micro-enterprise) and working capital and/or fixed
asset acquisition (agricultural facilities construction/acquisition,
machinery/ equipment acquisition) requirements of the micro
and small agribusiness enterprise and farmers and fisherfolk
cooperatives/ associations
ACPC Kapital Access for Young Finance working capital and/or fixed asset acquisition
Agripreneurs (KAYA) requirement of start-up or existing agri-based projects of young
entrepreneurs and agri-fishery graduates.
ACPC Survival and Recovery Loan Provides immediate financing relief to small farmers and
Assistance (SURE) Program fishers affected by natural and other calamities, animal disease
outbreak, and other disastrous events.
DAR Expanded Assistance Financing support for disaster affected ARBOs and small farmer
to Restore and Install holders and their families to restore livelihoods and farming
Sustainable Enterprise for activities.
Agrarian Reform Beneficiaries
and Small Farm Holders
(E-ARISE-ARBs)
DAR Credit Assistance Program Provides credit assistance to existing CAP-PBP Window III
for Program Beneficiaries cooperative/farmers association borrowers to ensure their
Development (CAP-PBD) sustained economic development.
LBP Credit Assistance for Cacao Finance cacao industry stakeholders and help them attain their
Agribusiness Entities and mission of producing 100,000 metric tons of dried fermented
Other Organizations 100 beans by 2022
(Cacao 100)
SBC MSME Financing Programs Direct lending to registered micro, small and medium
enterprises (MSMEs), which aims to bridge the financing gap
of “pre-bankable but viable” MSMEs that are at the moment
“unserved” by the banking system.
40 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
While there are government-initiated interventions, it is imperative to increase the
participation of the private sector in the provision of financing services to cacao farmers,
in particular to the smallholders who lack capitalization, to advance their production
activities and enable them to viably and sustainably contribute to the economy.
Enhancing the enabling policy and regulatory environment is crucial to allow (1) adoption
of market-based financial and credit policies, (2) focus on proper management and
utilization of loan fund, (3) engagement and active participation of banks and government
financial institutions, and (4) provision of critical support services in order to serve and
provide accessible financing to more farmers including those engaged in cacao farming
and cacao-based enterprises. Moreover, current programs only fund new farms that are
operating for 0 to 3 years. Cacao growers with farms that need rehabilitation are having
difficulty in raising funds for their farm activities.
In terms of insurance, the Philippine Crop Insurance Corporation (PCIC) has been offering
insurance coverage to both commercial and non-commercial cacao growers/farmers
under its tree and seedling mortality insurance products. These insurance products serve
as a form of protection against losses due to natural calamities and pest and diseases
infestation. The PCIC also provides free subsidized insurance coverage to subsistence
cacao farmers that are listed in the Registry System for Basic Sector in Agriculture
(RSBSA). Cacao farmers who are not in the list may go to their respective Municipal or
Provincial Agriculturist to register and be included in the said list. Additionally, Crop
Insurance may be bundled with certain agricultural credit programs, such as those offered
by ACPC. These agricultural credit programs are in a form of loan and income security
programs that are extended to the farmers.
SWOT Analysis
The series of consultative meetings and national convergence allowed the stakeholders to
discuss strengths, weaknesses, opportunities and threats that are prevalent in the industry.
These are as follows:
Final sale in the Domestic • Accessibility to domestic • Limited number of • Increasing discretionary • Decreasing world market
and Export Markets and foreign trade processors (Common household income in price
Trading of Finished Products • Global recognition of Service Facilities) developing countries • Setback from pandemic
Philippine cacao beans • Underutilization of the • New and innovative
Exporting
and products capacity of local grinders uses of cocoa in the
Beans Processing
• Six (6) cacao products sold • Insufficient/inappropriate/ food, cosmetics and
Local Marketing/Trading to local and international Lack of knowledge on the pharmaceutical industries
markets use of PH facilities • Increasing awareness of
• No product substitutes • Lack of Philippine Cacao consumers to fair trade
• Presence of players from Brand and health & wellness
all stages of the value • Inefficient Market • Positioning of cacao as
chain Linkages health food
• Cacao prices defies the • Trade-deficit in cacao • Growing number of
law of supply and demand • Weak technology restaurants and coffee
• Convergence of commercialization shops serving cocoa-
government support based drinks and
programs and projects food items
• Continuous R&D • Growing industry of
• Presence of enablers from medium and small-scale
the government sector, chocolatiers requiring
private sector and NGOs high quality cocoa beans
• Strengthened Philippine • Increasing purchasing
D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Cacao Industry Council, power of middle-aged
regional and provincial working class
Cacao Farm Maintenance • Suitability of location for • Low productivity level 2M hectares of coconut • Occurrence of pests and
and Beans Production production • Unstable yield from farms ideal for cacao diseases
• Suitability of cacao as 2020-2014 despite area cropping • Wild weather pattern
intercrop expansion • Competition with other
• Early gestation period • Aging cacao trees in plantation crops
• Two-week harvest interval major production areas • Possible genetic
• Early Return on • Dominance of small-scale deterioration on
Investment and high production commonly used varieties
profitability • Inadequate R&D Centers
• Inaccessibility to credit
Consistent with the bright market opportunities of the industry is the promising return on
investments (ROI) for those who are or will be engaged in cacao production. As illustrated
in the table below, production cost of planting cacao (monocrop or intercrop) is relatively
low. For monocrop production, initial production cost for the first year is at PhP89,628.00
per hectare (equivalent to 1,100 cacao trees) while intercrop planting is estimated to be at
PhP61,148.00 per hectare (equivalent to 600 cacao trees).
Based on the data provided, material cost for cacao production is higher than the labor
cost in intercrop planting from the first year until the third year of production. Material
costs during these years comprise 65 to 75% of the total production, which went to
the investment on seedlings, tools and other inputs. On the other hand, for monocrop
production, material cost is higher than the labor cost during the first year of production
only. This is due to the maintenance cost per year after the first year of production, which
is equivalent to Php60,000.
Furthermore, production cost can even be lower when low-cost organic farm inputs such
as biofertilizers and biopesticides are utilized. Biofertilizers like MYKOVAM is applied
once only throughout the life time of the crop. It is composed of mycorrhizal fungi that
proliferate in the roots and rhizosphere and aids in the absorption of more nutrients and
water especially in marginal areas exposed to drought and high temperature. Only a
very minimal amount of chemical fertilizer (from 25 to 50% of the recommended rate) is
needed during the early establishment period of the field planted seedling.
Unlike other crops, ROI of cacao production can be gained within three (3) years both
for monocrop and intercrop areas since harvest may be done within 18 months for well-
managed farms. Profitability is higher on the third year as net income doubles relative
with the production cost.
The promising income that the industry can offer accompanied with the numerous
employment (being a labour-intensive industry) it can generate through cacao production will
ultimately help in the government’s goal for countryside development and poverty alleviation.
44 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Table 11: Costs and Returns per Hectare as Intercrop (600 trees per hectare)
PARTICULARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Yield
Pod Index 20 20 20 20 20
A. MATERIALS
Tools
Seedlings
Fertilizer: 16-16-16
Application rate (grams per tree) 340 560 600 600 600
Cost/knapsack 29 29 29 29 29
Herbicide Spray
Cost/knapsack 41 41 41 41 41
No. of Knapsack 12 12 12 12 12
Provision for harvest sacks for pods 525 2,550 4,425 5,250
B. LABOR
Clearing
Layout / staking
Digging of holes
Piece rate 5
Planting
Cost per man day 200
46 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PARTICULARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Piece rate 2 2
Number of cycles 4 4
Foliar Spray
Number of cycles 24 24 24 24 24
Herbicide Spray
No. of Knapsack 12 12 12 12 12
Fertilizer application
No. of cycles 4 3 3 2 2
Pod sleeving
Labor cost per kilo of wet bean harvested 3.50 3.50 3.50 3.50 3.50
REVENUES
Gross Value Wet beans (at PhP28/kg) 10,080 85,680 147,840 176,400
Table 12: Costs and Returns per Hectare as Monocrop (1,100 cacao trees per hectare)
PARTICULARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
48 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PARTICULARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Gross Value (Price index PhP 110/kg) 33,000 110,000 165,000 220,000
Net Income for Productivity Level of (89,628) (58,613) (6,600) 65,065 112,090
2kg DFCB
Total Dried Bean Production at 3 kg/ 450 1,500 2,250 3,000
Tree
Gross Value (Price Index PhP 110/kg) 49,500 165,000 247,500 330,000
Net Income for Productivity Level of (89,628) (42,113) 61,600 134,210 214,170
3kg DFCB
Gross Value (Price Index PhP 110/kg) 66,000 220,000 330,000 440,000
Net Income for Productivity Level of (89,628) (25,613) 116,600 216,645 324,170
4kg DFCB
Value-added products
In the Philippines, there are seven cacao products sold to local and international markets.
These are the wet beans, dried beans, dried fermented beans, cacao nibs, tablea, cocoa
powder, and cocoa butter. Value of each product generally depends on the value-added
inputs and demand in the market.
Products that have undergone value-adding processes are more valued. Per industry
estimate, the value of beans increases four times when converted to tablea and increases
eight times when converted to chocolate. This entails that in order to gain higher
profitability, producers must value-add their products instead of settling into wet or dried
beans alone.
In the previous roadmap, it was mentioned that among the most valued cacao product is
the cocoa butter which is being sold at PhP750.00 per kilogram or higher. This product
is a pale-yellow, edible fat extracted from the cocoa beans. It accounts 45-57% of the
bean content and is the most expensive. It is a major ingredient in practically all types of
chocolates and also being used in making ointments, toiletries, and pharmaceuticals.
50 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
In selling beans, the dried fermented ones are more valued compared to the wet and
dried beans. Farmers may have an additional PhP10-15.00 per kilogram in selling dried
fermented beans. However, in order to market this type of product, availability and
accessibility to postharvest facilities are very important to farmers.
In terms of tablea product, the farmers get the highest profitability with 38% or equivalent
to PhP130.00 based on the PhP 215.00 selling price of 1.5 kg of beans. Production cost
is estimated at PhP45.00 - PhP50.00 per kilo of dried fermented beans. The minimal
requirement for additional inputs and overhead costs, and the prevailing market price
based on supply and demand, contribute to the bigger profitability of the farmers. On
the other hand, tablea processors gain the next highest profit as compared to other levels
of the value chain. A twenty-nine percent profit, equivalent to PhP99.00 per kilogram,
is gained by the processors out of the PhP450.00 selling price per kilogram. Traders and
wholesalers/retailers only acquire 4% and 14% profitability shares, respectively.
Under the value chain distribution in the international scenario, 6.6% profit goes to the
farmer for every bar of chocolate, while the chocolate producer and retailer take 35% and
44% of the shares, respectively.
Farmers with value-adding activities gained more economically. Thus, the cocoa sector
can contribute much in terms of inclusive economic growth. This is very important in
spurring up rural economic development. This is on top of the jobs created and other
related livelihood opportunities that can be created.
Benchmark Analysis
Majority of the cacao farms in the country are small holdings and are being owned and
managed by farmers. These farmers are generally undergraduates who have gained
knowledge in farming from their descendants or from experience. Consequently, majority
of them have limited technical skills and knowledge on production, marketing, and
entrepreneurship. Further, farmers have limited access to relevant and updated data,
information, and technologies that they can use.
The table below shows the assessment of farmers on the effect of their current practices
on income and the environment as well as their proposed solutions. This was adopted
from the Value Chain Analysis and Competitive Strategy: Davao Del Norte Cocoa Bean.
Table 13: Farmers’ Assessment of the Effect of the Current Practices on Income and Environment with
Proposed Solutions and Intervention Approach
Impact on Impact on Intervention
Common Practices Solution
Environment (IE) Business (IB) Approach
Transportation to Use of energy Carbon Additional Cost On-site nursery Capacity building
procure inputs emission establishment
52 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Moreover, the characteristics of cocoa produced depends on the genotype, soil, climate
and harvest conditions, and postharvest activities, particularly fermentation, drying and
roasting. Fermentation and drying, when done appropriately, remove all unpleasant flavors
and initiate chemical processes required to produce the true cocoa and chocolate flavours
that occurs after roasting. According to Mikkelsen, the factors that affect the quality of
the final beans in the fermenting step include degree of ripeness of pods; type of cocoa;
climate and season; quantity of cocoa beans in a batch; and duration of fermentation.
Drying is a necessary step in the processing of cocoa. Through this process, the good
condition of beans for storage and transport is obtained. It is also necessary to reduce the
bitterness and astringency of the beans. Furthermore, it facilitates the development of
the chocolate brown color characteristic of well-fermented beans as well as prevent the
development of off-flavors within the beans.
In the country, facilities and systems used in drying and fermentation vary. This variation
affects the quality of the beans. Agents of multinational companies have their own
fermentary facilities, solar dryers, and bean grading kits, while farmers still do the
fermentation and drying at their production areas or homes using makeshift equipment.
Most likely, the beans are dried on the ground or makeshift platforms, which results in
surface contamination that is a major source of fungi in fermented and dried cocoa beans.
Moreover, there is a high risk on mould development during rainy days wherein drying of
cocoa beans is done on prolonged periods and on an intermittent basis. This results in
off-flavours that is created when the moulds penetrate the testa, which can be a serious
problem. On the other hand, when drying is too fast, the oxidation of acetic acid can be
prevented. This results in too much acid trapped within the beans, which adversely affects
the flavour of the nib.
Hence, the study conducted by the Duke University entitled “The Philippines in the
Cocoa Value Chain” provided upgrading trajectory recommendations. If these will be
achieved, the country is expected to move into higher value processing segment of the
value chain. The following are the recommendations as stated in the said document:
a. Short Term Process Upgrading (agriculture): Taking the lead from major cocoa
bean producers, the Philippines needs to improve their agriculture production to
be competitive and participate in the cocoa-chocolate GVC. The starting point for
the country is to expand and improve the productivity. Aging trees, and inefficient
agricultural operations have undermined productivity of the sector. Increasing the
production should first satisfy the domestic market and later the international market.
This should be the very first step that the country should follow. Efforts to boost
processing at this stage will likely drive less expensive beans imports from other
countries, and undermine production efforts at home.
b. Short Term Process Upgrading (certification): Taking the lead from major cocoa
bean producers, the Philippines needs to seek certification from the international
certifying organizations, such as UTZ and Rainforest Alliance. While these certifications
do not command a high price premium in the market, the commitment of several
global cocoa processors and chocolate manufacturers to source only certified
beans by 2020 represents a potential shift in the global demand market and new
requirement for export. The Philippines needs to begin assisting farmers now to meet
the requirements of these organizations to ensure competitiveness as production
increases.
54 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
c. Short Term Product Upgrading: Continue to encourage the diversification of cocoa
bean variety in the nation. Since the geography of the Philippines allows for the
cultivation of the three major types of beans: Trinitario, Criollo and Forastero, it is
advisable that the country diversifies risks by growing all varieties that can cater to
different end markets. However, more effort should be done towards diversifying into
Forastero beans as demand for Criollo beans is a niche market with relatively small
demand. Furthermore, it is advisable to explore high value hybrids to take advantage
of new markets and new cocoa bean varieties.
Local
The Philippines is said to be the first country in Asia that planted cacao. The
conduciveness of the country’s location for cacao production and accessibility to domestic
and foreign trade heightened the interest of local farmers and exporters to push for a
more dynamic and competitive cacao industry that can participate in the cacao global
cacao and chocolate value chain. For this to materialize, there is a need to build and
promote a Philippine Cacao Brand.
In 2017, the Cocoa of Excellence Program first recognized cacao-beans from the
Philippines as part of the best 50 beans for the said year’s edition. The Cocoa of
Excellence Program is the first stage for cacao producers to join the International
Cocoa Awards (ICA). The ICA is a global competition, coordinated by the Biodiversity
International and Event International, that acknowledges the quality, flavor and diversity
of cacao according to their origin. This year (2021), one entry from the Davao Region and
one entry from Region VI were recognized as gold awardees. In addition, one entry from
Davao Region received a silver award.
However, market linkages still remain inefficient which resulted in extensive market
failures, high transaction costs and risks, and service gaps. Furthermore, the country is
still an importer of cocoa products such as chocolate, cocoa powder, cocoa beans, cocoa
paste, cocoa butter and cocoa husks. The large import of cocoa powder and export
value of chocolate is being credited to major chocolate manufacturers in the country that
seldom buy local cocoa beans. Instead, they use imported powder and cocoa butter for
their raw materials. This in effect increases the importation of cocoa powder making it the
leading cacao product import in 2014. Consequently, some of the finished by-products
produced by local manufacturers are being exported to other countries.
57
While considered a snack food in developed countries, chocolate in the Philippines
is mostly eaten during special occasion or given as gifts. Among the major chocolate
manufacturers located in the country are Universal Robina Corporation, Commonwealth
Foods, Inc., Goya, Inc., and Columbia International Food Products Inc. Most of these
companies are situated in Luzon, with capacity ranging from 20,000 to 36,000 metric
tons (MT) of processed cocoa annually. Universal Robina accounts 38% of the chocolate
market, with Cloud Nine and Nips as top selling products.
Grinding requirement of local chocolate manufacturers is at 40,000 metric tons (MT) while
national production is only at 10,000 metric tons (MT). A portion of this 10,000 metric
tons (MT) is also being exported or processed at source, hence, not all local production is
being consumed by the local grinders prompting them to import cocoa beans from other
countries. It is reported that the Philippines imports 50,000 metric tons (MT) of cocoa and
cocoa preparations to meet the local demand.
The presence of players from all stages in the cacao value chain places the Philippines
at a competitive edge. Locally, the discrepancy between the grinding requirements
of manufacturers and the existing national production entails more opportunities for
production expansion to meet local demand. In addition, local processors offer higher
buying price for cocoa beans compared to bean exporters.
For bean exporters, more opportunities are open due to the widening of supply and
demand gap in the world market. A 10% market share in the world supply may provide a
profitable income to the country and its producers.
International
The spread of the COVID-19 pandemic in the early part of 2020 had led to disruptions
of supply chains, industries and markets across the globe. Just like the other sectors,
the global cocoa and chocolate industry was affected by the changing demand and
distribution channels in one way or another. Nevertheless, according to Fortune Business
Insights (2020), the global cocoa and chocolate market size is still forecasted to grow
exponentially with the increasing demand for specialty and premium chocolates in the
58 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
developed economies. The market may hit USD 67.22 billion by 2025 while presenting a
compound annual growth rate of 5.7% between 2018 and 2025.
There is also an increasing consumer interest in single-origin chocolates. These are made
from cocoa beans produced in a specific country, region or even a specific plantation.
Due to the climate and soil, together with the techniques of cacao farming and
harvesting, origin chocolates has its own signature flavor profile.
On the other hand, value-added cocoa-based products like chocolates are being made
predominantly in non-cacao producing countries such as the United States and European
countries. At present, Europe remains the main market for premium quality beans since
majority of the grinders are based in the country. Of the 60% world grinding capacity,
39% are from grinders based in Europe, while the remaining 22% are based in America.
This elucidates why main exporters of cacao and its preparations in 2015 were from
countries in Europe such as Germany and Netherlands. Cacao producing countries such
as Cote d’Ivoire and Ghana were the top exporters of cocoa beans in 2015.
With the increasing awareness and concerns on healthy eating, healthy alternatives within
chocolate confectionery may be included to the current offerings. Major brands seek to
affect the direction of new product development over the next five years. For example,
there were reports that Nestlé has created a vegan version of its popular Kit Kat brand of
lines (called Kit Kat V). This poses a challenge to cacao producing regions as most of the
cacao farms are small holdings owned by farmers who have limited investment.
On the other hand, the growing demand for sustainably produced cocoa beans entails
more profitability to farmers, which consequently demands higher prices for the premium
quality beans they produce. This is observed over the last decade especially in Northern
and Western Europe. In 2018, the World Cocoa Berlin Declaration was released, which
recognizes that a sustainable cocoa sector can only be achieved through collaboration.
In addition, the first international standard for sustainable and traceable cocoa was
published in May 2019. Hence, it is increasingly necessary for producers to transform
their current farming practices to more sustainable ones, such as the utilization of fewer
synthetic fertilizers and conduct of good water management.
60 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PRIORITY CONCERNS
& OPPORTUNITIES/
CONSTRAINTS &
OPPORTUNITIES
This updated Cacao and Chocolate Industry roadmap is a revision of the 2016-2022
Harmonized Cacao Industry Roadmap. It is anchored on the principle of clustering and
localization. The approach is scientific and dynamic as it will be backed-up by science and
will be evaluated and revised, when deemed necessary, yearly. The aim to be globally
competitive and sustainable is in line with the context in making the cacao industry
environmentally sound, socially desirable, and economically viable.
One Sector-One Voice is one of the avenues that the cacao stakeholder wants to pursue.
Through the leadership of the Philippine Cacao Industry Council (PCIC), in co-leadership
with the Department of Agriculture (DA), the Philippine Cacao Industry Association, Inc.
(PCIA) will be organized and registered at the Securities and Exchange Commission (SEC)
as a private organization composed of cacao industry stakeholders. It will serve as the
Private sector partner and counterpart of the PCIC in the promotion of the Cacao Industry
through the effective implementation of the Harmonized production and postharvest
protocols and Action Plans stipulated in the Cacao and Chocolate Industry Roadmap.
Implementation of the revised roadmap will be localized to ascertain timely and up-to-
date execution of programs and plans. Yearly review of the roadmap and assessment of
milestones will be performed to ensure that the interventions are properly implemented
and to make revisions on the course of action, when deemed necessary. Moreover, active
participation in local and international events to promote Philippine Brand of quality
cacao will be continued as well as forging linkages with international stakeholders will be
strengthened.
61
On the environmental context, this roadmap seeks to achieve production with special
consideration for the environment. Thus Programs, Activities, and Projects (PAPs) that
will be undertaken to spur development will be in consonance with environmental
preservation and protection.
Socially desirable PAPs for the development of cocoa-growing communities are also laid
down to ensure human resource development especially in cocoa-growing communities.
This is being accompanied with economically viable practices that encourage fair and
profitable supply chain with the goal of attaining inclusive business growth with much
emphasis on the economic well-being of the cocoa farmers.
Philippine cocoa production is less than 0.1% of the global production. Philippines,
Thailand and Vietnam share the 1% out of the 13% production of Asia, while Indonesia
and Malaysia share the remaining 12%. The production and market position of the
Philippine cocoa bean should be geared towards the Fine Flavour Bean (FFB) so as not to
compete in the Bulk Bean (BB) market, which accounts for 95% of the world production.
FFB accounts for only 5% of the world production but commands a much higher price.
In addition, production of FFB will provide the right quality of beans needed to support
the development of the Philippine Chocolate Industry. This is also one way of de-
commoditizing the products so as not to be greatly affected by the price fluctuations in
the global market, thus bringing more income to the farmers.
For the aforementioned plans and programs to materialize, it will require a concerted
effort among the industry enablers and the private sectors to ensure an improved delivery
of service particularly on postharvest facilities, among others. Given this aspiration,
stakeholders have set their vision, mission, and goal, which will be the basis and direction
of the industry.
62 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Figure 9: Cacao Industry Road Mapping Process
VISION
A globally competitive and sustainable Philippine Cacao and Chocolate Industry built on
a strong Philippine Brand of quality cacao.
MISSION
• Promotion of cacao production in areas highly suitable for cacao growing to improve
farm efficiency and ensure increased farmers’ income thereby raising their economic
status
64
• Harmonized information gathering to establish a management information system;
and
• Stronger participation in the global cacao and chocolate value chain by building and
promoting Philippine Brand.
The goal is to produce 50,000 metric tons (MT) of quality fermented beans by 2025 to
meet the demand of the export and domestic markets through a 40% annual increase in
production.
In order to achieve the 2025 roadmap goal, the following objectives are deemed to be
attained:
• To ensure availability of quality fermented cocoa beans to support and sustain value-
adding activities;
• To contribute to the goal of attaining inclusive growth and poverty alleviation through:
Increase farmers’ gross income to at least PhP 130,000 per hectare per year;
66 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
RECOMMENDATIONS
FOR POLICIES,
STRATEGIES AND
PROGRAMS
Development Directions
and Upscaling Strategies
The constraints and opportunities identified by the stakeholders served as the basis
in setting the development directions of this roadmap. This is also aligned to the One
DA Reform Agenda: 18 Key Strategies, highlighting the four pillars of consolidation,
modernization, industrialization and professionalization. The following development
directions need to be noted in the implementation of this roadmap:
• Expansion of production areas in areas suitable for cacao growing based on the
Climate and Soil Suitability Map
67
Aligned with the development directions to strengthen, expand and promote the industry
are the seven (7) upscaling strategies, which are as follows:
• Increase production and access to quality planting materials based on the Climate
and Soil Suitability Map
Through this Action Plan, harmonization and integration of development initiatives from
various sectors are made possible. This provides transparency in the programs and
projects implementation as well as facilitates stricter and closer monitoring and evaluation
of industry performance to achieve the target goals.
a. Short-term (2021-2025), which coincides with the National Agriculture and Fisheries
Modernization and Industrialization Plan (NAFMIP) implementation
68 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
The Roadmap Development Team believes that some activities and programs can be
implemented in a year’s period, thus a one-year timeframe was included in the Action
Plan. These activities and programs falling under the one-year period will be evaluated
and modified, when deemed necessary, after a year.
Table 15: The Philippine Cacao and Chocolate Industry Action Plan
Programs, Activities, and Projects Implementing Agencies Timeline
Strategy 1: Increase production and access to quality planting materials based on the Climate and Soil
Suitability Map
Establish additional Nurseries & Budwood Gardens DA, BPI, DA-RFOs, DAR, Short term- 1st Year
at the provincial level Cacao stakeholders
Craft a Harmonized production and postharvest DA, Academe, Technical Short term- 1st Year
protocols experts, Cacao stakeholders
Strengthen Plant Nursery Accreditation and DA, DA BPI accredited Short term- 1st Year
Certification in the Province and accredit more nurseries, Farmers, Cacao
nurseries in the municipalities stakeholders
Forge partnership between farmer/grower and Cacao stakeholders Short term- 1st Year
those with bud wood garden
Improve planting material distribution (DA to DA, PCA, DENR, LGU, DAR, Short term
strengthen the existing foundation groves/ Cacao stakeholders
budwood gardens as source of propagules for
propagation and the LGU to produce quality
planting materials)
Assist in the provision supplies and materials to DA, DOST-PCAARRD, BPI, DA Short term
expand the established nurseries RFOs, LGUs
Facilitate the acquisition and supply of quality DA, PCA, DAR, LGUs, Cacao Medium term
planting materials should only be sourced from stakeholders
accredited nursery operators in a particular region/
province
Provide farm infrastructures (Farm-to-Market Road, DA, DA RFOs, DPWH Medium term
Irrigation system)
Strategy 2: Improve farm productivity by adopting the harmonized production and post-harvest
protocol
Ensure Good Agricultural Practices (GAP) DA, BPI, Cacao stakeholders Short term- 1st Year
certification on Cacao in the provincial level
Implement Integrated Pest and Disease DA, PhilMech, BPI, DOST Short term- 1st Year
Management Program, Plant Nutrition Program Academe, RCPC, Cacao
and Cultural Practices/Management Program stakeholders
Conduct a comprehensive inventory of existing & DAR, DA, LGU, PCA, DENR, Short term
potential/suitable cacao production areas Cacao stakeholders
Implement massive rehabilitation and maintenance DA, PCIC Regional Councils Short term
program all-over the country
Establish LGU-recognized model farm in the DA, LGU, Cacao stakeholders, Short term
municipalities or provinces DILG
Strengthen existing Common Service Facilities to DA, DOST, DTI, Cacao Short term
be Linked to Expert Chocolatiers stakeholders
Conduct of Product Development Clinics and DTI, DOST Short term- 1st Year
Technology upgrading
Provide Cacao Processing Facilities (Common DA, DTI, DAR Short term- 1st Year
Service Facilities)
Utilize cacao pod husk as fuel briquettes, cellulose PhilMech, DOST Short term- 1st Year
acetate, feeds, and pectin as well as cacao dripping
as wine, vinegar, ethanol and pectin
Build cacao waste village enterprise models in PhilMech, DOST, LGU, DA Short term- 1st Year
strategic growing areas RFO
Product upgrading focused on high quality cacao DTI, DA, DOST Short term- 1st Year
mass (Tablea and Chocolate)
Establish/upgrade trading post facilities in the DA, AMAS, DTI, Cacao Short term- 1st Year
regional and provincial level stakeholders
70 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Programs, Activities, and Projects Implementing Agencies Timeline
Strongly recommend decentralization of testing DOH-FDA, DA, DTI, Cacao Short term- 1st Year
hubs for Certificate of Product Registration (CPR) stakeholders, DOST
accreditation to simplify/shorten the processing
time
Conduct Quality standards & certification advocacy DA, BAFS, DTI, DOST, Short term- 1st Year
PhilMech, Cacao
stakeholders, FDA
Organize the Philippine Cacao Festival DTI, DA, Cacao stakeholders Short term- 1st Year
Conduct Annual Celebration of the World DTI, DA, Cacao stakeholders Short term- 1st Year
Chocolate Day
Develop a local awarding system DA, DTI, Cacao stakeholders Short term- 1st Year
Participate in International, National & Regional DTI, DA, Cacao stakeholders, Short term- 1st Year
Exhibits/Fairs DFA
Participate in the Annual Cocoa of Excellence DTI, DA, Cacao stakeholders Short term- 1st Year
Competition in Paris, France
Conduct an Orientation on Single Origin, DA, BAFS, BPI, DTI Short term- 1st Year
Traceability & Geographic Information System (GIS)
Encourage DA-AMAS to be more proactive in its DA, DA AMAS Short term- 1st Year
Actions to support the development of the cacao
industry
Start the ground work for the International Cocoa DA, DTI, Cacao stakeholders, Short term
Organization (ICCO) membership Philippine Government
Apply for Certification of Philippines as suppliers of DA, Cacao stakeholders Short to Medium
Fine Flavour Cacao Beans term
Strengthen market linkages and referrals (local and DTI, DA, BOI Short to Medium
foreign) term
Conduct of Asia Pacific Cacao Conference DA, DTI, Cacao stakeholders Short to Medium
term
Define/Develop Standards for Philippine Cacao DA, DTI-BPS, DOST, DA-BAFS Short to Medium
Products term
Promote the Philippine Brand Quality Cacao Beans AMAS, DTI, Cacao Medium term
and Chocolates Locally and Globally stakeholders, MinDA
Support the Science for Change Programs i.e. BAR, DOST, Cacao Short term- 1st Year
Niche Centers in the Regions for R&D; (NICER stakeholders
Program), R&D Leadership (RDLead), Collaborative
Research and Development to Leverage Philippine
Economy (CRADLE) for RDIs and Industry Program
and Business Innovation through S&T (BIST) for
Industry Program
Improve Postharvest Technologies and establish UPLB, DOST PHILMECH, Short term- 1st Year
R&D Center including Cacao testing laboratory Cacao stakeholders,
facilities Academe
Conduct Cacao Industry Profiling, Mapping and DA, DA-RFOs, DAR, DENR, Short term- 1st Year
Geo-Tagging Cacao stakeholders
Continuously conduct studies on the local and DTI, AMAS Short term- 1st Year
global markets and its channels
Continuously conduct feasibility and suitability DA, BAR, DOST, Academe, Short term- 1st Year
studies based on the suitability map to identify best Cacao stakeholders
regions for selected high potential varieties
Conduct researches based on the needs of the DA, BAR, Academe, Cacao Short term- 1st Year
industry and how to level up the quality of cacao stakeholders, DOST, DTI
beans
Continuously conduct dissemination, promotion PCIC, DTI, DOST, Academe, Short term- 1st Year
and commercialization of developed technologies/ Private sector, DA, BAR
R&D results
Continuously conduct dissemination, promotion PCIC, DTI, DOST, Academe, Short term- 1st Year
and commercialization of developed technologies/ Private sector, DA, BAR
R&D results
Disseminate information on the existence of R&D BAR, DOST, Academe Short term- 1st Year
centers and its function and services
Utilize the research stations in the State, DA, DA BAR, Academe, Short term- 1st Year
Universities and Colleges (SUCs) DOST
Establish additional research centers in different DA, Cacao stakeholders, Short term
islands DOST, Academe
72 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Programs, Activities, and Projects Implementing Agencies Timeline
Analyze high value bean varieties and hybrids DA, DA BAR, Cacao Short to Medium
available globally for potential production in the stakeholders term
country as well as its market demand
Encourage the academe to offer food technology DOST, Academe Short to Medium
course as part of their curriculum in their respective term
schools
Explore R&D Collaborations with Cacao Industry DA, MinDA, DOST, Academe, Long term
Experts DTI
Validate Regional Cacao Industry Baseline data DA, BPI, DAR, DENR, PCA, Short term- 1st Year
and improve harmonized data collection with the PSA, Cacao stakeholders,
help of the LGUs to accurately track production LGUs
and planting in the country to establish Industry
Databank
Generate LGU cooperation and support (local Cacao stakeholders, LGUs, Short term- 1st Year
policy, resources, data generation) DILG
Strengthen capacity building/training of LGUs DA, BPI, ATI, Cacao Short term- 1st Year
(MAOs and PAOs) on Cacao stakeholders
Conduct farmer’s field day and industry forum DA, DOST-PCARRD, ATI, DTI, Short term- 1st Year
LGUs, Cacao stakeholders,
Collaborate with TESDA on the training plan DA, ATI, Cacao stakeholders, Short term- 1st Year
DTI, TESDA,
Provide support to Farmer Information Technology DA, ATI, TESDA, Farm Short term- 1st Year
(FITS) Centers, School on the Air, Farmers’ Field Schools, LGUs, NGOs, Cacao
Schools, etc. stakeholders,
Conduct Skills and Techno Transfer Training on ATI, CIDAMI, DTI, DOST, Short term- 1st Year
Postharvest i.e., Cacao Fermentation and Drying Cacao stakeholders, TESDA,
DA-PhilMech, Farm Schools
Connect grower associations and processors DA, AMAS Short term- 1st Year
through contract buying programs
Promote agri-preneur and conduct Agri- DA, AMAS, DTI, ATI, Cacao Short term- 1st Year
preneurship Seminars to enable the farmers to be stakeholders,
self-reliant
Conduct of Productivity Enhancement Trainings DA, Cacao stakeholders, DTI Short term- 1st Year
Conduct capacity building for Resource Generation DA, Cacao stakeholders, Short term- 1st Year
Landbank
Develop and implement specific technical training DA, ATI, Cacao stakeholders, Short term- 1st Year
programs for capabilities gaps TESDA, Farm Schools, NGOs
Create an Inter-Agency Convergence Initiatives LGUs, DA, DTI, Academe, Short term- 1st Year
to support Capacity Building Activities for cacao Cacao stakeholders,
processing
Conduct Investment and Techno Forum DTI, DA, CIDAMI, MinDA, Short term- 1st Year
Cacao stakeholders,
Continue the organization of the Philippine Cacao DA, PCIC/PCIA Short term- 1st Year
Quality Awards Competition Program (Cacao Beans
Award)
Encourage youth organizations to participate in the DA, TESDA, ATI, PCIC/PCIA Short term- 1st Year
Cacao Industry as agri-preneurs
Integrate Gender and Development (GAD) DA, GAD, PCIC/PCIA Short term- 1st Year
program in capacitating different stakeholders on
gender equality and women’s empowerment.
Publish a compendium that will compile R&D DA, BAR, PCIC/PCIA, Short term- 1st Year
results Academe, DOST
Digitalization of the Cacao Industry DA, PCIC/PCIA, ATI, DTI, Short term- 1st Year
Academe
Develop and implement traceability training DA, ATI, PCIC/PCIA Short term
programs for small holders
Facilitate the involvement of Philippine Cacao DA, Cacao stakeholders Short term- 1st Year
Industry Council in the government cacao seedling
procurement program
Credit Access Facilitation DA, DAR, DTI, LBP, PCIC/ Short term- 1st Year
• Inventory of financing programs which can be PCIA, ACPC
accessed by cacao growers
o Land Bank of the Philippines Cacao 100 LBP, Cacao stakeholders
o Small Business Corporation (SBC) SBC, DTI, Cacao stakeholders
Financing Program
o DA, DAR, and ACPC-administered credit DA, DAR, ACPC (through
programs partner lending conduits)
74 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Programs, Activities, and Projects Implementing Agencies Timeline
Design Special Programs on Credit DA, ACPC, LBP, Cacao Short term- 1st Year
• Credit & Marketing Assistance Program for stakeholders
Agrarian Reform Beneficiaries Organizations DAR
(ARBOs)
• Credit facilitation through DA’s Loan
Facilitation Teams (LoFTs)2 DA, ACPC
Facilitate financing thru Agrarian Production Credit DAR, DA, Cacao stakeholders Short term- 1st Year
Program (APCP) & Land Bank of the Philippines
Institutionalize a Convergence Mechanism at DA, Cacao stakeholders, DTI, Short term- 1st Year
Regional Level for the preparation of Agency other government agencies,
Budgets and Performance Targets Re: Cacao DA RFOs, LGUs
Industry Development
Institutionalize the membership of the Regional DA, DTI, NEDA Short term- 1st Year
Cacao Industry Councils to the Regional
Development Councils (RDC)
Draft a one-year Action Plan to be drawn from the Cacao Industry Roadmap Short term- 1st Year
short-term five-year Action Plan complete with Development Team
targets, timelines and Persons responsible
Create a Cacao Roadmap Implementation Team Cacao Industry Roadmap Short term- 1st Year
to oversee the implementation of the first year Development Team
Action PLAN. Composed of PCIC, PCIA, DA and
DTI; recommended adjustments on the Roadmap
as needed.
“Raise funds to re-visit the Cacao Roadmap: DA, AMAS, DTI, Cacao Short term- 1st Year
(1) to prepare a more in-depth study of the stakeholders
markets (local and international) and
(2) conduct more comprehensive studies to
identify sites suitable for cacao production
based on the Climate and Soils Suitability
map for cacao, which will form the basis for
PCIC/PCIA strategic Actions following the
principles of localization, clustering and market
demands.”
Involve the participation of the different DA agencies, Bureaus and Short term- 1st Year
government agencies in the implementation of the Attached Corporations,
Cacao Roadmap to ensure a unified Action at the Cacao stakeholders, DENR
national and local level
Organize the Philippine Cacao Industry Cacao stakeholders Short term- 1st Year
Association (PCIA) and register it with the Security
and Exchange Commission (SEC) as a private
organization
Strengthen the collaboration of Regional Councils DA, LGUs, Cacao Short term- 1st Year
with the Provincial councils, LGUs (MAOs and stakeholders
PAOs) in support of the implementation of the
Mandanas Law
Achieve international certification for cocoa beans DA, DTI, Cacao stakeholders, Short term- 1st Year
to add more value to the product
76 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
INDUSTRY CLUSTER
GOVERNANCE
FRAMEWORK
The industry stakeholders recognize the need to strengthen structural capability and
control mechanism in the development and promotion of the cacao industry at the
national level. Thus, initially, the National Cacao Industry Technical Working Committee
(NCITWG) was created on August 2015 to spearhead the cacao industry development
and paved the way for the organization of 15 Regional Cacao Industry Development
Councils.
At the Regional level, Regional Cacao Industry Councils have been established. These
councils spearhead the development of the industry in their respective regions. The
elected chairpersons represent their regions at the Philippine National Cacao Industry
Council (Philippine Cacao). To date, sixteen (16) regional councils and five (5) provincial
councils have already been created.
77
To ensure a harmonized and synchronized industry development as well as instill a certain
level of industry disciple, the following functions and responsibilities of the Philippine
Cacao are further defined below:
• Support Passage of House Bill Nos. 1475, 1771, 3253, 4082, 5344, 5585 and 6429
known as the “Philippine Cacao Industry Development Act”;
• Assist in organizing the Philippine Cacao Industry Association (PCIA), which will be
registered at the Securities and Exchange Commission (SEC) as a private organization;
• Serve as the forum and coordinating body to discuss strategic issues affecting the
cacao industry at the national level;
• Integrate and harmonize development efforts, programs and projects of the private
and government sectors;
The Council is composed of public and private sectors, with at least 60% of the members
coming from the latter. Government representatives are from agencies involved in the
development and promotion of the cacao industry. On the other hand, the private sector
is composed of chairpersons of the Regional Cacao Industry Development Councils and
representatives of cacao industry organizations that are national in scope.
The Council is a private sector led, thus representative from the private sector take the
chairmanship and co-chaired by the DA being the lead government agency. There are
two (2) vice chairpersons, one from the private and another from the government sector
with the latter represented by the DTI. The DTI-XI, being the DTI National Cacao Industry
Cluster Coordinator of the agency, serves as the Council’s secretariat in close coordination
with the DA-BPI. Tenure of office shall be two (2) years. (see Appendix 4)
78 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Monitoring and Evaluation
The PCIC/PCIA together with the Cacao Roadmap Development Team (RDT) is
committed in ensuring that the target goals will be achieved and the action plans be
delivered. Close monitoring and yearly re-visitation of the roadmap will be done in order
to make the necessary adjustments on programs and activities identified.
The PCIC/PCIA once established will come up with a harmonized data collection and
monitoring and evaluation system to keep track of the development of the industry. This
will involve the participation of all stakeholders particularly the participating government
institutions as they will be required to submit periodic report.
Through the harmonized data collection, which will be facilitated with the help of LGUs, a
more accurate tracking of production and planting are expected to be achieved thereby
narrowing, if not eliminating, data gaps particularly on the production area, volume of
production and productivity level.
Monitoring Report Forms will be developed and distributed to concerned agencies for
periodic submission. This will be consolidated by the secretariat and presented to the
council every semester for evaluation.
80 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
REFERENCES
Cacao Industry Development Association of Mindanao Inc., (2012). Cacao Industry Cluster
Roadmap
Department of Agriculture-Bureau of Plant Industry. (2014). Cacao Industry Roadmap
Department of Agriculture-Bureau of Soils and Water Management. Land Resources Evaluation
and Suitability Assessment of Strategic Production Areas: Land Suitability Map (Cacao)
Board of Investments. 2015. The Philippine Cocoa “Tablea” Industry Roadmap, 2015
International Cocoa Organization (ICCO), Quarterly Bulletin Forecasts and Estimates
Philippine Statistical Authority (PSA), OpenStat
Department of Trade and Industry (DTI). (2017). The Philippines in the Cocoa-Chocolate Global
Value Chain
International Institute for Sustainable Development (IISD). (2019). Sustainable Commodities
Marketplace Series 2019, Global Market Report: Cocoa
International Trade Center (ITC) Trade Map accessed through http://www.trademap.org
Climate Information for Agriculture, Department of Science and Technology-Philippine
Atmospheric, Geophysical and Astronomical Services Administration accessed thru https://
www.pagasa.dost.gov.ph/
81
APPENDICES
83
Appendix 1: Agro-climatic requirements for growth and development of Cacao
FACTORS CACAO
Selecting a suitable cacao growing farm is vital in order to ensure maintaining cacao tree’s
vitality and productivity (refer to Annexes: Climate and Soil Suitability Map). An elevation
of 300-1,200 meters above sea level (MASL) is recommended with soil depth of 150 cm
and pH level from 5.0 to 7.5. The area needs to be rich in compounds that serves as
reservoir of nutrients such as organic matter. Cacao thrives best under Type IV climate,
which has an evenly distributed rainfall throughout the year as the ideal rainfall is about
1,250 to 3,000 mm. However, in areas where lesser rainfall occurs, an irrigation system is
recommended. On the other hand, the temperature should be from 18oC to 32oC with
75-90% relative humidity.
The Philippines is among the countries in Asia seen to have a competitive advantage on
cacao production given its strategic location and climatic condition. The three (3) million
(M) hectares of coconut farms ideal for cacao intercropping supplement the industry’s
competitive advantage.
84 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Temperature
Based on the average of all weather stations in the Philippines, excluding Baguio, the
mean annual temperature is 26.6o C. The coolest months fall in January with a mean
temperature of 25.5oC while the warmest month occurs in May with a mean temperature
of 28.3oC. Latitude is an insignificant factor in the variation of temperature while altitude
shows greater contrast in temperature. Thus, the mean annual temperature of Baguio
with an elevation of 1,500 meters is 18.3oC. This makes the temperature of Baguio
comparable with those in the temperate climate and because of this, it is known as the
summer capital of the Philippines.
The difference between the mean annual temperature of the southernmost station in
Zamboanga and that of the northermost station in Laoag is insignificant. In other words,
there is essentially no difference in the mean annual temperature of places in Luzon,
Visayas or Mindanao measured at or near sea level.
Humidity
Humidity refers to the moisture content of the atmosphere. Due to high temperature
and the surrounding bodies of water, the Philippines has a high relative humidity. The
average monthly relative humidty varies between 71 percent in March and 85 percent
in September. The combination of warm temperature and high relative and absolute
humidities give rise to high sensible temperature throughout the archipelago. It is
especially uncomfortable during March to May, when temperature and humidity attain
their maximum levels.
Rainfall
Rainfall is the most important climatic element in the Philippines. Rainfall distribution
throughout the country varies from one region to another, depending upon the direction
of the moisture-bearing winds and the location of the mountain systems.
The mean annual rainfall of the Philippines varies from 965 to 4,064 millimeters annually.
Baguio City, eastern Samar, and eastern Surigao receive the greatest amount of rainfall
The Seasons
Using temperature and rainfall as bases, the climate of the country can be divided into
two major seasons: (1) the rainy season, from June to November; and (2) the dry season,
from December to May. The dry season may be subdivided further into (a) the cool dry
season, from December to February; and (b) the hot dry season, from March to May.
86 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Appendix 2: Climate Suitability Map
88 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 89
90 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 91
92 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 93
94 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 95
96 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 97
98 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 99
100 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 101
102 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 103
104 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 105
106 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 107
108 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 109
110 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 111
112 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 113
114 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 115
116 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 117
118 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 119
120 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 121
122 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 123
124 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 125
126 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 127
128 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 129
130 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 131
132 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
PHILIPPINE CACAO INDUSTRY ROADMAP 2021-2025 133
134 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Appendix 4. Directory of the Philippine Cacao Industry Council
Chairperson:
Co-Chairperson:
Secretariat:
Government Sector:
Dept. of Science and Dir. Leila C. America, Director., DOST (049) 521 8564
Technology PhD PCAARRD [email protected]; tinbar16@
yahoo.com
Philippine Coconut Dennis Andres Manager of (02) 928 4501 loc. 509 / Fax no. (02)
Authority Operations Dept. 926 7631
[email protected]; ofad@pca.
gov.ph; [email protected]
Land Bank of the Edgardo S. Luzano Dept. Head , LBP (02) 405-7450; 405-7309
Philippines
Small Business Ma. Luna E. President & CEO (02) 751 1888 / (02) 813 5720
Corporation Cacanando
[email protected];
[email protected]
Private Sector:
136 D E PA R T M E N T O F A G R I C U LT U R E H I G H VA L U E C R O P S D E V E L O P M E N T P R O G R A M
Membership Representative Designation Contact Details
Non-Government Organizations:
Academe:
University of Southern Dr. Edward Barlaan Agricultural (064) 248 2426; 248 2672
Mindanao Research Center