Tilapia VCA - Luzon A Cluster

PHILIPPINE RURAL
DEVELOPMENT PROJECT
(PRDP)
I-PLAN Component
Luzon A Cluster
VALUE CHAIN ANALYSIS AND

COMPETITIVENESS STRATEGY:
TILAPIA
LUZON A CLUSTER
DEPARTMENT OF AGRICULTURE
Luzon A Cluster
MB/II.- TILAPIA VCA-LUZON A, PRDP-DA December 2014 Página 0

CONTENTS
CONTENTS Page
EXECUTIVE SUMMARY 6
Section 1: INTRODUCTION 11
A. Background Information and Objectives 11
B. VCA Objectives 12
C. Methodology and Approach 13
Section 2: OVERVIEW OF THE INDUSTRY 14
A. Production Description 14
B. Production Trends 18
Section 3: NATURE AND STRUCTURE OF INDUSTRY 31
A. Value Chain Mapping 31
B Key Players and Function 35
C. Interfirm Relationship and Supply Chain Governance 46
D. Price and Cost Structure 47
Section 4: MARKETS AND MARKET OPPORTUNITIES 50
A. Markets and Market Trends 50
B. Price Trends 62
Section 5: SUPPORT SERVICES 65
A. Financial Services 65
B. Non-Financial Services 66
Section 6: ENABLING ENVIRONMENT 68
A. Formal Rules, Regulations, and Policies 68
B. Informal Rules and Socio-Cultural Norms 68
Section 7: CONSTRAINTS AND OPPORTUNITIES 70
Section 8: COMPETITIVENESS DIRECTIONS 75
A. Competitiveness Vision 75
B. Priority Constraints/Opportunities and Interventions 76
Section 9: CONCLUSIONS AND RECOMMENDATIONS 89
Annex 1: Prioritization of Interventions – Ilocos Region 91
Annex 2: Prioritization of Interventions – Cagayan Valley 92
Annex 3: Prioritization of Interventions – Central Luzon 93
Annex 4 to 6: Industry Data 94
MB/II.- TILAPIA VCA-LUZON A, PRDP-DA Página 1

LIST OF TABLES
No. Title Page

1 Major Tilapia Products in International Trade and Main Suppliers 16
2 World Production of Tilapia, 2009 to 2013 18
3 Tilapia Production in the Philippines, 2009 to 2013 21
4 Breakdown of Tilapia Production in the Philippines by Culture Environment and 22
System, 2013
5 Tilapia Production in CAR, 2009 to 2013 23
6 Breakdown of CAR Tilapia Production by Culture System, 2013 24
7 Tilapia Production in Ilocos Region, 2009 to 2013 25
8 Breakdown of Tilapia Production in Ilocos Region by Culture System, 2013 26
9 Tilapia Production in Cagayan Valley, 2009 to 2013 27
10 Breakdown of Tilapia Production in Cagayan Valley by Culture System, 2013 28
11 Tilapia Production in Central Luzon, 2009 to 2013 29
12 Breakdown of Tilapia Production in Central Luzon by Culture System, 2013 29
13 Standard Price of Fries and Fingerlings 37
14 Advantages and Disadvantages of Floating and Sinking Feeds 38
15 Different Culture Systems for Tilapia 41
16 Indicative Costs and Returns for One Hectare Tilapia, 2014 47
17 Relative Financial Position of VC Players: Whole Tilapia (1 kg) for Retail Market 48
18 US Tilapia Frozen Whole Imports from selected sources, 2009 to 2013 50
19 US Tilapia Fresh Fillet Imports from selected sources, 2009 to 2013 51
20 US Tilapia Frozen Fillet Imports from selected sources, 2009 to 2013 54
21 World Imports of Fresh Fillets, 2012 and 2013 55
22 World Imports of Frozen Fillets, 2012 and 2013 56
23 Tilapia Self-Sufficiency Level and Surplus Production in Luzon A Cluster, 2013 57
24 Tilapia Self-Sufficiency Level and Surplus Production in Luzon A Cluster, 2013 60
25 Average US Import Price for Fresh Fillet, 2009 to 2013 63
26 Average US Import Price for Frozen Fillet, 2009 to 2013 63
27 Key Public Sector Providers of Non-Financial Services 67
28 Constraints and Opportunities 70
29 Summary of Constraints/Opportunities and Interventions 82

LIST OF FIGURES
No. Title Page

1 NILE TILAPIA – GIFT STRAIN 14
2 PRODUCT FORMATS OF TILAPIA 15
3 COMMON PRODUCT FORMS IN LUZON A REGIONS 16
4 BELTS FROM LATIN AMERICA MADE OF TILAPIA SKIN 17
5 ASC CERTIFIED TILAPIA FARM IN INDONESIA 19
6 TYPICAL PRODUCTION CYCLE IN BRAZIL 20
7 AMBUKLAO DAM IN BENGUET: HOME OF THE TASTIEST AND CLEANEST TILAPIA 24
8 RACEWAY SYSTEM IN TUBO - ABRA 25
9 RICE – FARM SYSTEM IN IFUGAO 25
10 MAGAT AQUACULTURE PARK IN ISABELA 27
11 TILAPIA FISHPONDS IN MIINALIN - PAMPANGA 30
12 VC MAP: WHOLE FISH FOR RETAIL MARKET 31
13 FLOW OF TILAPIA IN CAR: WHOLE FISH FOR RETAIL 32
14 FLOW OF TILAPIA IN ILOCOS REGION: WHOLE FISH FOR RETAIL 32
15 FLOW OF TILAPIA IN CAGAYAN VALLEY: WHOLE FISH FOR RETAIL 33
16 KEY MARKETING CHANNELS OF CENTRAL LUZON TILAPIA INDUSTRY 33
17 FLOW OF TILAPIA PRODUCED BY CENTRAL LUZON 34
18 VALUE CHAIN MAP: PROCESSED TILAPIA 35
19 FLOW OF SUPPLY OF TILAPIA FRIES AND FINGERLINGS IN LUZON A CLUSTER 36
20 SOME OF THE COMMERCIAL TILAPIA FEEDS AVAILABLE IN THE MARKET 38
21 DUCKWEED AS FEED SUPPLEMENT IN TILAPIA FARM IN ISABELA 39
22 HARVESTING IN FRESHWATER POND 42
23 HOUSING PROVIDED BY FARM OWNER FOR CARETAKER AND HIS FAMILY 42
TRUCKS OF FISH DEALER WAITING FOR THE COMPLETION OF THE HARVEST
24 43
(MINALIN – PAMPANGA)
KENO FOODS INC. AND THE MULTI-COMMODITY SOLAR TUNNEL DRYER
25 44
DEVELOPED BY PHILMECH
26 FISHER FARM IN BULACAN 45
27 RELATIVE FINANCIAL POSITION OF VC PLAYERS: WHOLE FISH FOR RETAIL MARKET 49
CIRCULAR CAGE – REGAL SPRINGS HONDURAS – LEADING FRESH TILAPIA SUPPLIER
28 53
TO THE UNITED STATES
600 HECTARES AQUAFARM IN COSTA RICA – AQUACORPORACION INTERNATIONAL
29 53
WHICH IS AFFILIATED WITH A PROCESSING PLANT
30 LIVE TILAPIA IN HONG KONG AND SINGAPORE 58
31 PRICE OF RED TILAPIA IN HONG KONG SUPERMARKETS 59
32 SASHIMI GRADE BRACKISHWATER TILAPIA FILLET 60

No. Title Page
ANNUAL PER CAPITA CONSUMPTION OF TOP 3 FOOD FISH IN THE PHILIPPINES:
33 61
TILAPIA, MILKFISH, ROUND SCAD
AVERAGE PRICES OF MAJOR TILAPIA PRODUCTS IN THE WORLD MARKET, 2012
34 62
AND 2013
35 AVERAGE US IMPORT PRICE FOR FROZEN WHOLE TILAPIA, 2009 TO 2013 62
36 AVERAGE WHOLESALE PRICE OF TILAPIA IN LUZON A REGIONS, 2009 TO 2013 64
37 SYNTHESIS OF COMPETITIVENESS VISION 75

ACRONYMS
ASC Aquaculture Stewardship Council

BANPIKOI Bantey-Pesik-Kiweng Organization Incorporated
BAS Bureau of Agricultural Statistic
BFAR Bureau of Fisheries and Aquatic Resources
CLSU Central Luzon State University
BSE Bovine Spongiform Encephalopathy
DA Department of Agriculture
DENR Department of Environment and Natural Resources
DOST Department of Science and Technology
DTI Department of Trade and Industry
FAO Food and Agriculture Organization
FAC Freshwater Aquaculture Center
FGD Focus Group Discussion
FFF Fisheries Financing Program
GETEXEL Genetically Enhanced Tilapia Excellent strain
GIFT Genetically Improved Farmed Tilapia
GIFTFF Genetically Improved Farmed Tilapia Feedmix Fortified
GST GenoMar Supreme Tilapia
GAqP Good Aquaculture Practices
GIS Geographic Information System
GMP Good Manufacturing Practices
HACCP Hazard Analysis and Critical Control Point
KII Key Informant Interview
GIFT FI Genetically Improved Farmed Tilapia Foundation, Inc.
LBP Land Bank of the Philippines
MC Moisture Content
MCSTD Multi-commodity Solar Tunnel Dryer
NCCAP National Climate Change Action Plan
NFFTC (BFAR) BFAR - National Freshwater Fishery Technology Center
PDAP Partnership for Development Assistance in the Philippines
PDP Philippine Development Plan
PFO Panopdopan Fisherfolks Organization
PNG Philippine National Grade
PSA Philippine Statistics Authority
PRDP Philippine Rural Development Project
BFAR-ROS BFAR-Regional Outreach Stations
SEAFDEC Southeast Asian Fisheries Development Center
SSF Shared Service Facility
UNDP United Nation Development Programme/
TSC Tilapia Science Center
UP-MSI University of Philippines – Marine Science Institute
USDA United States Department of Agriculture
WII Weather-based Index Insurance

EXECUTIVE SUMMARY
Pond farming of tilapia in the Philippines began with the introduction of the Mozambique tilapia
(Oreochromis mossambicus) in Central Luzon in the 1950s. This was not, however, successful as the
Mozambique tilapia did not perform well. In the early 1970s, the Nile tilapia (Oreochromis niloticus)
was introduced into the Philippines and was considered as a much better fish for farming. When
yields started to decline, a ten year multinational effort for genetic improvement was launched
which led to the development of the successful GIFT strain (Genetically Improved Farmed Tilapia).
Several different strains of Nile tilapia have now been developed within the Philippines and
overseas. The Bureau of Fisheries and Aquatic Resources (BFAR) has developed the Genetically
Enhanced Tilapia Excellent Strain (GETEXEL), and the Freshwater Aquaculture Center of Central
Luzon State University (FAC/CLSU) has bred the FaST strain. In Norway, a private company Genomar
markets the fish under the name GenoMar Supreme Tilapia (GST). The agreement of GIFT
Foundation with Genomar ceased in 2005 and efforts were made to obtain research fund to
continue the selection program. In April 2010, a new collaborative research partnership was formed
among three institutions: BFAR, FAC/CLSU and Feedmix Specialist. The GIFT strain was renamed to
GIFT Feedmix Fortified (GIFTFF). GIFT and GIFT derived strains account for around 70% of total tilapia
production in the Philippines (WorldFish website).
Tilapia meat is typically white with a mild flavor and firm texture. It can easily be substituted in
recipes for snapper, pompano, cod, and seabass. It can be broiled, fried, grilled, baked, poached,
sautéed, or steamed. The flesh has a medium fat content, but very high protein content. Tilapia
absorbs flavor from the water it is raised in so the supply source is very important.
The most common ways in which tilapia is traded are: live, fresh whole (gutted), frozen whole
(gutted), fresh and frozen fillets. In Central and Northern Luzon regions, tilapia is usually sold live
and fresh whole with the former as the most preferred form. Tilapia is usually consumed as fresh
and only small quantity of the total supply is processed into fillets, nuggets, tocino, rolls, and
“tilanggit”.
In importing countries such as the United States and the European Union, the most important
product form is fillets. Fillet is the highest growing segment and consumers are becoming very
familiar with this product type. Central Luzon has two companies that produce and export fillet.
Fillet yield of tilapia is very small, at 30-33%. For some fillets sold as deep-skinned, the yield can even
decline further to 28%. A main constraint faced in fillet production is the lack of supply. Tilapia fillet
production requires 700 to 1000 grams fish for maximum fillet recovery rate. Culture period to reach
the required size will be about 8 to 10 months under the current technology and system. Farmers
prefer to sell their tilapia produce at a shorter period of time rather than extend it to 8 months
because it will mean more feed consumption and thereby higher risk of loss of their stocks due to
typhoons and flooding.
In the tilapia sector in Luzon A Cluster, there are two key value chains, namely: a) Whole fish for
domestic retail market; and b) Intermediate/Process tilapia. Of these two chains, the whole fish
value chain is the most dominant and absorbs most of the production. Although Philippines is the
fifth largest producer of tilapia in the world, the country lags behind in the export market. This is
primarily because the country’s production is geared for the domestic market where the most
marketable size is just about 200 to 250 grams. International markets generally prefer 400 to 500
grams for whole fish and 700 to 1,000 grams for fish that will be filleted. A report from AquaFish
also recounted the experience of an exporter who had to terminate a contract with an importer due
to difficulties encountered by the company’s contract growers in meeting the 60 tons/month

requirement of whole tilapia (800 to 1000 grams). During the recent years though, it would seem
that there has been some marked increase in the volume of tilapia exported. From 300 MT in 2008,
GLOBEFISH (FAO) June 2014 report indicated that exports from the Philippines reached 6,254 MT.
According to the same report, the 2013 volume represented an increase of 185% over 2012.
International tilapia markets have expanded significantly from almost zero in 1991 to about US$ 1.7
billion (just for frozen and fresh fillet and frozen whole tilapia) in 2013. The three key tilapia
products being traded in the international market are: frozen whole, fresh or chilled fillet, and the
frozen fillet. International trade of live tilapia is also starting to emerge.
Producers exporting tilapia have different comparative advantages, and specialize in different
product forms. Factors affecting this are the producers’ different levels of production cost and their
geographical proximity to key importing countries of a particular product format. Asian countries like
China, Taiwan, Indonesia, Thailand, and Vietnam supplies most frozen exports because of their low
technological investment to produce tilapia. China remains the largest exporter of tilapia in the
world. South and Central America supply most fresh tilapia imports due to their relatively close
proximity to the United States, which is the main market for fresh or chilled Tilapia. The United
States is the largest importer of tilapia across all product forms in the world. Emerging markets for
tilapia include African countries, European Union, and the Middle East.
Tilapia production surged around the world during the 1990’s and early 2000’s. Tilapias are now the
second most popular farmed fishes after the carps, with global production estimated to have
reached 3,100,815 MT in 2013. The increase in production was primarily in response to the growing
popularity of tilapia as a competitive whitefish species around the world and the development of
large consumer markets in North Americas and Europe, which are purchasing fish grown in tropical
countries with year-round production and relatively low costs.
Asia represents about three quarters of world tilapia production with China as the leading producer.
Quality seeds, water availability, labor and farming experience, according to Zhao (2011) are key
factors that have contributed to the rapid growth in tilapia production in China. Egypt is the 2nd
largest producer of tilapia. Tilapia production in Egypt is primarily for domestic consumption. The
third largest tilapia producing country is Indonesia. Production in Indonesia is geared both for the
international and domestic markets. Starting 2012, Brazil has overtaken Philippines in tilapia
production and became the 4th largest producer in the world. Tilapia was first introduced to Brazil in
1971 from the Ivory Coast, West Africa, but it was not until the early 1990’s when genetically
improved STOCKS, (GIFT, Chitralada and Fishgen’s YY male technology) were introduced to Brazil
that production really escalated. Also high density cage culture was started in the larger water
bodies combined with monosex culture, improved locally produced feed and a far greater awareness
of tilapia as an excellent food source. Tilapia farming is undertaken by both small farmers and large
companies such as Netuno International, which is 50% owned by Japan’s Nissui group.
From 2009 to 2011, Philippines was the 4th largest producer of Tilapia in the world. In 2012 and
2013, the country slipped into the 5th place with the surge in production in Brazil. Between 2009
and 2013, tilapia production in the Philippines increased by 3% or from 260,911.05 MT in 2009 to
268,818.74 MT in 2013. The relatively higher percentage increase in production between 2012 and
2013 may be attributed to increased motivation among farmers to increase stocking density and
yield due to increased demand from the domestic market. During the recent years, farmers had
difficulties in increasing production due to lack of supply of fries during stocking time. In some cases
also, farmers have to align their production cycle to water availability especially if they are
dependent on the irrigation system as source of water for their ponds.

The top 2 producing regions in 2013 were Central Luzon, which accounted for 45% of production,
and Calabarzon, which had a 34% percentage share to national production. These two regions
accounted for 79% of the Philippine production in 2013. Cagayan Valley and Ilocos Region ranked
third and fourth,, respectively but levels of production were less than 5% of Central Luzon.
Production of tilapia in the Philippine is done in a range of culture environments and systems,
including freshwater and brackishwater ponds, cages and pens, small farm reservoirs, rice-fish
integrated systems and, although negligible, even marine fish cages. Freshwater tilapia accounted
for 94.22% of Philippine production in 2013. Tilapia reared in brackishwater comprised 5.72% of the
2013 production. In both brackish and fresh water, the earthen pond is the most culture system in
use.
Experiences of hatcheries during the recent years indicate their high vulnerability to adverse
weather conditions. Due to adverse weather conditions (either too hot or too cold, prolonged
summer and rainy seasons), fry production has been seriously hampered and hatchery operators are
not able to neither reach their optimal production nor serve farmers at the time that they needed
the seeds. The erratic production affected the whole industry. Farmers were not able to stock on
time which was detrimental in various ways depending on the culture system. Late stocking for
farmers dependent on rainfall and irrigation facilities meant premature harvests. For many of the
farmers, late stocking beyond the favorable period meant increased risks.
Likewise, due to spawning and egg production problems brought about by erratic weather
conditions, grow-out farmers had no choice but to buy and stock size 22 fries which are still
vulnerable to predation and historically with low survival rates compared to bigger sized seeds. This
implied longer cultivation period in addition to low survival rate.
The stocking size of tilapia for grow-out pond production is dictated by the common size of fries and
fingerlings available from tilapia hatcheries. During the recent years, the most readily available fries
are sizes 22 and 24. A common practice in Northern and Central Luzon regions is to directly stock
the fries or fingerlings into the grow-out pond. In other areas like Batangas and countries such as
Indonesia and Vietnam, fries are grown into size 10 or 14 in nurseries. The nurseries are set-up as
separate businesses apart from hatchery and grow-out systems. As per experiences of farmers in
Luzon A Cluster, mortality rate increased from 30% to 50% when they started stocking size 22 and 24
fries. The low survival rate reduces profit margins as well as raises the costs of production. Bigger
size fingerlings are thought to survive better, grow faster, reach market size sooner and, perhaps,
pave the production of bigger size tilapia for fillet processing and for export. Direct stocking of size
22 fries in grow-out ponds is also an inefficient use of pond facilities because of low fish biomass
during the first month of production.
The high local production of tilapia particularly in Central Luzon and the huge export market makes
this fish a potential source of dollars for the country. With current production already sufficient to
meet domestic requirement, there is a need to develop markets outside of the country. Likewise, to
avoid an oversupply in the domestic whole fish market segment, the tilapia industry has to divert
some of it production towards supplying the fish fillet chain. A main constraint, however, is that
Filipino tilapia farmers lack the capacity to grow tilapia profitably at the size and weight required by
fillet processors. Unless a more cost efficient system to produce bigger sized tilapia is developed and
adopted, the Philippines will never be able to compete for the export of this fish. Likewise, a stable
year round production is necessary if Luzon A Cluster would want to penetrate the fillet market
segment.

Among resource poor farmers, the main method to feed fish is to support algae production in ponds
by adding livestock manure or plant material into water. Nutrient intake is limited when the fish is
grown using only this method resulting to low yield and stunted growth. Likewise, when the scale of
operations increases, feed requirements cannot be always met by pond fertilization and collection of
feed from the immediate vicinity. Supplementary feed especially commercial feeds require cash
outlays which resource poor farmers cannot pay outright. Lack of cash and difficulties in accessing
credit are major barriers for the poor to undertake aquaculture on their own. Feed companies are
generally more inclined to offer credit to farmers that can prove that they have the capacity to pay
and those with volume requirements. There are nutrition-rich ingredients that can potentially be
made into feeds to supplement commercial feeds but farmers lack the experience, know-how, and
facilities to fully utilize these resources. Because feed comprises the major costs of a tilapia farming
business, a well-performing and cost-effective feed formula and feeding regime are important
considerations in making fish farming viable.
Consumers are increasingly concerned about food safety and the impacts of food production on the
environment. The tilapia industry in Northern and Central Luzon, if it wants to be a player in
international trade, will need to promote compliance to Good Aquaculture Practices (GAqP) at the
minimum and the achievement of sustainability certification to further boost its competitiveness
and the long-term viability of the industry. In adopting these standards, the tilapia industry can
better meet the demands of the growing global market for wholesome seafood produced in an
environmentally and socially responsible manner.
The tilapia industry in general has achieved a level of economic success that now must be
safeguarded by creating a sustainable development approach that reaches both smallholders and
large operators. Tilapia is sensitive to changes in salinity, water quality and sea surface temperature.
Important climate-related risks identified include extreme temperatures (hot and cold), excessive
rainfall, prolonged cloud cover, flood and drought. Low survival rate and slow growth are among the
key problems faced by the industry. Weak compliance to GAqP and lack of capacity to mitigate
effects of climate change undermine sustainability and profitability of operations. There is a need to
develop onsite capacity to monitor water parameters to determine changes in salinity and
temperature and the effect or reaction of tilapia. Avoiding and managing climate risk is a
prerequisite for the tilapia industry to continue its upward trajectory.
Gustatory quality is also important. Taste tests have demonstrated that tilapia does not absorb off-
flavor from animal manures, but they do absorb off-flavors produced by certain blue-green algae
and other microorganisms. Improved water quality management and postharvest practices can
reduce risks of producing off-flavor tilapia.
Small volumes of output pre-dispose smallholders to weak bargaining position in the market.
Incomes are eroded due to lack of economies of scale (e.g., small individual purchases of inputs, high
transport cost per unit of produce, etc.) Farmers in the same village tend to help each other in their
farms but there have been little initiatives to exploit opportunities with respect to collective
procurement and marketing.
From a predominantly domestic market orientation, the tilapia industry in Northern and Central
Luzon regions hopes to evolve into one that supplies both domestic and export markets with Central
Luzon and Isabela tilapia industries as the frontrunners in the development of the export supply base
for fillet and whole fish. To become a globally competitive, technologically appropriate tilapia
industry that meets increasing demand for fish that are affordable and meet high standards for
safety, quality, and environmental stewardship, with maximum opportunity for profitability and

economic growth, the following priority areas for investment were identified by industry
stakeholders and players:
a) Adoption and implementation of climate smart hatchery/fry production system
b) Establishment of nursery enterprises to produce bigger sized fingerlings
c) Establishment of village level feed processing plants to produce low-cost nutritious feed to
supplement commercial feeds and adoption of cost-reducing feeding strategies
d) Improvement of flow of services to facilitate compliance to GAqP and increase climate change
resilience
e) Strengthening of environmental management system in low lying areas in Pampanga
f) Establishment of common service facilities to ensure premium quality and facilitate collective
marketing
g) Improvement of horizontal collaboration especially among farmers

Section 1:
INTRODUCTION
A. BACKGROUND INFORMATION AND RATIONALE 1
The agricultural sector strategy (Agri-Pinoy) embodied in the Philippine Development Plan (PDP) for
2011-2016 advances the principles of inclusive growth, food staple sufficiency, natural resource
management and area-based development. Agri-Pinoy also includes the following new strategies: (i)
institutionalizing regionally-based, spatial planning (ii) developing a systems approach for both
planning and resource allocation; (iii) providing the critical infrastructure needed by priority value
chains; and (iv) building a more resilient production base to accommodate fluctuations in global
markets and effects of climate change. Complementing the Agri-Pinoy strategy is the National
Climate Change Action Plan (NCCAP) which highlights the priority to be given to the rural sector in
pursuing climate adaptation measures.
The Philippine Rural Development Project (PRDP), a flagship project of the Department of
Agriculture (DA), is aligned with the Agri-Pinoy strategy. It is a six-year program (2013-2019)
designed to establish the government’s platform for a modern, climate-smart and market-oriented
agri-fishery sector. Externally, it will focus on expanding market access and improving
competitiveness. Internally, it will introduce reforms in operating the DA bureaucracy. Specifically,
it aims to achieve the following development objectives:
 At least, 5% increase in annual real household incomes of farmer beneficiaries; 30%

increase in income for targeted beneficiaries of enterprise development
 7% increase in value of annual marketed output
 20% increase in number of farmers & fishers with improved access to DA services
To facilitate the achievement of above objectives, the program has four main components, namely:
 I-PLAN: Investment for AFMP Planning at the Local and National levels
 I-BUILD: Intensified Building-Up of Infrastructure and Logistics for Development
 I-REAP: Investments for Rural Enterprises and Agricultural and Fisheries Productivity
 I-SUPPORT: Implementation Support to PRDP
The design of PRDP and its implementation aspects draw heavily on the experiences of the
Mindanao Rural Development Projects (MRDP 1 and 2), a program that has been successfully
implemented over the past decade. PRDP adopts a value chain development approach as a platform
for promoting inclusive, climate resilient, and sustainable growth in key agricultural subsectors and
value chains.
The focus of this value chain study is the Tilapia subsector in Luzon A Cluster. Tilapia, dubbed as the
'food fish of the 21st century', is one of the most cultured freshwater fish in Northern and Central
Luzon regions. Philippines is among the top producers of tilapia in Asia.
Fish is an important part of the Filipino daily diet. Since yields from capture fisheries are not
expected to increase, an emphasis is being placed on the aquaculture sector’s ability to provide
increasing quantities of food fish. Owing to its palatability and adaptability to various culture
1
Overview of PRDP was taken from the Program Information Document – World Bank website.

conditions, tilapia has grown to be an important food fish for mass domestic consumption in the
Philippines. It ranks as the second most important fish culture next to milkfish. The tilapia industry
provides an affordable source of animal protein for the growing population. During the past two
years, tilapia has replaced “galunggong” or round scad as poor Filipino's meat. Tilapia is regarded as
a healthy alternative to meat and is sought for its taste, freshness, and low price. Central Luzon is of
increasing importance in supplying tilapia from grow-out ponds to other population centers. At
present, it is the country's top producer of tilapia. .
An estimated 280,000 people in the Philippines benefit directly or indirectly from employment in the
tilapia industry. Tilapia farming provides self-employment for farmers and their family members as
well as outside employment for caretakers, laborers, and harvesters. Tilapia growout operations
have backward linkages (hatchery/nurseries and suppliers of feeds and other inputs) and forward
linkages (harvesting, postharvest handling, processing, and marketing), all of which also absorb
labor. Such indirect employment could be substantial, but is difficult to quantify in the absence of
accurate data.
The popularity of tilapia as a food fish has spread around the world. The relatively high local
production of tilapia and its huge export market makes this fish a potential source of dollars for the
Filipinos. Moreover, exporting tilapia will stabilize its local market price that will benefit the tilapia
fish farmers. It is imperative though to improve farm productivity to bring down production cost.
B. OBJECTIVES OF THE VCA
This report provides an overview and analysis of the tilapia industry with the aim of identifying main
leverage points and key strategies to improve its competitiveness. It will provide the basis for the
formulation of the Provincial Commodity Investment Plans and will lay the foundation for PRDP’s
cooperation with the private sector and other government agencies active in the tilapia industry.
Specifically, the value chain analysis aims to:
a) Provide an in-depth understanding of the range of factors and relationships that affect the
performance of the tilapia industry in Luzon A regions, including end markets, enabling
environment and coordination/cooperation among firms.
b) Identify in a participatory process the systemic chain level issues that hinder or promote the
gainful participation of rural households, sustainability of the chain, and its competitiveness in
general.
c) Under a participatory process, identify and prioritize interventions needed to overcome

bottlenecks throughout the chain that would foster value chain competitiveness and climate
change resiliency.
d) Identify and explore how to catalyze private and public sector stakeholders in the tilapia industry
to collaborate for improved industry performance

C. METHODOLOGY AND APPROACH
An initial desk study was conducted to collect and summarize information from currently available
reports and studies. It provided guidance to issues that needed to be the focus of field research. The
field work component of the study was conducted using qualitative research techniques particularly
value chain analysis workshops, key informant interviews (KII), and focus group discussions (FGDs).
Key informants and participants to the workshops and FGDs consisted of farmers, traders,
processors, and representatives from relevant government agencies. Key informant interviews
were used for collecting data on individuals’ perspectives, experiences, and quantitative data. FGDs
were effective in generating broad overviews of issues of concerns to the groups or subgroups
represented and in the triangulation/vetting of information obtained from the KII.
Constraints and interventions were identified and further elaborated based on iterative and
inductive analysis of responses during the KII and FGD/Stakeholders Workshop primarily from the
following perspectives:
 Context of key informants and FGD participants
 Third party observations (e.g., government agencies, providers, VC facilitators with

experience in peanut VC development projects, etc.) were important for suggesting
important issues to explore and for substantiating the results of the company interviews
 Experiences of other tilapia producing countries
 Past assessment studies of the Philippine tilapia industry
Competitiveness is generally defined as the ability to efficiently produce goods (and services) for
which there is high demand that leads to increased income generation capacities that are
sustainable in the future. Strategy is about choice --- choosing what to do to build competitiveness
from a long list of viable and promising options. Given the competing and varied incentives and
motivations among and between stakeholders and players, the process required iterative ranking
and prioritization, arriving at the end a consensus on what needs to be done within the next 5 years.
The competitiveness strategies proposed in this report reflect the choices made as a result of
extensive analysis of the industry’s key constraints and a dialogue with stakeholders and players.

Section 2:
OVERVIEW OF THE INDUSTRY
A. PRODUCT DESCRIPTION
The tilapia group comprises 60 species, ten of which are used as food fish. Its origins are in the lakes
of tropical Africa and the Near East. Tilapia is often called “St. Peter’s fish” because according to the
Book of Mathew (17:27) the fish which St. Peter caught was a tilapia. Also, the miracle of Jesus Christ
in which it says a crowd of five thousand people were fully fed with five loafs of bread and two fishes
(Mathew 14:15-21) may have also been a tilapia since this is the species most found in Lake Tiberius
(Sea of Galilee) in historical Palestine. It is also called as Nile mouth brooder, or Nile perch.
Pond farming of tilapia in the Philippines began with the introduction of the Mozambique tilapia
(Oreochromis mossambicus) in Central Luzon in the 1950s. This was not, however, successful as the
Mozambique tilapia did not perform well. In the early 1970s, the Nile tilapia (Oreochromis niloticus)
was introduced into the Philippines and was considered as a much better fish for farming. When
yields started to decline, a ten year multinational effort for genetic improvement was launched
which led to the development of the successful GIFT strain (Genetically Improved Farmed Tilapia).
Several different strains of Nile tilapia have now been developed within the Philippines and

overseas. The Bureau of Fisheries and Aquatic Resources (BFAR) has developed the Genetically
Enhanced Tilapia Excellent strain (GETEXEL), and the Freshwater Aquaculture Center of Central
Luzon State University (FAC/CLSU) has bred the FaST strain. In Norway, a private company Genomar
markets the fish under the name GenoMar Supreme Tilapia (GST). The agreement of GIFT
Foundation with Genomar ceased in 2005 and efforts were made to obtain research fund to
continue the selection program. In April 2010, a new collaborative research partnership was formed
among three institutions: BFAR, FAC/CLSU and Feedmix Specialist. The GIFT strain was renamed to
GIFT Feedmix Fortified (GIFTFF). GIFT and GIFT derived strains account for around 70% of total tilapia
production in the Philippines (WorldFish website).
Tilapia meat is typically white with a mild flavor and firm texture. It can easily be substituted in
recipes for snapper, pompano, cod, and seabass. It can be broiled, fried, grilled, baked, poached,
sautéed, or steamed. The flesh has a medium fat content, but very high protein content. Tilapia
absorbs flavor from the water it is raised in so the supply source is very important.
The most common ways in which tilapia is traded are: live, fresh whole (gutted), frozen whole
(gutted), fresh and frozen fillets. In Central and Northern Luzon regions, tilapia is usually sold live
and fresh whole with the former as the most preferred form. Tilapia is usually consumed as fresh
and only small quantity of the total supply is processed into fillets, nuggets, tocino, rolls, and
“tilanggit”.
“Tilanggit” or “tilapiang dinanggit” uses the juvenile tilapia and is prepared similarly to “danggit”
(Rabbitfish), which is horizontally cut into half and preserved through drying techniques. One of its
distinct characteristics is it is more meaty as compared to danggit. Production and distribution of
processed tilapia products are very limited and usually undertaken by micro enterprises and

government supported community groups except for Keno Foods in Bulacan which processes about
200 kilograms of “tilapia crunch or tilanggit” daily
Surimi is another product that could be created by transforming and adding value to tilapia primary
products. Surimi is a fish-based product which imitates in shape, texture and taste popular and
massively consumed marine products, such as crab, lobster and scallop. Tilapia pulp is well
positioned to capture these market shortages for a white, mild-tasting fish. The pulp can also be
made into breaded sticks and nuggets. In the Philippines, the tilapia pulp is made into products like
tocino and rolls. Product development initiatives in the Philippines seem to be more slanted towards
making use of the tilapia pulp as substitute for meat.
Processed tilapia or convenience food products comprise a small segment both in the domestic and
export markets. Some of the processed tilapia products in international markets are the breaded
fillet, deboned fillet, tilapia dipped in coco mix and tequila batter with coconut breading, and tilapia
burger patties.
Table 1 . Major Tilapia Products in International Trade and Main Suppliers.

Main Suppliers Frozen Frozen Fresh Skins Leather
Whole Fish fillets fillets goods
China x x
Taiwan x x
Ecuador x x x
Costa Rica x x

Table 1 . Major Tilapia Products in International Trade and Main Suppliers.
Main Suppliers Frozen Frozen Fresh Skins Leather
Whole Fish fillets fillets goods
Indonesia x
Thailand x
Honduras x x
Zimbabwe x
Brazil x x
Source: Fitzximmons, Development of New Products and Markets for Tilapia
In importing countries such as the United States and the European Union, the most important
product form is fillets. Fillet is the highest growing segment and consumers are becoming very
familiar with this product type. The frozen fillets category is exported by Latin American countries
and is known as “standard high quality”. Tilapia for filleting is usually grown in favorable conditions
and/or purged in clean water before harvesting. Fillets are blast frozen or individually quick frozen
(IQF). Fresh fillets are another very high quality product. This category typically commands higher
prices than frozen fillets, although in recent years the price difference has narrowed. The variety of
fillet forms continues to grow with size variations, skinning variations, and various treatments. Deep
skinning has become the preferred treatment. Removing more of the dark flesh along the lateral line
and reducing the “chevron” of red in the otherwise white fillet is a more desirable product for many
customers in international markets. Most fillets now also go through hand trimming. Hand-trimmed
fillets have the dorsal and ventral margins trimmed off leaving nicely rounded edges and smooth
appearance.
Central Luzon has one company that specializes in the production of fillets. Fillet yield of tilapia is
very small, at 30-33%. For some fillets sold as deep-skinned, the yield can even decline further to
28%. The deep skinning takes off the fat layer. A main constraint faced in fillet production is the lack
of supply. Tilapia fillet production requires 700 to 1000 grams fish for maximum fillet recovery rate.
Culture period to reach the required size will be about 8 to 10 months under the current technology
and system. Farmers prefer to sell their tilapia produce at a shorter period of time rather than
extend it to 8 months because it will mean more feed consumption and thereby higher risk of loss of
their stocks due to typhoons and flooding.
In Latin America, tilapia

skin is used for a variety of
leather goods like purses,
clothing and accessories
(Fitzsimmons, 2006;
Fitzsimmons, 2004).
Another possible market
for tilapia skin is as a
pharmaceutical product.
Several European firms are
purchasing frozen or salted
skins which are processed
for gelatine and used to
make time-released
medicines, substituting material from tilapia skins for mammalian products (Fitzsimmons, 2004).

B. PRODUCTION TRENDS
1. Global Production
Tilapia production surged around the world during the 1990’s and early 2000’s. Tilapias are now the
second most popular farmed fishes after the carps, with global production estimated to have
reached MT in 2013. The increase in production was primarily in response to the growing popularity
of tilapia as a competitive whitefish species around the world and the development of large
consumer markets in North Americas and Europe, which are purchasing fish grown in tropical
countries with year-round production and relatively low costs.
Table 2 . World Production of Tilapia, 2009 to 2013

Based on estimates and available data
Sorted according to 2013 data
Country Production Volume (MT)
2009 2010 2011 2012 2013
World 4,671,432 4,208,436 3,939,976 3,532,069 3,100,815
China 1,150,000 1,332,187 1,300,000 1,380,000 1,600,000
Egypt 386,186 557,049 557,049 600,000 768,000
Indonesia 310,000 458,752 500,000 520,000 717,813
Brazil 132,958 155,451 253,926 280,000 300,000
Philippines 260,911 258,839 257,385 260,536 268,819
Thailand 300,000 200,000 250,000 270,000 220,000
Bangladesh 67,000 90,000 104,716 136,000 140,000
Mexico 100,000 100,000 100,000 100,000 100,000
Others 41,000 39,000 261,000 243,000 96,000
Vietnam 75,000 76,000 80,000 85,000 95,000
Taiwan 67,317 74,888 75,000 75,000 73,000
Colombia 43,000 49,893 50,000 52,000 52,000
Malaysia 38,000 38,886 40,000 43,000 52,000
Ecuador 39,000 47,733 50,000 53,000 48,000
Myanmar 40 185 42,000 45,000
Costa Rica 22,000 23,034 25,000 28,000 28,000
Ghana 20,000 510 500 500 26,000
Honduras 35,000 16,455 22,000 25,000 25,000
United States 10,000 9,992 10,000 12,000 13,000
Saudi Arabia 3,443 3,400 3,400 3,400 3,800
Source:
Professor Fitzsimmons, University of Arizona and Past President of the World Aquaculture Society
Nile tilapia comprised about 75% of the world tilapia production in 2013. All new countries entering
tilapia production concentrate on this species, which is easy to grow. Asia represents about three
quarters of world tilapia production with China as the leading producer. The increased tilapia

production in China can be attributed to the wider acceptance of the species at the international
market (Zhao, 2011) and the growth in demand in the domestic market. Quality seeds, water
availability, labor and farming experience, according to Zhao (2011) are key factors that have
contributed to the rapid growth in tilapia production in China. The quality of seed stocked during the
production cycle normally determines the survival rate of the fish (Xiao et al., 2012), which in turn
will determine the yield, and informs the total revenue at the end of the production. The slight fall in
production in 2011 was due to increase in cost of inputs and aggravated by prolonged periods of low
temperature which is not conducive for tilapia farming. After adjustments in prices of major inputs,
production started to recover.
Egypt is the 2nd largest producer of tilapia. Two improved breeds of Nile Tilapia that grow up to 30%
faster are helping farmers in Egypt to increase the productivity of their fish farms. Tilapia production
in Egypt is primarily for domestic consumption. The tilapia industry in Egypt provides 65% of the
country’s fish needs, with virtually all the output coming from small and medium-scale privately
owned farms.
The third largest tilapia producing country is Indonesia. Production in Indonesia is geared both for
the international and domestic markets. Tilapia from Indonesia is the first farmed fish to meet the
Aquaculture Stewardship Council (ASC) certification standard. This tilapia is recognized through the
use of the on-pack ASC logo. The logo reinforces to consumers that the fish they purchased is
responsibly farmed so that adverse environmental and social impacts are minimized. The first
certified tilapia farm in Indonesia is one of the biggest in the world and is operated by Regal Springs.
The farm uses large floating cages that have demonstrated their minimal impact on the natural
environment. In cooperation with NGOs and scientists, Regal Springs monitors the water quality
continuously. Furthermore, good social working conditions and care for the local community are
important corporate values enshrined in its approach to corporate responsibility.

Starting 2012, Brazil has overtaken Philippines in tilapia production and became the 4 th largest
producer in the world. Tilapia was first introduced to Brazil in 1971 from the Ivory Coast, West
Africa, but it was not until the early 1990’s when genetically improved STOCKS, (GIFT, Chitralada and
Fishgen’s YY male technology) were introduced to Brazil that production really escalated. Also high
density cage culture was started in the larger water bodies combined with monosex culture,
improved locally produced feed and a far greater awareness of tilapia as an excellent food source.
Tilapia farming is undertaken by both small farmers and large companies such as Netuno
International, which is 50% owned by Japan’s Nissui group. Tilapia farming was also further boosted
with the rapid expansion of processing plants catering to both domestic and export markets.
(Panorama Acuicola)
Much of Brazil’s expanding tilapia aquaculture takes place in floating cages with sturdy frames and
nets made from plastic-coated steel or polypropylene. Although larger cages are also used, most
cages have small volumes up to 20 m3 that support high stocking densities and intermittent

harvesting without overstressing the fish. Earthen ponds are also used for the nursery of fry, but
compartments in cages are more common. Size grading is major management component in
recognition of the fact that tilapia growth can vary widely within the same stock, especially when the
fish are subjected to high density. This is in part due to genetic differences, but also because of
competitive interactions among fish. Some fish outcompete others for feed and consequently grow
faster. Likewise, when tilapia is transferred to different cages, it also allows moving the stock to
clean units with larger mesh sizes, which promotes greater water exchange within the rearing unit.
From 5-mm mesh sizes, 10-g fish are usually moved to cages with mesh sizes of up to 15 mm. Then
30 to 200-g tilapia are held within nets of 15- to 25-mm mesh. The mesh on nets for fish larger than
200 g is 25 mm or wider. (Nunes/The Fish Site).
From 2009 to 2011, Philippines was the 4th largest producer of Tilapia in the world. In 2012 and
2013, the country slipped into the 5th place with the surge in production in Brazil. According to
Director Asis Perez of the Bureau of Fisheries and Aquatic Resources (BFAR), studies made by experts
indicate that the Philippines, Indonesia, and Papua New Guinea provide the best environmental
conditions for tilapia culture worldwide.
2. Domestic Production
Table 3 . Tilapia Production in the Philippines, 2009 to 2013

Sorted according to 2013 production volume
Region Production Volume (MT)
2009 2010 2011 2012 2013
Philippines 260,911.05 258,839.43 257,385.44 260,535.67 268,818.74
Central Luzon 125,238.09 121,176.00 117,853.16 117,273.31 121,638.08
Calabarzon 84,231.25 86,260.62 84,942.04 87,459.94 91,024.21
Cagayan Valley 11,279.69 8,798.75 10,678.89 11,519.95 11,159.95
Ilocos Region 6,577.27 9,815.90 10,447.48 10,507.87 11,033.42
Bicol Region 9,465.54 9,401.22 9,338.09 9,763.61 9,817.12
SOCCSKSARGEN 8,899.99 8,506.66 8,609.03 7,508.54 6,495.72
ARMM 3,979.62 4,229.21 4,157.22 4,248.50 5,425.67
CAR 3,286.85 2,616.54 2,672.76 2,737.92 2,790.22
Davao Region 922.08 1,378.44 1,779.92 2,732.71 2,669.06
Western Visayas 1,238.64 1,103.38 1,338.92 1,608.88 1,916.30
Northern Mindanao 1,540.61 1,472.29 1,399.81 1,505.13 1,326.20
Zamboanga Peninsula 2,280.71 1,890.02 1,800.26 1,255.08 1,229.59
NCR 336.09 490.04 703.94 800.29 779.71
Mimaropa 571.23 559.00 627.01 675.33 685.48
Eastern Visayas 398.48 495.89 409.36 338.75 389.22
Central Visayas 328.82 353.35 366.92 330.51 246.33
Caraga 336.07 292.15 260.63 269.35 192.48
Source: PSA/BAS

Between 2009 and 2013, tilapia production in the Philippines increased by 3% or from 260,911.05
MT in 2009 to 268,818.74 MT in 2013. The relatively higher percentage increase in production
between 2012 and 2013 may be attributed to increased motivation among farmers to increase
stocking density and yield due to increased demand from the domestic market. During the recent
years, farmers had difficulties in increasing production due to lack of supply of fries during stocking
time. In some cases also, farmers have to align their production cycle to water availability especially
if they are dependent on the irrigation system as source of water for their ponds.
The top 2 producing regions were Central Luzon, which accounted for 45% of production, and
Calabarzon, which had a 34% percentage share to national production. These two regions
accounted for 79% of the Philippine production in 2013. Cagayan Valley and Ilocos Region ranked
third and fourth,, respectively but levels of production were less than 5% of Central Luzon.
Production of tilapia in the Philippine is done in a range of culture environments and systems,
including freshwater and brackishwater ponds, cages and pens, small farm reservoirs, rice-fish
integrated systems and, although negligible, even marine fish cages.
Table 4 . Breakdown of Tilapia Production in the Philippines by Culture Environment and

System, 2013
Culture Environment and System Production Volume (MT) %
Brackishwater 15,371.11 5.72%
Pond 15,213.36 5.66%
Pen 40.93 0.02%
Cage 116.82 0.04%
Freshwater 253,293.76 94.22%
Pond 142,852.24 53.14%
Pen 21,904.78 8.15%
Cage 88,536.74 32.94%
Marine water 0.10 0.00%
Cage 0.10 0.00%
Rice - Fish System 2.29 0.00%
Small Farm Reservoir 151.48 0.06%
Total Philippine Production 268,818.74 100%
Source: PSA/BAS
Freshwater tilapia accounted for 94.22% of Philippine production in 2013. Tilapia reared in
brackishwater comprised 5.72% of the 2013 production. In both brackish and fresh water, the
earthen pond is the most culture system in use. This system is the most versatile for intensive and
semi-intensive tilapia production. Cage culture of tilapia, which is the second most widely used
system, is practiced in areas where lakes, large reservoirs, rivers, and estuaries are available.
Compared to ponds, the use of cages requires relatively low capital investment and offers flexibility
of management. Another advantage is that breeding cycle of tilapia is disrupted in cages, and
therefore mixed sex population can be reared without the problems of recruitment and stunting,
which are major constraints in pond culture.

Cordillera Administrative Region (CAR)
Table 5. Tilapia Production in CAR, 2009 to 2013

Province Production Volume (MT)
2009 2010 2011 2012 2013
CAR 3,286.85 2,616.54 2,672.76 2,737.92 2,790.22
Abra 465.87 451.56 458.32 481.51 468.43
Apayao 188.59 170.81 166.69 180.37 206.75
Benguet 312.24 306.18 322.06 324.9 337.28
Ifugao 2,056.26 1,435.08 1,461.50 1,494.70 1,527.60
Kalinga 247.85 238.73 247.37 239.7 233.3
Mountain Province 16.04 14.19 16.82 16.75 16.87
Source: PSA/BAS
Aquaculture is the main source of fish in the region with tilapia as the top produce followed by carp.
Tilapia production in the region decreased from 3,286.85 MT in 2009 to 2,790.22 MT in 2013. The
decline started in 2010 and was not able to climb back to the same level in 2009 although
production volume slightly increased in the succeeding years. The decline in production was
primarily because a number of fish farms in Ifugao were not able to stock or had to stock less than
the usual density due to declining water supply from the NIA irrigation canals in the top 3 producing
municipalities of Lamut, Alfonso Lista, and Aguinaldo. Water rationing was done in all lateral canals
under NIA supervision to minimize unnecessary wastage and leaks. Meanwhile, fish cage production
in the province also decreased. Many fishcage operators were not able to resume normal operation
due to the sudden drop of water level by about 50 meters or more at the Magat Dam (BAS Report,
2010). During the past five years, Ifugao was the top tilapia producing province in the region.
In 2013, Abra had the second highest production volume in the region. Main production areas are
the barangays along the Sinalang River and the Abra River such as barangays Namanrabar and
Malamsit in Penarrubia, Malita in Bangued, Balais in Lagangilang, and the different barangays of
Bucay and Tayum.
During the past five years, Benguet produced an average of 320 MT of tilapia per year. Most of the
tilapia is grown in Ambuklao Dam and Binga Dam where number of fish cage and fish pen operators
is strictly controlled. In Ambuklao Dam, only 83 operators have been allowed to set-up cages and
pens. The National Power Corporation (NPC), the local government unit (LGU), BFAR, and fisherfolks
group Bantey-Pesik-Kiweng Organization Incorporated (BANPIKOI) have jointly agreed to set this
limitation to keep Ambuklao Dam’s water level fish-sufficient. According to BFAR, there had never
been a case of fish kill in the dam because of the good flow of oxygen and the good aeration in the
dam’s water. Clean up activities are also done regularly by the BANPIKO and other stakeholders to
maintain the cleanliness of the dam and prevent the fishes from being exposed to toxins. Tilapia
from Ambuklao Dam is said to be the tastiest and cleanest of its kind due to the relatively deep
reservoir. The dam has river tributaries, which consistently make the water clean with its flowing
supply. According to the operators, Ambuklao Dam gives an average daily tilapia harvest of one
metric ton.

Tilapia in the region is grown in fresh water. About 66% of the 2013 tilapia production in the region
came from fishponds while 34% were reared in fish cages. In Ifugao, fish cages are located in Magat
Dam Reservoir. The Magat Dam also waters the ponds in Alfonso Lista and Aguinaldo, while NIA’s
Hapid Irrigation Project distributes fresh water to fish ponds in Lamut.
Table 6. Breakdown of CAR Tilapia Production by Culture System, 2013

Provice Pond Cage Total
Volume (MT) % Volume (MT) %
CAR 1,853.31 66% 936.91 34% 2,790.22
Abra 468.43 100% 468.43
Apayao 206.17 100% 0.58 0% 206.75
Benguet 78.41 23% 258.87 77% 337.28
Ifugao 853.15 56% 674.45 44% 1,527.6
Kalinga 233.2 100% 0.1 0% 233.3
Mountain Province 13.95 83% 2.92 17% 16.87
Source: PSA/BAS
A variation of the earthen pond in Abra is the raceway system which is commonly practiced in Tubo
– Abra by the Maeng Tribe. The raceway system is implemented along the riverbanks. It divides a
portion of the river where tilapia are raised but not fed with commercial feeds, relying only on the

available natural food. The fisherfolks pile stones to divide the river into terraces which act as
barriers to prevent the escape of the fishes.
BFAR-CAR has also developed

and introduced the fish
terraces aquaculture system
for areas with mountainous
terrain. Like the rice terraces in
Banaue - Ifugao, the fishpond
system is designed following
the contours or slopes of the
mountain and supplied with
free flowing water starting
from the top-most pond.
Although not reflected in

PSA/BAS data, the rice-farm
system is also being practiced
in the region. In Kiangan –
Ifugao, for example, most of
the existing fishponds are small
paddies of ricelands with a small portion set aside for tilapia farming. Some of these are
permanently maintained for the sole purpose of raising fish but half of the number of fishponds is
just temporarily diked convertible to other uses over time. Farmers dig a trench in their farms so as
to be also able to raise tilapia or other fresh water fishers The average measurements range from 30

to 150 square meters with a few having wider spaces up to 300 and more square meters. The rice
and the tilapia are usually harvested at the same time. In many cases, tilapia raised under this
system are intended for own consumption.
Ilocos Region
Table 7 . Tilapia Production in Ilocos Region, 2009 to 2013

2009 2010 2011 2012 2013
Ilocos Region 6,577.27 9,815.90 10,447.48 10,507.87 11,033.42
Ilocos Norte 458.86 493.76 499.49 413.62 354.68
Ilocos Sur 1,165.73 1,142.94 1,189.11 1,245.29 1,230.05
La Union 434.29 382.56 318.7 384.62 397.99
Pangasinan 4,518.38 7,796.64 8,440.21 8,464.34 9,050.70
Between 2009 and 2013, tilapia production in Ilocos Region increased by 68%, from 6,577.27 MT in
2009 to 11,033.42 MT in 2013. Pangasinan is the top producer and, in 2013, the province accounted
for 82% of the region’s production. Bayambang's Mangabul Lake located at the border of Pangasinan
and Tarlac is one of the main sources of freshwater fish such as tilapia.
Production from Ilocos Sur comprised 11% of the region’s production in 2013. The slight decrease in
production volume in Ilocos Norte and Ilocos Sur was due to the devastation of some farms caused
by Typhoon Helen in 2012.
Table 8 . Breakdown of Tilapia Production in Ilocos Region by Culture System, 2013

Culture System Production Volume (MT) Region
Ilocos Ilocos Sur La Union Pangasinan Volume %
Norte
Brackishwater 138.73 520.61 336.86 1,584.58 2,582.44 23.40%
Pond 111.22 516.74 289.18 1584.58 2,503.18 22.68%
Pen .. .. 40.66 .. 40.76 0.37%
Cages 27.51 3.87 7.02 .. 38.50 0.35%
Freshwater 210.95 709.44 61.13 7,464.82 8,447.67 76.54%
Pond 207.13 698.24 61.13 7464.82 8,432.63 76.41%
Pen 0.07 .. .. .. 0.07 0.00%
Cages 3.75 11.2 .. .. 14.97 0.14%
Rice-Fish 0.04 1.3 1.34 0.01%
Small Farm 4.96 4.97 0.05%
Reservoir
Total 1,230.05 397.99 9,050.70 11,036.42 100%
Source: PSA/BAS

In 2013, freshwater tilapia production accounted for 76.54% of the region’s harvest while tilapia
from brackish water comprised 23.40% of the production. The only province where production in
brackish water was dominant was in La Union. About 99.09% of the region’s production was grown
in earthen ponds.
Cagayan Valley
Table 9 . Tilapia Production in Cagayan Valley, 2009 to 2013

2009 2010 2011 2012 2013
Cagayan Valley 11,279.69 8,798.75 10,678.89 11,519.95 11,159.95
Cagayan 4,140.07 3,170.23 3,416.36 3,357.99 2,900.38
Isabela 5,538.94 4,453.08 5,762.92 6,292.74 6,368.14
Nueva Vizcaya 1,057.33 821.94 973.16 1,146.28 1,128.53
Quirino 543.35 353.50 526.46 722.95 762.91
Source: PSA/BAS
Tilapia production in Cagayan Valley went down slightly from 11,279.69 MT in 2009 to 11,159.95 MT
in 2013. The most significant drop in production during the past 5 years was in 2010. This was due
to high mortality brought about by increase in water temperature and the decline in water level at
the Magat Dam. Although no fish kill occurred after 2010, farmers continue to experience fish
mortality due to extreme heat during summer and abrupt changes in weather.

Isabela has consistently been the top producer of tilapia in the province. In 2013, the province
accounted for 57% of the region’s production. Despite the erratic weather conditions, production in
the province increased from 5,538.94 MT in 2009 to 6,368.14 MT in 2013.
The province of Cagayan has the 2 nd largest production of tilapia in the province. Between 2009 and
2013, production in Cagayan decreased by 30% or from 4,140.07 MT in 2009 to 2,900.38 MT in 2013.
There were quite a number of farmers who decreased their stocking density as a mitigation measure
against rising water temperature. In some cases, growers also experience difficulties in sourcing
fries during stocking period.
Table 10 . Breakdown of Tilapia Production in Cagayan Valley by Culture System, 2013

Culture System Production Volume (MT) Region
Cagayan Isabela Nueva Quirino Volume %
Vizcaya (MT)
Brackishwater 2,323.35 - - - 2,323.35 20.82%
Pond 2,245.33 2,245.33 20.12%
Pen - - 0.00%
Cages 78.02 78.02 0.70%
Freshwater 570.53 6,335.88 1,128.53 708.02 8,742.96 78.34%
Pond 567.14 6,009.94 1,122.13 705.17 8,404.38 75.31%
Pen - .. .. .. - 0.00%
Cages 3.39 325.94 6.40 2.85 338.58 3.03%
Mariculture Cage 0.10 0.10 0.00%
Small Farm Reservoir 6.40 32.26 54.89 93.55 0.84%
Total 2,900.38 6,368.14 1,128.53 762.91 11,159.96 100%
Source: PSA/BAS
Tilapia production in Cagayan Valley is predominantly based on freshwater pond culture. Among the
four provinces, only Cagayan produces tilapia in brackishwater pond. The earthen pond is the most
widely adopted culture system. Cage culture of tilapia is primarily undertaken in the Magat
Aquapark in Isabela. During the recent years, BFAR has been promoting the cage culture system in
areas with small water impounding projects (SWIPs). SWIP areas are free from floods and are
protected from strong winds and excessive water movement making these ideal sites for fish cages.
In the demo projects of BFAR, each fish cage measured 5 x 10 x 2.5 and was stocked with 2,500
fingerlings. Average production per cage is estimated at 425 kilos after four months culture period.
The marine fish cage culture system is only viable in Apagonan River in Aparri – Cagayan.
BFAR also introduced the upland aquaculture in mountainous rolling areas where water is abundant
for the culture of cold tolerant freshwater fish species. Because of limited space the culture systems
basically consist of dug-out pond, fish terraces, and small cages.

Central Luzon
Table 11 . Tilapia Production in Central Luzon, 2009 to 2013

2009 2010 2011 2012 2013
Central Luzon 125,238.09 121,176.00 117,853.16 117,273.31 121,638.08
Aurora 353.64 314.35 272.48 241.87 264.42
Bataan 1,407.53 1,421.80 1,440.87 1,397.38 1,481.61
Bulacan 5,394.90 4,929.42 4,301.87 4,142.75 4,436.20
Nueva Ecija 4,506.22 4,054.37 3,759.63 3,716.20 2,884.63
Pampanga 106,818.59 104,978.15 102,348.08 101,172.60 105,994.52
Tarlac 6,645.60 5,348.13 5,581.36 6,406.38 6,379.23
Zambales 111.61 129.79 148.87 196.13 197.47
Source: PSA/BAS
Between the period 2009 to 2012, production in Central Luzon was on a declining trend. From
125,238.09 MT in 2009, production went down to 117,273.31 MT in 2012. In 2013, production
climbed up to 121,538.08 MT, representing a 4% increase over 2012 figures. Main causes of decline
in production were the following: a) El Nino phenomenon in 2010 which resulted to increase in
water temperature and, consequently, poor growing season; b) Typhoons Pedring and Quiel in 2011
which damaged about 15,480 hectares of fishponds incurring a combined loss of 41,000 metric tons
of milkfish, tilapia and tiger prawns, valued at P1 billion; c) presence of invasive Chinese turtle
species (Pelodiscus sinensis) which preyed on milkfish and tilapia fingerlings; and d) lack of supply of
fries due to extreme heat and erratic weather conditions.
Although all provinces in Central Luzon are producers of tilapia, the key producing area is Pampanga.
In 2013, Pampanga produced 105,994.52 MT of tilapia which is about 87% of the total production in
the region. The top 5 tilapia producing municipalities in Pampanga are: Macabebe, Sasmuan,
Minalin, Lubao, and Masantol. Bulacan had the 2nd highest production and contributed 4% to
region’s production in 2013.
Table 12. Breakdown of Tilapia Production in Central Luzon by Culture System, 2013
Brackishwater Freshwater Freshwater Small Farm Total
Pond Pond Cage Reservoir
Central Luzon 6,432.09 115,165.04 31.87 9.08 121,638.08
5.29% 94.68% 0.03% 0.01% 100.00%
Aurora 51.56 212.86 - - 264.42
Bataan 227.95 1,253.66 - - 1,481.61
Bulacan 1,543.02 2,887.42 - 5.76 4,436.20
Nueva Ecija - 2,881.32 - 3.31 2,884.63
Pampanga 4,609.11 101,385.41 - - 105,994.52
Tarlac - 6,347.36 31.87 - 6,379.23

Table 12. Breakdown of Tilapia Production in Central Luzon by Culture System, 2013
Brackishwater Freshwater Freshwater Small Farm Total
Pond Pond Cage Reservoir
Zambales 0.45 197.02 - - 197.47
Source: PSA/BAS
Freshwater ponds in Central Luzon account for 94.68% of the total tilapia production in 2013. Tilapia
production from brackishwater ponds contributed 5.29% to region’s production in 2013. Tilapia
cage culture is currently being tested in Pantabangan Dam. It is hoped that through cage culture
farmers will be able to produce the required size of tilapia required for fillet at a production cost that
would be profitable for all players involved in the chain.

Section 3:
NATURE AND STRUCTURE OF THE INDUSTRY
A. VALUE CHAIN MAPPING

In the tilapia sector in Luzon A Cluster, there are two key value chains, namely: a) Whole fish for
retail market; and b) Intermediate/Process tilapia. Of these two chains, the whole fish value chain is
the most dominant and absorbs most of the production.
1. Whole Fish for Retail Market (Live/Fresh/Frozen)
Farmers usually source their fries from nearby hatcheries and stock them directly in their grow-out
ponds. After 4 months culture period, tilapia is harvested. The tilapia is then sold to traders usually
via agents or directly to retailers. Traders bring the tilapia either to the consignation or directly to
wholesalers and retailers/vendors. In some areas, farmers sell directly to households.
Operators of small tilapia ponds usually keep some of the fish for home consumption. Owners of
medium and large ponds sell 100% of their harvests. The percentage of farmers who keep tilapia for
home consumption shrinks as pond area increases indicating that larger pond-area is associated with
increased entry into the cash market economy.
Flow of tilapia in each of the region is described in the succeeding pages.

Cordillera Administrative Region (CAR)
Farmers in CAR sell their tilapia directly to households, vendors in the wet market, restaurants, and
roadside stalls. Farmers in Ambuklao Dam, for example, deliver about 1,000 kilograms of assorted
freshwater fishes (with tilapia as the majority) to about 30 vendors based in the Baguio City market.
In Ifugao, BFAR funded the construction of a fish landing site in the Ifugao side of Magat Dam to
provide tilapia farmers a place where to sell their harvest and, at the same time, provide households
direct access to tilapia.
Ilocos Region
In upland areas, farmers generally

sell their tilapia directly to
households. Among lowland
farmers, the tilapia are brought to
the public market and sold to
individual vendors. Tilapia is
usually sold fresh or frozen.

Cagayan Valley
Backyard farms in the region usually sell their tilapia directly to households in their neighborhood,
nearby public markets, and roadside stalls. The larger farms generally sell via traders. The traders, in
turn, sell the tilapia to wholesalers or directly to vendors. All of the region’s tilapia production is
sold within the region.
Central Luzon

Tilapia production in Central Luzon is largely market-driven. Based on a case study conducted by the
Asian Development Bank, about 77% of tilapia farmers sold to traders or their agents. The rest sold
directly to retailers, restaurants, and households. The traders transport live tilapia in aerated tanks
to the following major transshipment points: a) Navotas - Malabon Fish Market and other major
markets in Metro Manila; b) Fish markets in Angeles and Pampanga; and c) Dagupan Market in
Pangasinan. From these markets, the tilapia is distributed to various markets in Metro Manila, CAR,
Ilocos Region, and Cagayan Valley.
2. Processed Tilapia
The common methods of processing tilapia are drying, salting, smoking and “buro” making. Sun
drying and smoking are the most common processing methods practiced. These are also the
simplest and least expensive ways to preserve tilapia. “Burong isda” or fermented fish is a favorite
among the Tagalogs and Ilocanos. During the recent years, products made of minced tilapia meat
and pulp and the “tilanggit” have also been developed and introduced to associations and
cooperatives. Intermediate processing would include production of fillet and IQF clean and gutted
tilapia.
Processors generally source their tilapia from their own farms. The medium and large companies
augment their supply via contract growing scheme. They also source from traders. In the domestic
market, these companies sell directly to institutional buyers (supermarkets/food establishments/
specialty shops). The companies themselves export their products.

Micro enterprises without own farm get their raw material either from the public market or directly
from growers. Collective groups source tilapia from members. Micro enterprises and collective
groups either sell the products themselves within their neighborhood or consign these to retailers.
B. KEY FUNCTIONS AND PLAYERS
1. Input Provision
The success of artificial propagation techniques on a commercial scale has contributed significantly
to the development of the tilapia industry. Since the late 1980s, national and regional research
institutions have been involved in selective breeding programs to improve culture strains and, since
2000, these improved strains have been commercialized. Tilapia farmers now have access to a wide
range of tilapia strains, produced by government and private hatcheries. A Tilapia Science Center
was established in the Science City of Munoz - Nueva Ecija, where most of the tilapia selective
breeding research projects and institutions are found. Aside from hatcheries, the following are the
government and private entities involved in tilapia seed production in Luzon A Cluster and the whole
country, in general:
a) Freshwater Aquaculture Center (FAC) of the Central Luzon State University (CLSU)
This Center was among the earliest facilities engaged in the production and distribution of tilapia
fingerlings in the country. Although research is its main activity, the Center is also involved in the
development of improved strain of tilapia for hatchery and grow-out operators.

b) BFAR – National Freshwater Fishery Technology Center (BFAR-NFFTC)
The Center, which is located at the CLSU, serves as the National Broodstock Center (NBC) of
Genetically Enhanced Tilapia (GET) fingerlings and breeders.
c) Genetically Improved Farmed Tilapia Foundation, Inc. (GIFT FI)
The Foundation distributes fingerlings throughout the Philippines using a network of 7 private
satellite hatcheries and through the GIFT CI center located at the CLSU campus.
d) BFAR-Regional Outreach Stations (BFAR-ROS)
The BFAR operated regional hatcheries serve as focal distribution centers of the improved tilapia
strains. Their production is usually used for fingerlings dispersal which enables resource poor
households to start a small tilapia production.
Figure 19 shows the flow of fries and fingerlings from the National Broodstock Center (NBC) to grow-
out farmers. The NBC produces the broodstock that will then produce the fingerlings for grow-out.
Tilapia seed (fry and fingerlings) is raised from captive broodstock in hatcheries. . In Luzon A Cluster,
hatcheries nurse fry to fingerlings and there is no significant nursery subsector. In other tilapia
producing areas such as CALABARZON, fries (size 20 -22) are sold by hatcheries to nursery operators
who will then rear the fries until reaching their marketable sizes of 14 and 12. For sex-reversed
tilapia (SRT) fingerlings, it usually takes 3 to 4 weeks to reach size 14 while for non-sex reversed it
takes 1 to 1 ½ months. Under this system, it is possible for grow-out farmers to reach 500 grams and
above within 4 months. Likewise, survival rate tends to be higher. Currently, grow-out farmers in
Luzon A have a survival rate ranging from 50% to 60%.
Tilapia seed production is year-round but has seasonal variations. The peak season for tilapia seed
are during the summer months (March, April, and May). During the recent years though, many of
the hatchery operators had low production and/or were not able to produce sufficient number of
fries during the traditional stocking period of grow-out farmers (normally at the start of planting

season of rice to ensure water availability). Due to extreme heat, hatchery operators encountered
the following problems: i) some broodstocks did not ovulate; ii) less number of eggs; iii) lower rate
of egg fertilization; iv) poor hatching rate; and v) low survival rate. Hatchery operators are highly
vulnerable to climate change as production is highly influenced by the weather especially
temperature.
Price of fries and fingerlings varies according to size, strain and whether they are mixed sex (males
and females) or sex-reversed tilapia (SRT) comprising 95–100 percent males. BFAR issued Fisheries
Administration Order (FAO) 205 Series of 2000 to standardize the price of fingerlings for tilapia and
carp according to size and weight. It may be necessary for BFAR and the industry players to review
the prices of the fries and fingerlings so as to be able to reflect the prevailing production cost.
Table 13. Standard Price of Fries and Fingerlings

Size Weight Price per Piece (PhP)
Size 24 0,02 to 0,20 grams 0.15
Size 22 0.21 to 0,42 grams 0.25
Size 17 0.56 to 1.5 grams 0.35
Size 14 1.6 to 3.2 grams 0.45
Source: FAO 205 Series of 2000
Price of GIFT FI SRT seed is usually double the price of non-sex reversed fries due to added costs
arising from the sex reversal treatment. SRT size 22, for example, is sold at Php 0.40 – Php 0.50 per
piece. Large grow-out farm owners generally stock SRT to ensure uniformity of size upon harvest and
to have higher yield.
Fries are packed in plastic bags with no corners. Hatchery operators usually deliver the fries to
clients especially those with farms of 1 hectare and above. A mortality allowance of 5% is usually
provided. Most hatchery operators provide technical advice to clients to reduce the risk of claims
for mortality replacements.
Although all regions in Luzon A have privately owned and/or LGU operated hatcheries in addition to
the BFAR-Regional Outreach Stations, the supply of fries is still a problem. In Ilocos Region, the total
existing annual production volume of the 19 hatcheries (18 private; 1 government) is only 12.747
million fries per year while annual requirement is 85,191 million. Supply gap is about 72.444 million.
Central Luzon has about 142 tilapia hatcheries and, of which, 53 are in Pampanga and 45 in Nueva
Ecija. Monthly production per hatchery ranges from 100,000 fingerlings for small hatcheries to more
than 5 million fingerlings for the larger ones. The current production capacity is more than enough
to meet requirements of the industry. However, during the recent years, the hatcheries are not able
to meet optimum production or even just their standard production volume due to climate change
as described in earlier paragraph of this section. Hatchery operators, with majority small-scale
enterprises, lack the resources and know-how on how to mitigate effects of climate change.
Cagayan Valley hatcheries are also faced with the same problem as their counterparts in Central
Luzon.
Another important input in tilapia cultivation is the feeds. There are at least 15 brands of
aquaculture feeds in the market. Some of the tilapia feed manufacturers are Santeh Feeds, B-Meg
or San Miguel Foods, Inc., FeedMix, Purina/Cargill, Sahara, Hoc Po, FeedWorld, Charoen Pokphand
Foods, and President Feeds. Based on interviews, the most commonly used feeds are Tateh from
Santeh Feeds and B-Meg. These two companies usually have distributors in key tilapia producing

areas. The large feed companies have technical persons and based on interviews appear to be the
main source of technical advice. Generally, the technical persons monitor the farms of their big
clients two months before harvest and help caretakers in feed and pond management. Feeds are
either delivered directly by feed companies, or are readily available from distributors that are
located close to the farms.
Commercial tilapia feeds are mainly dry sinking pellets and extruded floating pellets. The feeds are
generally available in three or four types with different nutrient specifications depending on life stage
or fish size,( i.e., pre-starter, starter, grower and finisher feeds). Quality of feeds is related to the
price. Price for premium sinker and floating feeds ranges from PhP 24.00 to 30.00/kilo. Floating
feeds are generally priced at least PhP 2/kilo higher than sinking feeds. From environmental and
feed management perspectives, floating feeds have more advantages than sinking feeds.
Table 14 . Advantages and Disadvantages of Floating and Sinking Feeds

Floating Feeds Sinking Feeds
Advantages
Directly observe feeding behavior, Low cost
easy feed management
Suitable for multiple feed ingredients
Uneaten feed can be removed from the
ponds Simple production technology
Increased digestibility of nutrients High density – storage

Good water stability Fish do not need to surface to feed /

Table 14 . Advantages and Disadvantages of Floating and Sinking Feeds
Floating Feeds Sinking Feeds
move through stratified water
Disadvantages
More expensive to produce Cannot directly observe feeding
behavior
Higher technology requirements to
produce Uneaten feed cannot be removed from
production system – possible water
Fewer ingredients may be suitable for quality issues
inclusion
Lower digestibility of ingredients
Fish spend more time at surface – bird
predation
Source/s: Feed Companies/BFAR/FAO
The selection of feed by farmers is usually based on affordability and quality. Farmers generally
assess quality based on past feed performance. From a more technical perspective, one of the more
important criteria for feed selection is their efficiency in terms of their feed conversion ratios (FCR).
Many farms, however, do not really keep records and documentation. Consequently, FCR is not
rigidly monitored.
Many farms, particularly grow-out operations, have limited financial resources and have to procure
feeds on credit. Farmers pay for feed inputs once the tilapia have been harvested and sold. Under
this scenario, the choice of feeds is dictated more on ease of access to feeds than its cost and
quality. Feed companies also provide discounts depending on volume.

The rising cost of commercial tilapia feed is encouraging some farmers to use alternative feeds. Farm
made tilapia feeds incorporate aquatic and land-based plant materials (duckweeds, Azolla, water
hyacinth), animal materials (snails, clams, silkworm larvae, maggots), plant processing by-products
(grains and brans) and animal processing by-products (blood and feather meal). Homemade feeds
are usually produced with simple and generally inadequate facilities. The disadvantage of alternative
farm made tilapia feeding regimes is slow fish growth. The key element in successfully producing
farm made feeds is the technical capacity of the producer. Other farms such as those in Tuba – Abra
rely mainly on natural food.
Fertilizers are used in extensive and semi-intensive pond culture systems. Inorganic fertilizer being
used by farmers are mono-ammonium phosphate (16-20-0 or 16 percent N, 20 per cent phosphate),
urea (46-0-0), ammonium sulphate (21-0-0), and 14-14-14 are used. The most commonly applied
organic fertilizer was chicken manure. Farmers generally have no problem in sourcing fertilizer since
there are distributors within the locality but main constraint is the increasing cost of inorganic
fertilizer.
Sources of water for freshwater ponds are deep wells, irrigation, rain, rivers/streams, and small
water impoundments. An increasing number of tilapia farms especially the relatively bigger farms in
Cagayan Valley and Central Luzon has invested in the installation of deep wells to obtain a reliable
water supply given the unpredictability of rain and the difficulties in aligning culture period with the
rice planting cycle due to fry availability. Irrigation pumps are turned off a few weeks prior to palay
harvesting. Consequently, when tilapia farmers get delayed in their stocking, they encounter
difficulties in sourcing water when the irrigation pumps are turned off. Likewise, there are also
instances when irrigation facilities cannot supply sufficient water. Small scale farmers cannot afford
to install deep wells. In many cases, small farmers are forced to harvest their tilapia even if they are
still below marketable size when irrigation pumps are scheduled to be turned off.
In reservoirs, carrying capacity of the waters is now strictly observed to avoid fish kills and poor
growth. In Central Luzon, some areas such as Minalin, Sasmuan, and Macabebe are prone to
flooding due to heavy siltation of river system. Intervention put forward by stakeholders is the
dredging of the rivers. Reforestation may also be needed to mitigate soil erosion. Further study is
needed to find the most appropriate solution to the flooding problem in these areas. Fish farmers,
however, have in their ways cope with flooding problem by improving their dike system and
management practices.
2. Farming
Grow-out farming involves the rearing of fries to marketable size. In Luzon A Cluster and in the
Philippines, in general, marketable size is at 200 to 250 grams per piece. Culture period ranges from
3.5 to 4 months depending on the size of fry during stocking, water quality, and feeding protocol.
Most farmers practice monoculture. There are three production systems in Luzon A Cluster, namely:
a) Extensive culture: Low intensity aquaculture as practiced by subsistence farmers. Under

extensive culture, tilapia is stocked at low densities in fertilized ponds where the fish are not fed
until natural food is depleted. The common feeds used when there is not enough lablab and
other natural food are rice bran and bakery waste. Minimal labor inputs, little water exchange
and no artificial aeration are applied, and thus low yields are attained.
b) Semi-intensive culture: tilapia is stocked at higher densities and is dependent on natural feeds
and supplemental feeds such as cereals, fishery by-products and/or commercial feeds. Water
exchange under semi-intensive culture conditions is moderate, and aeration is provided partially
or continuously.

c) Intensive culture: tilapias are stocked at very high densities, and are totally dependent on
commercial feeds to supply their nutritional requirements. Water exchange rates are high. It
also requires high labor inputs and continuous aeration.
Table 15 presents a summary of the different production systems and examples of areas where
these are practiced as identified by FAO during its assessment mission early this year and with
additional inputs gathered from field interviews conducted under the PRDP value chain assignment.
Table 15 . Different Culture Systems for Tilapia

Culture System Culture Areas Stock Density Feeding Practice
(Example) (Fingerlings/hectare)
Fishpond
Extensive Ilocos Sur, Ilocos >10,000 dependent on natural
Norte, Pangasinan, food; 40% of production
upland aquaculture/ cost is utilized for lablab
fish terraces production; feeds are
used only when lablab is
depleted
Semi-intensive Ifugao, Pampanga, 10,000 - 30,000 Combination of feeds and
Tarlac, Isabela, Nueva supplemental foods;
Vizcaya, Cagayan feed cost comprised about
50% of production cost
Intensive Pampanga, Isabela 30,000 to 50,000 Feed cost comprised

about 60-70% of
production cost; uses,
aerators, pumps
Fishcage
Intensive Ambuklao Dam 25 to 30/cu.m Relies on feeds; feeds
Magat Dam 2,500 pieces (10x5x3 comprise 70% to 80% of
meters cage) production cost
Source: Miao and Vega, FAORAP/Field interviews
Farmers generally stock fries of sizes 17 to 22. Farms specializing in the production of exportable
size tilapia stock fingerlings weighing 50 grams. Ten years ago, survival rate was at 70% to 80%.
During the last three years, farmers estimate that survival rate was on the average about 50% to
60%. Farmers attribute the decline in production to the following factors: i) use of fries smaller than
size 17 as these were only ones available; and ii) extreme weather – either too hot or too cold.
In extensive system, fertilizer is applied at least six times during the culture period. This is usually
done by dissolving the fertilizer in a bucket of water and dispersing these on the surface of the pond.
In semi-intensive and intensive systems, fertilizer is applied via broadcasting which is economical
and allows the fertilizer to spread much faster.
In subsistence farms, partial harvesting is done depending on need for own consumption and cash.
Complete harvesting of a pond is the most common practice for commercial farms. To harvest a
one-hectare farm (intensive culture) would require 10 to 15 laborers. For semi-intensive and

intensive farms, grow-out farmers haul usually wait for buyers to their fish harvests. In Central
Luzon, only traders have trucks with aerators.
Semi-intensive and intensive

farms usually hire caretakers and
laborers to handle the feeding,
water exchange, cleaning of
farm surroundings, and guarding
the fish from poachers. In small
farms, labor is provided by the
farmer and household members.
One caretaker can handle 4 to 7
hectares. In Central Luzon,
caretakers earn PhP 5,000 per
month plus a 10% share on net
profit. They usually live near the
fishponds and are provided with
housing by farm owners. Tilapia
farmers also hired seasonal labor
during pond preparation and
harvesting. Pond preparation for a one hectare farm provides about 10 person-day work.
3. Trading
Farmers in Ilocos Region and CAR sell directly to vendors and households. The most direct channel —
producer to consumer—is prevalent among small-scale or backyard farms where buyers, usually
neighbors and community members, consume most of the harvest. It is only in Central Luzon and in
Cagayan Valley where tilapia pass through two to four intermediaries before reaching the end
consumers. The marketing channel for fresh tilapia has not changed much since the 1970s. The
chain is still relatively short due to the perishable nature of fishery products and the general
preference of consumers for live tilapia.

Tilapia farmers typically sell their harvest to a trader or fish dealer. Oftentimes, an agent acts as a
go-between the farmer and the fish dealer. Main tasks of agent are to identify farms ready for
harvest, make the initial negotiation, and arrange the schedule of the harvest. An agent gets on the
average a commission of PhP 1 per kilo. The fish dealer picks up the harvest that then transports the
tilapia to the consignation or consolidator in the terminal market. Entry in the brokering services is
limited by large capital requirements and skills such as familiarity with the operations and
relationship with the other traders and suppliers in the fish market. Exit is equally not easy due to
the large investments, including credits to suppliers.
The fish dealer may also be the consignation or the consolidator-assembler in the terminal market.
Wholesalers and the viajeros buy from the consignation and distribute the fish to the retailers or
vendors in various wet markets. There are also cases where fish dealer and the consolidator are the
ones doing the distribution job.
4. Retail Distribution/Vending
The range of retail outlets of tilapia includes public markets, supermarkets, and street hawkers.
Public markets currently hold a significant share of the retail trade of chilled, live fish, fermented and
cured fishery products. Live tilapia is well-established products in the public market. They are
typically sold in simple water tubs. Supermarket chains offer mainly chilled and frozen tilapia.
Range of activities in tilapia retail vending includes weighing, gutting, cleaning or cutting a whole fish
to the desired size or product form. Cleaning, gutting, and slicing are marketing tools employed by
vendors to maintain the loyalty of regular client and attract new customers.

Fish hawkers primarily cater to middle and low-income consumers. They usually set-up temporary
stalls on busy streets or sell from house to house either on foot or riding a bicycle with a sidecar
where carry plastic tubs of fish are loaded.
5. Processing
In CAR, Ilocos Region, and Cagayan Valley, processors consist of micro enterprises and collective
groups trained by BFAR and other government agencies. In Ifugao, the Panopdopan Fisherfolks
Organization (PFO) which has 15 members received a Shared Service Facility (SSF) from the
Department of Trade and Industry (DTI) to boost their production of deboned and smoked tilapia
and tilangggit last May 2014. The BFAR Cooperative has embarked on the production of fish
longganisa and tocino. These are sold within the local market
In Central Luzon, the following are three major processors in addition to micro and home-based
enterprises.
a) Keno Food Incorporated (Bulacan)
The company processes dried tilapia known as “tilapia crunch” using the PHilMech technology,
Multi-commodity Solar Tunnel Dryer (MCSTD). Keno produces about 2,400 kilos of tilapia crunch
every month. Key markets include supermarkets such as Rustan’s and Shopwise, fruit stands,
restaurants, and walk-in clients comprised mainly of balikbayans. The owner is also into tilapia
grow-out operations and sources most of their raw material requirements from their own fishponds.

b) Fisher Farm (Bulacan)
Fisher Farms is a vertically integrated seafood company with complete breeding facilities, grow-out
Farms, feed manufacturing facility, and a processing plant. The company is known for its tilapia and
milkfish products. Key milkfish and tilapia products are frozen whole, clean and gutted milkfish and
tilapia, and fillets. These are exported to USA, Canada, Middle East, Asia, Africa, Australia, and
Europe. The company also supplies supermarkets such as Uniwide, Rustan's, and Isetann.
Tilapia are sourced from own farm and from farmers in Batangas and Pampanga under a buy-back or
contract growing scheme. As a subsidiary to Feedmix Food Nutrition Specialist, a company that
produces and sells aquafeeds, Fisherfarms also serves as marketing arm for Feedmix. Tilapia
growers who use Feedmix are assured that their produce will be bought by Fisher Farm. The
company limits their suppliers to users of Feedmix to ensure quality and traceabiity.
Fisher Farm also offers toll processing services, product customization, and recipe and menu
development.
c) TGA Farms (Pampanga)
The company is also a vertically integrated company. It has its own hatchery, grow-out farms, feed
manufacturing plant, and processing facility. TGA deals only with tilapia products. Main tilapia
products are the fillet and chicharon. The company supplies supermarkets and hotels. Export sales
are very limited due to difficulties in sourcing the required tilapia size.

Company sources from own farms, contract growers and from traders. TGA Farms is also helping
farmers in Pantabangan Dam to improve their cage culture.
C. INTERFIRM RELATIONSHIP AND SUPPLY CHAIN GOVERNANCE
1. Horizontal Relationship
Majority of the hatchery operators in Central Luzon belong to an association. This enables them to
share information on prices, technology, and other business practices.
Farmer groups in Central Luzon, CAR, and Cagayan Valley have not yet fully made use of their
organizations as platforms to promote economies of scale and improve bargaining position with
traders and feed suppliers. Negotiations with traders and feed suppliers are generally conducted
individually although farmers discuss frequently exchange information on prevailing market price. In
CAR, some groups are already engaged in processing and hatchery operations.
Ilocos Region has yet to organize farmers into associations or cooperatives.
2. Vertical Relationship
Informal relationships govern the trade of live and fresh tilapia for the retail market. The entire trade
is not formalized in terms of contracts and agreements between farmers and traders. The flow of
goods and services is based on mutual trust and agreement, which is not documented. ‘Word of
mouth’ is the normal practice in the trade, which shapes the reputation of both farmers and traders.
Farm gate sales in Central Luzon usually have a uniform price for a single harvest given the difficulty
of sorting fish into aerated tanks. Further price differentiation occurs when the fish reach retail
outlets. At retail markets, retailers resort to price reduction before the end of the day if tilapia
remains unsold. In Central Luzon, a price premium of about P5/kg is applied to live tilapia over iced
or chilled fish.
The market channels for fries and fingerlings are relatively short and simple due to the high risks
involved in selling the product. Normally, a hatchery operator sells directly to grow-out farmers,
either through delivery or pick-up. Product delivery and technical advice facilitate and strengthen
relationship between hatchery and farmer.
Feed companies are generally taking a capacity building perspective in building the market for their
products complemented with credit support. Extension officers of feed companies took on the task
of mentoring caretakers and fish farmers in the various aspects of tilapia farming.
Directed governance is prominent in the marketing channel involving medium and large scale
processor. Processors buy fish from fish farmers on contractual agreements. They determine
product quality specifications, pricing structures and other regulations.

D. PRICE AND COST STRUCTURE
1. Income and Profit
Table 16 . Indicative Costs and Returns for One Hectare Tilapia, 2014
Assumptions:
Intensive Culture System
Stocking Density: 50,000
Size of Fry: 22
60% survival rate (30,000 pieces)
Average Body Weigh at harvest: 220 grams
Particulars Unit Quantity Unit Cost Total %
(PhP) (PhP)
MATERIALS 203,420.00 82.30%
Fingerlings (SRT; size 22) pieces 50,000.00 0.50 25,000.00 10.11%
Feeds kilos 6,200.00 28.00 173,600.00 70.24%
Inorganic Fertilizer kilos 450.00 1.60 720.00 0.29%
Organic Fertilizer kilos 100.00 19.00 1,900.00 0.77%
Lime bags 10.00 220.00 2,200.00 0.89%
LABOR 33,750.00 13.65%
Caretaker month 5.00 5,000.00 25,000.00 10.11%
Pond preparation/repair person days 10.00 350.00 3,500.00 1.42%
Harvesting person days 15.00 350.00 5,250.00 2.12%
UTILITIES 10,000.00 4.05%
Diesel 5,000.00 2.02%
Water 5,000.00 2.02%
TOTAL EXPENSES 247,170.00
Total Harvest 6,600 kilos (30,000 pieces with ABW of 220 grams)
Unit Price PhP 70/kilo
Gross Sales PhP 462,000.00
Gross Profit PhP 214,830.00
Share of Caretaker (10%) PhP 21,483.00
Share of Owner (90%) 193,347.00
Profit Margin 47%
Input:Output Ratio 1.87
Production Cost per Kilo PhP 36.62
Pond Establishment Cost PhP 250,000 per hectare
Source: KII
Based on interviews with Pampanga and Isabela tilapia farmers, they spent about PhP 250,000 per
hectare for pond establishment, purchase of small equipment, and installation of deep well.
Production cost for one cropping per hectare with an initial stocking density of 50,000 fries (size 22)

is about PhP 247,170. At a survival rate of 60%, gross sales are about PhP 462,000 with a gross profit
of PhP 214,830. Aside from monthly salary, caretakers are given 10% of the gross profit. The 10%
share is intended to motivate caretakers to do their best to achieve good yield and minimize risks of
poaching and re-selling of feeds.
As can be seen from the Table, material cost comprise 82.30% of total production costs with
fries/fingerlings and feeds as the major cost centers. About 10.11% of the production costs are
spent on fries/fingerlings. With the observed high mortality rate during the recent years, farmers
stock at least 50,000 pieces to improve profitability. Feeds comprise 70.24% of the production cost.
Credit line with feed companies helps farmers in sustaining their operations. However, credit lines
are typically given to farm owners with proven financial capacity.
Labor costs represent 13.65% of production cost with salary of caretakers as the major expense. In
many cases, farm owners assign one caretaker to handle 4 to 7 hectares at the same monthly salary
of PhP 5,000/month. Caretakers are, more or less, happy with the current scheme as they are able
to significantly augment their earnings from the profit sharing. Income of caretakers, however, has
been significantly affected with the increase in mortality rate during the recent years.
2. Relative Financial Position of VC Players
Table 17 . Relative Financial Position of VC Players: Whole Tilapia (1 kg) for Retail Market
Player Product Costs Profit Margins
Total Added % Unit Unit % Profit Unit % to
Unit Unit Added Price Profit Margin Price
Cost Cost Unit
Cost
Farmer Live 36.62 36.62 72.34% 70.00 33.38 51.85% 70.00 60.87%
Fish Dealer Tilapia 74.00 4.00 7.90% 82.00 8.00 12.43% 12.00 10.43%
Consolidator 85.00 3.00 5.93% 92.00 7.00 10.87% 10.00 8.70%
Wholesaler 95.00 3.00 5.93% 102.00 7.00 10.87% 10.00 8.70%
Retailer 106.00 4.00 7.90% 115.00 9.00 13.98% 13.00 11.30%
Total 50.62 64.38 115.00
Source: KII
Total cost to produce and distribute one kilo of live tilapia to the wet market is about PhP 50.62.
About 72.34% of the PhP 50.62 represents farming cost. Fish Dealer’s costs, which comprise 7.90%
of the cost, involve primarily transportation and hauling expenses and the commission of the agent.
The remaining 19.76% of the costs are those incurred by the other intermediaries, which consist
primarily of overhead costs such as transportation and stall rental.
The total profit earned by the chain in the production and sale of 1 kilo of live tilapia is PhP 64.38.
Farmer has the highest percentage share of the profit at 51.85%. However, farmer’s percentage
share of the profit is lower than his/her percentage contribution to added cost. The fish dealer gets a
profit of PhP 8.00/kilo which is about 12.43% of the total profit. The trader’s share of the profit is
higher than his/her percentage contribution to total costs. The percentage share to profit of the
other intermediaries is higher than their percentage share to unit costs. The relative financial

position analysis indicates there is a need to improve farming productivity. Improvement in
productivity will also help farmers in coping with price fluctuation.

Section 4:
MARKETS AND MARKET OPPORTUNITIES
A. MARKETS AND MARKET TRENDS
1. Export Market
Philippine Exports
Although Philippines is the fifth largest producer of tilapia in the world, the country lags behind in
the export market. This is primarily because the country’s production is geared for the domestic
market where the most marketable size is just about 200 to 250 grams. International markets
generally prefer 400 to 500 grams for whole fish and 700 to 1,000 grams for fish that will be filleted.
A report from AquaFish also recounted the experience of an exporter who had to terminate a
contract with an importer due to difficulties encountered by the company’s contract growers in
meeting the 60 tons/month requirement of whole tilapia (800 to 1000 grams). During the recent
years though, it would seem that there has been some marked increase in the volume of tilapia
exported. From 300 MT in 2008, GlobeFish June 2014 report indicated that exports from the
Philippines reached 6,254 MT. According to the same report, the 2013 volume represented an
increase of 185% over 2012.
We have used US imports of frozen and fresh tilapia products to represent export performance of
the Philippines and to present the competitors in each segment. Based on US tilapia imports data
from the United States Department of Agriculture (USDA), Philippines exported in 2013 a total of
224,496.66 pounds (101,829.89 kilos) of tilapia products. Frozen whole tilapia comprised 91% of the
tilapia imported from the Philippines. The remaining 9% consisted of fresh fillet. Tilapia markets in
the United States are segmented between live fish, frozen whole fish, frozen fillets and fresh fillets.
Table 18 . US Tilapia Frozen Whole Imports from selected sources, 2009 to 2013
Trade Indicators 2009 2010 2011 2012 2013
Mainland China
Value (US$ 1000) 44,210 37,372 50,076 40,863 47,334
Volume (in 1000 pounds) 65,459 50,575 56,686 51,417 53,633
Price (US$/pound) 0.68 0.74 0.88 0.79 0.88
Taiwan
Value (US$ 1000) 23,915 25,435 26,263 21,889 31,134
Volume (in 1000 pounds) 29,056 35,927 26,883 23,019 36,063
Price (US$/pound) 0.82 0.71 0.98 0.95 0.86
Thailand
Value (US$ 1000) 1,676 1,783 1,174 920 858
Volume (in 1000 pounds) 1,994 2,613 1,253 1,089 915
Price (US$/pound) 0.84 0.68 0.94 0.85 0.94
Vietnam
Value (US$ 1000) 331 331 331 331 331

Table 18 . US Tilapia Frozen Whole Imports from selected sources, 2009 to 2013
Volume (in 1000 pounds) 292 247 333 561 400
Price (US$/pound) 1.13 1.34 0.99 0.59 0.83
Ecuador
Value (US$ 1000) 5 5 58 259 316
Volume (in 1000 pounds) 4 35 158 191
Price (US$/pound) 1.03 1.65 1.65 1.65
Philippines
Value (US$ 1000) 55 213 411 372 259
Volume (in 1000 pounds) 53 252 435 327 204
Price (US$/pound) 1.05 0.84 0.95 1.14 1.27
Indonesia
Value (US$ 1000) 14 45 63 151 48
Volume (in 1000 pounds) 24 49 44 118 60
Price (US$/pound) 0.59 0.91 1.45 1.27 0.81
Source: USDA Economic Research Service
Note: Still waiting for data from the Foreign Trade Division of PSA
US imports of frozen whole tilapia from the Philippines increased from 53,000 pounds in 2009 to
204,000 pounds in 2013. Philippines exported the highest volume in 2011 but starting 2012 volume
of exports went down which can be most likely due to the lack of supply. In 2012, domestic demand
in the Philippines started to increase due to the rise in the price of the round scad. Frozen whole
tilapia imported into the United States is targeted towards Asian grocery stores. Whole fish imports
comprise about 17% to 20% of total US tilapia imports. China and Taiwan account for almost all
imports of frozen whole fish.
Table 19 . US Tilapia Fresh Fillet Imports from selected sources, 2009 to 2013
Honduras
Value (US$ 1000) 51,608 56,201 61,739 60,565 64,380
Volume (in 1000 pounds) 14,356 15,973 17,814 17,200 18,066
Price (US$/pound) 3.59 3.52 3.47 3.52 3.56
Costa Rica
Value (US$ 1000) 41,979 39,804 38,150 41,874 49,630
Volume (in 1000 pounds) 12,613 12,843 11,837 12,112 14,388
Price (US$/pound) 3.33 3.10 3.22 3.46 3.45
Colombia
Value (US$ 1000) 12,655 13,550 18,238 22,866 30,981
Volume (in 1000 pounds) 3,589 3,960 5,207 6,279 8,513
Price (US$/pound) 3.53 3.42 3.50 3.64 3.64

Table 19 . US Tilapia Fresh Fillet Imports from selected sources, 2009 to 2013
Ecuador
Value (US$ 1000) 57,595 49,741 49,619 43,882 29,954
Volume (in 1000 pounds) 19,974 17,321 16,848 16,246 10,723
Price (US$/pound) 2.88 2.87 2.95 2.70 2.79
Panama
Value (US$ 1000) 10 28 73 1,559 3,460
Volume (in 1000 pounds) 3 8 22 494 1,187
Price (US$/pound) 3.37 3.37 3.34 3.16 2.92
El Salvador
Value (US$ 1000) 3,720 2,448 2,532 1,131 2,480
Volume (in 1000 pounds) 1,060 733 760 333 779
Price (US$/pound) 3.51 3.34 3.33 3.39 3.18
China (Taiwan)
Value (US$ 1000) 1,349 1,250 2,214 2,681 2,158
Volume (in 1000 pounds) 458 485 773 1,023 1,522
Price (US$/pound) 2.94 2.58 2.87 2.62 1.42
Brazil
Value (US$ 1000) 1,892 2,445 530 79 503
Volume (in 1000 pounds) 583 733 162 24 149
Price (US$/pound) 3.25 3.34 3.27 3.26 3.38
China (Mainland)
Value (US$ 1000) 109 541 585
Volume (in 1000 pounds) 46 0 0 446 452
Price (US$/pound) 2.38 1.21 1.29
Philippines
Value (US$ 1000) 0 0 0 21 41
Volume (in 1000 pounds) 0 0 0 5 20
Price (US$/pound) 3.95 1.99
From 5,000 pounds In 2012, US imports of fresh fish fillet from the Philippines grew to 20,000
pounds in 2013. Fresh fillets command a slightly higher price in the United States. Boneless, mild
flavored fish fillets are preferred by American consumers and restaurant chefs. A high proportion of
importers prefer red or gold tilapia. US buyers require Good Agricultural Practices (GAP)
certification as well as compliance to Good Manufacturing Practices (GMP) and Hazard Analysis and
Critical Control Point (HACCP) systems.
The Central America and South America regions specialize in the production of fresh tilapia fillets,
which are exported to the US market. Honduras and Costa Rica are the leading suppliers of fresh

tilapia fillets to the USA. Many of the fresh fillet processing plants in these regions are vertically
integrated companies. Some companies like Regal Springs Tilapia have farms and processing plants
in several countries. Fresh fillet production, however, is concentrated in Central America due to its
proximity with the United States. Delivery of fresh fillet to the United States is mainly done by air
and, as such, proximity is an advantage especially with regards to transportation cost. The farm and
processing plant of Regal Springs in Indonesia focus on the production of frozen fillet.

Frozen tilapia fillets made up 76% of the total US tilapia imports in 2013, with a 5% decline in volume
recorded but a 2% increase in value. The United States did not import frozen fillet from the
Philippines in 2012 and 2013. The last recorded importation of United States from the Philippines
was in 2011. China accounts for almost 90% of the U.S. supply of frozen fillets, with Indonesia as the
other significant source. As can be seen from the Table, Asian countries dominate the supply of
frozen fillets to the United States.
Table 20 . US Tilapia Frozen Fillet Imports from selected sources, 2009 to 2013
Indicators 2009 2010 2011 2012 2013
China
Value (US$ 1000) 363,266 517,934 522,251 611,974 644,347
Volume (in 1000 pounds) 222,022 298,904 261,612 330,415 316,915
Price (US$/pound) 1.64 1.73 2.00 1.85 2.03
Indonesia
Value (US$ 1000) 56,464 68,591 60,047 77,543 81,604
Volume (in 1000 pounds) 19,308 22,491 20,298 26,265 26,017
Price (US$/pound) 2.92 3.05 2.96 2.95 3.14
Thailand
Value (US$ 1000) 3,793 5,489 7,618 14,512 9,323
Volume (in 1000 pounds) 1,497 2,327 2,909 5,360 3,214
Price (US$/pound) 2.53 2.36 2.62 2.71 2.90
Taiwan
Value (US$ 1000) 12,483 10,094 8,421 12,971 8,896
Volume (in 1000 pounds) 5,142 4,957 3,030 3,858 3,309
Price (US$/pound) 2.43 2.04 2.78 3.36 2.69
Ecuador
Value (US$ 1000) 7,392 4,181 3,647 7,727 6,449
Volume (in 1000 pounds) 2,465 1,407 1,104 2,074 1,579
Price (US$/pound) 3.00 2.97 3.30 3.73 4.08
Philippines
Value (US$ 1000) 11 22 8
Volume (in 1000 pounds) 4 20 4
Price (US$/pound) 2.80 1.08 2.10
World Market
International tilapia markets have expanded significantly from almost zero in 1991 to about
US$ 1.7 billion (just for frozen and fresh fillet and frozen whole tilapia) in 2013. The three
key tilapia products being traded in the international market are: frozen whole, fresh or

chilled fillet, and the frozen fillet. International trade of live tilapia is also starting to
emerge.
Producers exporting tilapia have different comparative advantages, and specialize in different
product forms. Factors affecting this are the producers’ different levels of production cost and their
geographical proximity to key importing countries of a particular product format. Asian countries like
China, Taiwan, Indonesia, Thailand, and Vietnam supplies most frozen exports because of their low
technological investment to produce tilapia. China remains the largest exporter of tilapia in the
world. South and Central America supply most fresh tilapia imports due to their relatively close
proximity to the United States, which is the main market for fresh or chilled Tilapia.
The United States is the largest importer of tilapia across all product forms in the world. Emerging
markets for tilapia include African countries, European Union, and the Middle East.
Table 21 . World Imports of Frozen Tilapia, 2012 and 2013

Indicators 2012 2013 % Change
World
Value (in US$ 1000) 129,975 234,453 80%
Volume (in MT) 74,335 125,044 68%
Price (in US$/kg) 1.75 1.87 7%
United States
Value (in US$ 1000) 30,420 50,504 66%
Volume (in MT) 15,310 23,730 55%
Price (in US$/kg) 1.99 2.13 7%
Mexico
Value (in US$ 1000) 9,191 30,908 236%
Volume (in MT) 5,730 15,796 176%
Price (in US$/kg) 1.60 1.96 22%
Zambia
Value (in US$ 1000) 6,827 12,973 90%
Volume (in MT) 5,049 10,417 106%
Price (in US$/kg) 1.35 1.25 -8%
Congo
Value (in US$ 1000) 6,836 11,527 69%
Volume (in MT) 4,846 6,509 34%
Price (in US$/kg) 1.41 1.77 26%
Gabon
Value (in US$ 1000) 4,527 10,612 134%
Volume (in MT) 2,712 5,120 89%
Price (in US$/kg) 1.67 2.07 24%
Netherlands
Value (in US$ 1000) 5,431 10,534 94%

Table 21 . World Imports of Frozen Tilapia, 2012 and 2013
Volume (in MT) 2,425 4,996 106%
Price (in US$/kg) 2.24 2.11 -6%
France
Value (in US$ 1000) 9,103 10,187 12%
Volume (in MT) 5,354 5,712 7%
Price (in US$/kg) 1.70 1.78 5%
Source: Intracen
World imports of frozen tilapia in 2013 registered a 68% increase over 2012 performance. Markets
have also spread geographically from North America to African and European countries. The growth
in export volume of frozen tilapia was largely facilitated by higher demand from Africa and Middle
East countries. Within a period of three years, African imports of frozen tilapia grew from 31,044 MT
in 2010 to 67,263 MT in 2012. China is said to be actively diverting exports of whole frozen tilapia to
African countries. This led to the tightening of supply in the United States and, consequently,
triggered an increase in price.
The market for frozen tilapia in the EU market also registered growth in 2013 with Netherlands as
the distribution center. France is the largest import market in the EU for frozen tilapias. The two
most important tilapia suppliers to the EU in 2013 were China and Indonesia. However, EU buyers
tend to purchase more tilapia from sources other than China on account of the quality image. Tilapia
from Indonesia, Malaysia, and Thailand has a better image. Imports of whole tilapia are expected to
remain stable because it is preferred by ethnic minorities, who purchase the whole fish. Whole
tilapia is mainly consumed by African ethnic minorities. These consumers prefer to purchase whole
fish because they fry it and eat it with the family. Whole tilapia is also imported frozen.
Table 22 . World Imports of Fresh Fillets, 2012 and 2013

World
Value (in US$ 1000) 207,473 274,981 33%
Volume (in MT) 26,771 34,535 29%
Price (in US$/kg) 7.75 7.96 3%
United States
Value (in US$ 1000) 167,770 223,893 33%
Volume (in MT) 20,595 26,690 30%
Price (in US$/kg) 8.15 8.39 3%
Canada
Value (in US$ 1000) 12,388 13,372 8%
Volume (in MT) 1,530 1,601 5%
Price (in US$/kg) 8.10 8.35 3%
Netherlands
Value (in US$ 1000) 5,571 11,921 114%

Table 22 . World Imports of Fresh Fillets, 2012 and 2013
Volume (in MT) 705 1,342 90%
Price (in US$/kg) 7.90 8.88 12%
Source: Intracen
In fresh fillet, number of importing countries is low compared to the frozen segments. This is
primarily due to price and shelf life constraints. The United States accounted for 77% of the world
import volume in 2013.
Table 23 . World Imports of Frozen Fillets, 2012 and 2013

World
Value (in US$ 1000) 1,042,574 1,194,261 15%
Volume (in MT) 241,527 262,560 9%
Price (in US$/kg) 4.32 4.55 5%
United States
Value (in US$ 1000) 776,657 795,449 2%
Volume (in MT) 168,950 160,464 -5%
Price (in US$/kg) 4.60 4.96 8%
Mexico
Value (in US$ 1000) 44,853 136,545 204%
Volume (in MT) 13,359 35,962 169%
Price (in US$/kg) 3.36 3.80 13%
Russia
Value (in US$ 1000) 49,061 58,733 20%
Volume (in MT) 17,558 19,306 10%
Price (in US$/kg) 2.79 3.04 9%
Spain
Value (in US$ 1000) 12,557 19,403 55%
Volume (in MT) 4,038 5,810 44%
Price (in US$/kg) 3.11 3.34 7%
Poland
Value (in US$ 1000) 12,931 17,296 34%
Volume (in MT) 4,600 5,658 23%
Price (in US$/kg) 2.81 3.06 9%
Source: Intracen
Among the three product presentation of tilapia, frozen fillet commands the highest volume
especially among developed countries. World imports of frozen fillet increased by 9% over 2012

performance. Similar to other product formats, the United States is the largest importer and
accounted for 61% of the total volume in 2013.
Although pangasius is still the most tropical whitefish species in the European market, frozen tilapia
fillet is gaining market acceptance. The EU import of pangasius is far greater than for tilapia, mainly
due to lower import prices for pangasius. However tilapia is gaining grounds. The EU import value for
frozen pangasius fillets in 2011 was almost 9 times higher at €410 million. In 2013, this import value
was only 4.5 times higher at €289 million. (CBI Factsheet) The four biggest EU importers for frozen
tilapia fillets are Poland, Spain, Germany, and the Netherlands.
Trends in the Asian Market (primarily from InfoFish)
Below are the key tilapia trade trends in the Asian Market:
a) The most vibrant inter-regional tilapia trade is in live form. Live tilapia is imported from China
into Hong Kong and from Malaysia into Singapore. Exports from China to Hong Kong markets
were more than 10 000 tonnes in 2013. Sometime in October 2014, an initial 10,000 kilos of live
red tilapia was shipped to Singapore by Aqua Penon Hatchery (Davao Region). Farm gate price
of live red tilapia in Davao is at PhP 250/kilogram.

b) Red tilapia is preferred and get better price than grey tilapia. It also commands a higher price. In
Davao, Aqua Penson Hatchery sells the fresh red tilapia at PhP 150/kilogram.
c) Izumidai or high quality brackishwater tilapia fillet is now used for sushi and sashimi in Japan. In
international trade, the price of sashimi grade tilapia is US$ 10 – 11 per kilogram.
2. Domestic Market
Most of the tilapia raised in the Philippines is consumed locally. Tilapia has replaced “galunggong” or
the round scad as the poor man’s fish. It has provided Filipinos, especially the lower income
households, with access to cheap source of animal protein. The annual per capita consumption of
tilapia in the Philippines in 2013 was at 3,12 kilogram, which was higher than that of milkfish (2.67
kilograms per year) or round scad (1.81 kilograms per year). The higher level of consumption may
partly be attributed to the relatively lower market price of tilapia compared to milkfish and round
scad and its wide availability.

Based on Fishery Commodity Roadmap prepared by BFAR, Philippines registered a surplus
production of 41,403.12 metric tons for tilapia in 2013. Six regions (Cagayan Valley, Central Luzon,
Calabarzon, Bicol, Soccsksargen, and ARMM) have reached 100% sufficiency level while the rest of
the regions registered deficits. In Luzon Cluster A, production in CAR and Ilocos Region is not
sufficient local requirements. On the other hand, Central Luzon has a surplus of 67,197.89 MT. It
appears that supply deficit of CAR and Ilocos Region can be supplied by Central Luzon. Collectively,
Luzon A Cluster has a surplus of 48,730.57 MT. Most of the surplus production is traded in Metro
Manila.
Table 24 . Tilapia Self-Sufficiency Level and Surplus Production in Luzon A Cluster, 2013
Region Self-Sufficiency Level Surplus (Deficit) – in MT
CAR 40.59 (4,780.62)
Ilocos Region 38.33 (18,289.72)
Cagayan Valley 139.30 4,603.02
Central Luzon 217.51 67,197.89
Total Surplus (Deficit) 48,730.57
Source: Fishery Commodity Roadmap (Tilapia)
Based on data from the Philippine Fisheries Development Authority, tilapia unloading in Navotas Fish
Port increased from 4,966.10 MT in 2012 to 5,893.44 MT in 2013 or a 19% increase. Using tilapia
unloading as proxy indicator for demand, it would seem that Metro Manila demand for tilapia has
increased. The study on Demand for Fish in Asia: A Cross-Country Analysis (M. Dey, et al) which

covered Philippines similarly found demand for low-value fish, crustaceans/molluscs and dried fish
to be price inelastic. The price inelasticity can be explained by the fact that low-value fish is the a)
cheapest form of animal protein that is affordable for the poor. Since the price is generally low,
there is limited number of substitutes for fish as protein source at that price range, thus making the
low-value fish inelastic. The same study showed high value species such as grouper and tuna to be
price elastic. One possible explanation for this is that the high-value species can have numerous
substitutes at their price range in terms of meat and other poultry products. Hence, even if the rich
households can afford to pay the price of the high-value fish, they tend to respond quickly to any
price change, thus rendering this subgroup to be price elastic.
Households prefer 200 – 250 grams live tilapia. Consumers in Metro Manila are not so particular on
the skin color of the tilapia. However, households in Northern Luzon areas such as Pangasinan and
Baguio prefer darker skinned tilapia because it is perceived to contain more belly fats and tastier
than lighter skinned tilapia.
Supermarkets, hotels, and restaurants especially those catering to the more affluent customers
prefer 250 to 350 grams frozen whole tilapia. These institutional buyers are also the main customers
for frozen fillet. While the wet market is already well-served by the tilapia industry, the institutional
buyers and the processors have difficulties in meeting fillet orders due to limited supply of tilapia
that are more than 500 grams and low fillet recovery.
Key issues that impede the expansion of markets of tilapia are the following:
a) Tilapia sporadically contains an off-flavor/”muddy” taste: Two chemicals, geosmin and 2-methyl-
iso-borneol (MIB), have been implicated in episodes of earthy/muddy flavours in farmed fish.
The chemicals are the result of the growth of microorganisms, particularly cyanobacteria, in the
water. The presence and intensity of the taint in fish varies seasonally and is associated with
blooms of the cyanobacteria in the phytoplankton, typically in the warmer months, and a wide
range of species in the phytoplankton have been identified as producing geosmin or MIB or both
. The development of these undesirable microorganisms may also be caused by excess feed at
the bottom of the pond which is usually ingested by the fish through the gills.
b) Relatively low percent recovery for tilapia fillets compared to other fishes with a more beneficial
body form: This has become even more of an issue as processors implement additional trims and
deeper skinning at the request of some customers. Problem is further aggravated when tilapia is
less than 700 grams.

B. PRICE TRENDS
1. Export Market
Price of fresh fillet is about 75% higher than that of frozen fillet. Frozen whole tilapia commands the
lowest price in the market. Across all product types, prices in 2013 were higher than in 2012.
Frozen whole tilapia registered the highest price increase at 7%. This was primarily due to the
significant increase in demand from Africa which to some extent caused the tightening of supply of
tilapia.

Compared to major suppliers of frozen whole tilapia to the United States, Philippines had the highest
price. In 2011, price of tilapia from the Philippines was just about 7% higher than China. It was
during this year that the United States imported the highest volume from the Philippines. Although
it is not clear whether orders from the United States went up due to a relatively competitive price
from the Philippines or Filipino exporters were able to bring down production costs due to
economies (arising from bigger volume), it nevertheless gives some hope that Philippines can be
competitive in this product segment. In 2012 and 2013, the gap between Philippine prices and that
of China was over 40%. During these years, volume imported by the United States also started to
decline.
Table 25 . Average US Import Price for Fresh Fillet, 2009 to 2013

Exporting Country Unit Price (US$/pound)
2009 2010 2011 2012 2013
Honduras 3.59 3.52 3.47 3.52 3.56
Costa Rica 3.33 3.10 3.22 3.46 3.45
Colombia 3.53 3.42 3.50 3.64 3.64
Ecuador 2.88 2.87 2.95 2.70 2.79
Philippines 3.95 1.99
Source: USDA
Honduras, Costa Rica, and Colombia have more or less the same price level. The significant
difference in price between these countries and Ecuador is due to the size of fillet. Ecuadorian
farmers are into polyculture of tilapia and shrimps and, as such, their tilapia is smaller than those
produced in monoculture systems in Honduras, Costa Rica, and Colombia. The large sized tilapia
fillets command a higher price than the small ones. The huge difference between the 2012 and 2013
prices of tilapia from the Philippines may also be related to the size.
Table 26 . Average US Import Price for Frozen Fillet, 2009 to 2013

Exporting Country Unit Price (US$/pound)
2009 2010 2011 2012 2013
China 1.64 1.73 2.00 1.85 2.03
Indonesia 2.92 3.05 2.96 2.95 3.14
Taiwan 2.43 2.04 2.78 3.36 2.69
Thailand 2.53 2.36 2.62 2.71 2.90
Philippines 2.80 1.08 2.10
Source: USDA
The price of tilapia has generally been on an increasing trend. Indonesia and Thailand are perceived
to have better quality products and, thus, are able to get a slightly higher price than China. Level of
supply in China to some extent influences the world market price. Based on 2010 and 2011 prices of
tilapia from the Philippines, it would seem that the country has opportunities to compete in this
segment.

2. Domestic Market
On the average, wholesale prices in Luzon A regions increased by 15% between the period 2009 to
2015. Cagayan Valley registered the highest percentage increase at 18%, followed by Ilocos Region
at 17%. Central Luzon had the lowest percentage increase at 10%. The difference in percentage
increase between regions is somehow also a reflection of the industry structure, the geographic
reach of their products, and degree of competition. While Ilocos Region and Cagayan Valley sell
primarily within the region, their supply chains are relatively shorter compared to Central Luzon
which caters both to markets within and outside the region. As products are shipped greater
distances, an array of costs is layered on top of the price of the fish at each stage of the marketing
chain as it moves to the consumer. Consequently, price at each stage of the marketing chain has to
be carefully controlled for the whole chain to remain profitable. As a result, the farm share of the
product’s price declines as it moves to the retail outlet. Volume and productivity become important
parameters to financial viability as market expands geographically.
Wholesale prices in Ilocos Region and Central Luzon in 2013 were more or less at the same level.
Price of tilapia in Cagayan Valley in 2013 was 34% higher than in Central Luzon. Based on field
interviews, price structure in CAR is also similar with that of Cagayan Valley. The price structures
CAR and Cagayan Valley suggest heavy dependence on tilapia as food fish. In Central Luzon,
wholesale price takes its cue from the prevailing retail prices within the region, in Metro Manila,
and key cities in Ilocos Region and CAR. Retail prices of tilapia in these areas are influenced by
availability of other lower priced fish such as the round scad. Although Ilocos Region is not self-
sufficient in tilapia, the region has other food fish abundant in the area such as the milkfish. Tilapia
prices are generally lower if there is an abundant supply of popular low-priced marine fish in the
market, particularly of those species considered as its substitutes. Past studies indicate that round
scad, milkfish, and to a limited extent, meat products are tilapia substitutes. Interviews with traders
indicate that the demand for tilapia responds more to price changes of round scad than to price
changes of meat products.

Section 5:
SUPPORT SERVICES
A. FINANCIAL SERVICES
1. The Fisheries Financing Program (FFP), a joint undertaking of the Department of Agriculture –
Agricultural Credit Policy Council (DA-ACPC), the Land Bank of the Philippines (LBP), and BFAR
offers lending conduits in the fisheries and aquaculture industries the following financing
facilities:
a) Portfolio Rediscounting which provides borrower organizations a credit line from which they
can lend to individual borrowers whose promissory notes (PNs) are endorsed to Land Bank
for 100% rediscounting. .
Eligible sub-borrowers include household heads, spouses, or adult working members of

small fishing households. Only one member per household is allowed to borrow at a single
time.
The credit limit for value chain financing is P100,000 per sub-borrower while that for micro-
financing would depend on the repayment capacity of the sub-borrower based on his
household cash flow, but not to exceed P50,000 per borrower.
For value chain financing, loan maturity would be based on the sub- borrower’s repayment
capacity, but it should not exceed one year. For microfinancing, loans have a one year
maturity, with at least 30% of the loan amount to be amortized, the payment schedule of
which shall be based on the sub-borrower household’s cash flow, but should not be longer
than monthly.
Interest rates and collateral requirements for sub-borrowers would depend on the prevailing
interest rates and security policies of lending conduit organizations and institutions
b) Short-term working capital loan for covering the operational and management expenses of
an income-generating project proposed by a borrower organization or institution
c) Term loan to enable a borrower organization to expand its project’s operations and increase
profits over a period longer than one year.
Uptake of the program has generally been limited due to the lack of well-established or matured
organizations.
2. Feed suppliers’ credit schemes have helped farmers overcome financial barriers facing tilapia
production. Under suppliers' credit schemes, feed companies provide credit lines to farmers who
pay for the inputs at harvest. This facility though is generally only available to commercial farms
who can present documents (e.g., bank account, asset) that will demonstrate their capacity to
pay.
3. Contract growing scheme offered by vertically integrated processors also facilitate access of
farmers to inputs especially feeds. Processors usually prefer to work with commercial scale
farms rather than backyard farms. Farmers are also obliged to sell all produce to processor

which creates hesitation among farmers given the strong local demand for tilapia of smaller sizes
and, hence, shorter culture period.
4. Fingerlings dispersal of BFAR and the local government units which is a form of financial services
has enabled resource poor households to venture into tilapia farming. However, farmers are
generally still not able to scale up operations due to limitations in resources. Most recipients
employ extensive culture which generally has low yield and requires longer culture. This is
primarily good for achieving food security objectives.
5. Although crop insurance for aquaculture farms is available in the Philippines, uptake has been
low among farmers and generally only among those who availed of state sponsored credit
programs. Aside from protecting farmers from crop failure due to calamities, crop insurance can
potentially facilitate access to credit as it can serve as a substitute for physical collateral and give
banks more security and incentive to lend to the sector. Interviews indicate that farmers do not
yet fully appreciate the benefits of crop insurance and are more inclined to look at it as an
additional cost despite the subsidy.
Currently, there is no weather-based index insurance (WII) scheme that has been developed or
piloted for tilapia farmers and the fishery industry as a whole. Based on experiences of ongoing
WII pilots, there seems to be a potential to develop weather-based and area-based parametric
indices for tilapia farming. This may help reduce risk aversion among farmers as well as facilitate
speedy rehabilitation after natural calamities.
B. NON-FINANCIAL SERVICES
1. Most input suppliers particularly fry/fingerlings and feed companies provide technical support to
farmers and caretakers as part of their after-sales service. According to caretakers, they learned
the technical aspects of tilapia farming from technicians of feed companies. The active
involvement of feed companies in research and development and extension activities has helped
in the upgrading of the tilapia industry. A major limitation, however, is that outreach of feed
companies is generally limited to their clients (users of commercial feeds).
2. Social and community-based networks facilitate informal technical information exchange and
knowledge dissemination among farmers. Farms are usually clustered in one location and, as
such, farmers and caretakers learn from each other.
3. Government agencies with BFAR and technicians from local government units as the lead also
remain important sources of technical advice to farmers. However, government budgetary
constraints have limited the number of fishery extension workers. Tilapia farming in Central
Luzon and nearby provinces has benefited enormously from substantial and continuous
research, technology development, training, and extension, especially those undertaken at the
Tilapia Science Center, CLSU (FAC and College of Fisheries), and NFFTC/BFAR. The table below
presents the major government agencies involved in the delivery of support services to farmers.

Table 27 . Key Public Sector Providers of Non-Financial Services
Organization Services
Bureau of Fisheries and Aquatic Research and development
Resources (BFAR) Technical trainings, seminars and consultancy
Market matching
Establishment of techno – demo farms
Support to establishment of hatcheries
Support to farm establishment and postharvest facilities
Fingerlings dispersal
Assistance in accessing credit/financial services
Organizational development
University of the Philippines – Research and development
Marine Science Institute (UP- Technical training and consultancy
MSI)
Southeast Asian Fisheries Research and development
Development Center Technology development and transfer
Department of Trade and Investment promotion
Industry (DTI) Shared Services Facility Grant
Market matching
Enterprise development assistance
Provincial and Municipal Local Organizational development
Government Units Enterprise management training
Production technology training
Fingerlings disposal
Support to farm establishment and postharvest facilities
CLSU and other state Research and development
universities and colleges Technology development and transfer

Section 6:
ENABLING ENVIRONMENT
A. FORMAL RULES, REGULATIONS, AND POLICIES
Below are the key issues that promote and/or hinder the development of the tilapia industry:
1. The Local Government Code of 1991 (Republic Act 7160) devolved many of the functions of
central government offices to local government units, including extension services, regulation
and licensing, and law enforcement in municipal waters. Increased capacity-building efforts at
the local level are required if local governments are to fulfil their mandates. One of the focuses
should be on helping tilapia farmers transform their farms into viable enterprise units compliant
with Good Aquaculture Practices.
2. There is a need to further improve the implementation of water resource and waste disposal
management including water pollution especially in tilapia production areas. Clean waters
would help reduce incidence of pests and diseases and promote robust fish growth.
3. Lahar deposits have altered the topography of Central Luzon. The beds of many watercourses
and river tributaries are now higher than the old riverbanks. Likewise, the clogging of river
channels, creeks, and canals especially in Pampanga has obstructed the natural flow of
floodwaters and caused flooding in low-lying areas. The tilapia farmers are requesting for
interventions that would help reduce incidence of flooding.
4. The demand for sustainable seafood is rising in developed countries like the United States and
European Union. The imperative of moving towards more sustainable aquaculture practices that
respect local ecosystems within broader landscapes is also increasingly becoming important in
the light of climate change and pressure among consumers for buyers to be more accountable
for social and environment responsibilities. Importers generally require their suppliers to be GAP
and GMP certified. The Aquaculture Stewardship Council is an emerging certification scheme for
aquaculture products and is expected to become a buyer requirement in EU member states like
the Netherlands and Germany. ASC has a separate standard for tilapia that has been finalized in
2011. Many of the compliance points in the various codes of conducts are also prescribed in
standards and legislations promulgated by the Philippine government. The problem though is
the lack of implementation and promotion of its widespread adoption. To ensure that
certification does not exclude smallholders and micro businesses, reform in the delivery of
extension services to facilitate compliance will require the adoption of a multi-provider model
and market-based delivery mechanisms including partnerships with lead firms. Access to
financial services and improved infrastructure are also important in achieving certification status
and sustainable production as a whole.
B. INFORMAL RULES AND SOCIO-CULTURAL NORMS
1. The major sources of social capital among farmers are kin networks, home neighborhood, farm
neighborhood, and membership in a collective group (associations/cooperatives). The farmers
give premium to interpersonal relations. Harnessing the kinship/interpersonal relations factor
can facilitate compliance to market standards, access to credit, and reduce transaction cost in
the sharing and diffusion of GAqP. The farm is the community space where sharing and learning
of technologies like GAqP can occur. Familial tie is the radius of spontaneous sharing, whereas

the farm can be the radius of spontaneous diffusion, where both sharing and learning can
happen.
2. The attitude of “Bahala na" (letting go/come what may) that may be positively viewed as being
available to God, being resilient, and having a sense of hope. It can also be viewed negatively as
being fatalistic, resigned, tolerant, and over dependent on authority. It can also result in
overconfidence that things will work out in their interests, without much input on their part.
This can have implications on the way that farm enterprises are managed and operated.
3. Resource-poor farmers are generally risk adverse. As such, it is oftentimes important to

demonstrate the viability and benefits of the change initiative or improved technology. For
activities to be effective in resolving doubts and hesitations of farmers and other value chain
players, these should: a) provide safe spaces for reflection and sharing; b) build relationships;
and c) develop responses based on personal experiences, abilities, and perceptions. Visits and
interactions with people exhibiting the desired behavior and demonstration farms can be very
helpful in guiding target groups toward an acceptable resolution of their doubts about the
change initiative. value chain players especially farmers see information from peers who have
undergone the process as more credible than information from other sources.
4. There is a need to fully understand the logic and functioning of indigenous production systems
before seeking to inject modern or upgraded technologies and knowledge. Likewise, indigenous
communities should be active participants in the upgrading initiative to ensure ownership and,
consequently, commitment to the change process.

Section 7:
CONSTRAINTS AND OPPORTUNITIES
Table 28 . Constraints and Opportunities

Opportunities Constraints Province
INPUT PROVISION
On-time access to good quality Erratic and low productivity of Ilocos Regio
fries and fingerlings can improve hatcheries due to effects of climate Pangasinan
La Union
profitability of grow-out farms change resulting to lack of supply of
fries and fingerlings during stocking Cagayan Valley
periods Isabela/Santiago City
Central Luzon
Nueva Ecija
Lack of know-how, skills, and Pampanga
resources to implement climate
smart hatchery production systems
Existing production capacity of

hatcheries not sufficient to meet
local requirements (Ilocos Region)
Experiences of hatcheries during the recent years indicate their high vulnerability to adverse weather
conditions. Due to adverse weather conditions (either too hot or too cold, prolonged summer and
rainy seasons), fry production has been seriously hampered and hatchery operators are not able to
neither reach their optimal production nor serve farmers at the time that they needed the seeds. The
erratic production affected the whole industry. Farmers were not able to stock on time which was
detrimental in various ways depending on the culture system. Late stocking for farmers dependent
on rainfall and irrigation facilities meant premature harvests. For many of the farmers, late stocking
beyond the favorable period meant increased risks.
Likewise, due to spawning and egg production problems brought about by erratic weather
conditions, grow-out farmers had no choice but to buy and stock size 22 fries which are still
vulnerable to predation and historically with low survival rates compared to bigger sized seeds. This
implied longer cultivation period in addition to low survival rate.
Current production systems of hatcheries are not climate change resilient. Hatchery operators lack
the know-how, skills, and resources to implement resiliency measures in responding, coping and
adapting to climate change.
In Ilocos Region, in addition to production problems due to climate change, the production capacity
of existing hatcheries is not sufficient to meet fry requirements. As such, tilapia farms tend to
understock and expansion of production areas has been very slow.
Stocking of bigger sized seeds High mortality rate of fries/Declining CAR
(e.g., size 10 and 14) will improve survival rate due to increasing use of Ifugao
survival rate and can potentially very small seeds Benguet
enable farmers to grow tilapia at
Ilocos Region
the size and weight required by No supply chain for bigger sized
Ilocos Sur
fillet processors at a shorter seeds (fingerlings stage) Pangasinan

period than 8 months Cagayan Valley
Lack of capacity to grow tilapia Cagayan
Growing demand for 500 grams profitably at the size and weight Isabela/Santiago City
and above tilapia from required by the processors, Nueva Vizcaya
institutional buyers and the export institutional market, and export
Central Luzon
market market Bulacan
Nueva Ecija
Pampanga
The stocking size of tilapia for grow-out pond production is dictated by the common size of fries and
fingerlings available from tilapia hatcheries. During the recent years, the most readily available fries
are sizes 22 and 24. A common practice in Northern and Central Luzon regions is to directly stock the
fries or fingerlings into the grow-out pond. In other areas like Batangas and countries such as
Indonesia and Vietnam, fries are grown into size 10 or 14 in nurseries. The nurseries are set-up as
separate businesses apart from hatchery and grow-out systems. As per experiences of farmers in
Luzon A Cluster, mortality rate increased from 30% to 50% when they started stocking size 22 and 24
fries. The low survival rate reduces profit margins as well as raises the costs of production. Bigger
size fingerlings are thought to survive better, grow faster, reach market size sooner and, perhaps,
pave the production of bigger size tilapia for fillet processing and for export. Direct stocking of size
22 fries in grow-out ponds is also an inefficient use of pond facilities because of low fish biomass
during the first month of production.
The high local production of tilapia particularly in Central Luzon and its huge export market makes
this fish a potential source of dollars for the country. With current production already sufficient to
meet domestic requirement, there is a need to develop markets outside of the country. Likewise, to
avoid an oversupply in the domestic whole fish market segment, the tilapia industry has to divert
some of it production towards supplying the fish fillet chain. A main constraint, however, is that
Filipino tilapia farmers lack the capacity to grow tilapia profitably at the size and weight required by
fillet processors. The marketable size of tilapia for the local market is only 200-300g per piece while
processors require at least 700 to 1000 grams fish for maximum fillet recovery rate. Unless a more
cost efficient system to produce bigger sized tilapia is developed and adopted, the Philippines will
never be able to compete for the export of this fish. Likewise, a stable year round production is
necessary if Luzon A Cluster would want to penetrate the fillet market segment.
Improvements to feed Lack of financial capacity to pay for CAR
management and procurement feeds outright Abra
strategies can help farmers reduce Ifugao
cost Rising cost of feeds Benguet
Ilocos Region
Existing technologies, ranging Lack of know-how on proper feed Ilocos Norte
from the formulation of farm- management/efficient cost-saving Ilocos Sur
based feeds to the use of efficient feeding strategies La Union
fertilization and feeding strategies Pangasinan
are currently available.
Cagayan Valley
Feed companies offer credit Cagayan
Isabela/Santiago City
line/Contract growing with Nueva Vizcaya
processors can facilitate access
to feeds and other inputs Central Luzon

Collective procurement/bulk Bulacan

buying can reduce cost of feeds Nueva Ecija
Pampanga
and improve bargaining power
Among resource poor farmers, the main method to feed fish is to support algae production in ponds
by adding livestock manure or plant material into water. Nutrient intake is limited when the fish is
grown using only this method resulting to low yield and stunted growth. Likewise, when the scale of
operations increases, feed requirements cannot be always met by pond fertilization and collection of
feed from the immediate vicinity. Supplementary feed especially commercial feeds require cash
outlays which resource poor farmers cannot pay outright. Lack of cash and difficulties in accessing
credit are major barriers for the poor to undertake aquaculture on their own. Feed companies are
generally more inclined to offer credit to farmers that can prove that they have the capacity to pay
and those with volume requirements. There are nutrition-rich ingredients that can potentially be
made into feeds to supplement commercial feeds but farmers lack the experience, know-how, and
facilities to fully utilize these resources.
Because feed comprises the major costs of a tilapia farming business, a well-performing and cost-
effective feed formula and feeding regime are important considerations in making fish farming
viable. Many farmers and caretakers tend not to adopt optimal feed management practices and, in
many cases, overfeed their fish in the belief that more feed will produce heavier fish. The adoption of
inappropriate feeding strategies and the inadequate monitoring of feed usage can result in feed
wastage that negatively impacts production parameters. In some cases, farmers and caretakers also
lack the necessary knowledge required to optimize their feeding strategies especially the interactions
between feeding behavior and environmental parameters and the contribution that natural
productivity makes to the nutritional status of the culture system. From an economic perspective, the
high costs that accrue to feed use suggest that the optimization of feed management practices will
have a significant impact on the economic viability of a tilapia farm.
FARMING
Good agronomic practices and Limited outreach of existing CAR
sustainable farming practices can extension services and providers Abra
reduce incidence of diseases and Ifugao
improve resilience to climate Low uptake and adoption of good Benguet
change resulting to overall agricultural practices and
sustainable production practices Ilocos Region
increase in survival rate, Ilocos Norte
productivity, and better market Ilocos Sur
Lack of capacity to comply with
access. La Union
certification requirements
Pangasinan
GAP certification required to
access export markets. This can Lack of know-how, skills, and
Cagayan Valley
potentially provide incentives to resources to implement climate Cagayan
adopt good practices. smart tilapia farming Isabela/Santiago City
Nueva Vizcaya
Central Luzon
Bulacan
Nueva Ecija
Pampanga
Consumers are increasingly concerned about food safety and the impacts of food production on the

environment. The tilapia industry in Northern and Central Luzon, if it wants to be a player in
international trade, will need to promote compliance to Good Aquaculture Practices (GAqP) at the
minimum and the achievement of sustainability certification to further boost its competitiveness and
the long-term viability of the industry. In adopting these standards, the tilapia industry can better
meet the demands of the growing global market for wholesome seafood produced in an
environmentally and socially responsible manner.
The tilapia industry in general has achieved a level of economic success that now must be
safeguarded by creating a sustainable development approach that reaches both smallholders and
large operators. Tilapia is sensitive to changes in salinity, water quality and sea surface
temperature. Important climate-related risks identified include extreme temperatures (hot and cold),
excessive rainfall, prolonged cloud cover, flood and drought. Low survival rate and slow growth are
among the key problems faced by the industry. Weak compliance to GAqP and lack of capacity to
mitigate effects of climate change undermine sustainability and profitability of operations. There is a
need to develop onsite capacity to monitor water parameters to determine changes in salinity and
temperature and the effect or reaction of tilapia. Avoiding and managing climate risk is a
prerequisite for the tilapia industry to continue its upward trajectory. Healthy ecosystems are
prerequisites for healthy aquaculture operations. Therefore, protecting freshwater and
brackishwater ecosystems can provide the multiple benefits of climate change adaptation, climate
change mitigation, and support to aquaculture in a cost-effective manner.
Gustatory quality is also important. Taste tests have demonstrated that tilapia does not absorb off-
flavor from animal manures, but they do absorb off-flavors produced by certain blue-green algae and
other microorganisms. The muddy flavored flesh is more prevalent in tilapia cultured in freshwater
than in saline water. Muddy flavor can be found in any cultured fish but tilapia appear to have a
higher incidence of off-flavor than most freshwater fish because they are reared in highly fertile
waters with higher incidence of blue-green algae blooms. Improved water quality management and
postharvest practices can reduce risks of producing off-flavor tilapia.
Current services/service delivery modalities lack the depth and breadth of outreach. There is a lack of
on-site providers to help growers improve their farming practices and comply with Good Aquaculture
Practices (GAqP). Many of the farms do not have the resources and capacity to ensure production of
tilapia according to the principles of sustainable farming practices and to achieve certification, which
is increasingly becoming important in the international trade of tilapia. In the medium term, non-
achievement of certification status may exclude the participation of tilapia farmers in Luzon A Cluster
in global value chains.
Vulnerability to flooding due to Central Luzon
clogged river channels, creeks, and Pampanga
canals
Poor drainage system of some

fishpond/ Weak environmental
management
In addition to destruction of aquaculture infrastructure, flooding also causes high mortality and
escape of fishes. Aside from heavy siltation, flooding is also a result of weak environmental
management and poor drainage system of fishpond.

POSTHARVEST/MARKETING
Collective marketing will facilitate Lack of access to resources and facilities CAR
access to bigger markets, improve that will enable cooperatives to engage Benguet
bargaining position of farmers, in collective marketing
Ilocos Regio
and reduce cost of marketing Pangasinan
Individual marketing resulting to low
bargaining power Cagayan Valley
High cost of transactions incurred by
buyers in collecting small volume of
harvests resulting to exclusion of small Central Luzon
farmers Pampanga
Central Luzon
Poor Farm to Market Roads
Pampanga
Farmers’ dependence on market intermediaries for aeration and transport needs helps the latter to
monopolize trade and control the farmers’ access to markets and market information. This reduces
the farmers’ bargaining capacity in the market,
There is also a lack of infrastructure for facility for collection, depuration, and sorting of harvests
resulting to quality and trust issues (e.g., lack of transparency in weighing as farmers depend on
weighing scale of buyers). For processors and consumers, the main quality issue for tilapia is the off-
flavor taste. Off-flavor in tilapia can be removed through the process of depuration which involves
placing the fish in in clean water without the causative organisms.
INTERFIRM RELATIONSHIP
Farmers in the same village know Low bargaining power CAR
each other quite well and have Abra
had experiences of working Lack of organized groups Ifugao
together. Such ‘natural–social Benguet
constituents’ can be harnessed to
Ilocos Region
get them to work together Ilocos Norte
Ilocos Sur
Processors are more inclined to La Union
work with commercial scale farms Pangasinan
Feed suppliers are more inclined Cagayan Valley

to support commercial scale farms Cagayan
Nueva Vizcaya
Central Luzon
Bulacan
Nueva Ecija
Pampanga
Small volumes of output pre-dispose smallholders to weak bargaining position in the market.
Incomes are eroded due to lack of economies of scale (e.g., small individual purchases of inputs, high
transport cost per unit of produce, etc.) Farmers in the same village tend to help each other in their
farms but there have been little initiatives to exploit opportunities with respect to collective
procurement and marketing.

Section 8:
COMPETITIVENESS DIRECTIONS
A. COMPETITIVENESS VISION
From a predominantly domestic market orientation, the tilapia industry in Northern and Central
Luzon regions hopes to evolve into one that supplies both domestic and export markets with Central
Luzon and Isabela tilapia industries as the frontrunners in the development of the export supply base
for fillet and whole fish. To become a globally competitive, technologically appropriate tilapia
industry that meets increasing demand for fish that are affordable and meet high standards for
safety, quality, and environmental stewardship, with maximum opportunity for profitability and
economic growth, the following priority areas for investment were identified by industry
stakeholders and players:
a) Adoption and implementation of climate smart hatchery/fry production system
b) Establishment of nursery enterprises to produce bigger sized fingerlings
c) Establishment of village level feed processing plants to produce low-cost nutritious feed to
supplement commercial feeds and adoption of cost-reducing feeding strategies

d) Improvement of flow of services to facilitate compliance to GAqP and increase climate change
resilience
e) Strengthening of environmental management system in low lying areas in Pampanga
f) Establishment of common service facilities to ensure premium quality and facilitate collective
marketing
g) Improvement of horizontal collaboration especially among farmers
B. PRIORITY CONSTRAINTS/OPPORTUNITIES AND INTERVENTIONS

Drawing on findings from the end markets and value chain analysis and the required industry
changes identified by VC actors and stakeholders, below are the proposed intervention strategies
and approaches to improve market competitiveness of the Luzon A Cluster tilapia industry while
promoting broad-based growth and climate change resilience. Prioritization of interventions for
Ilocos Region, Isabela, and Central Luzon (the only areas where tilapia is a priority commodity) is
presented in Annexes 1 to 3 while specific approaches for each province are indicated in Table 29.
Input Provision
1. Development and promotion of climate smart hatchery technologies
Poor broodstock productivity owing to low fecundity and asynchronous spawning cycles due to
climate change is one of the significant constraints to commercial tilapia production and its future
expansion. The focus of this intervention is to promote technologies to address problems in fry
production associated with climatic variations. The following are the proposed approaches under
this strategy:
a) Participatory R and D with hatcheries on climate resilient strains and climate smart technologies
and its dissemination
Scientific research and technology development can play a strong role to support hatchery
operators in developing and implementing adaptation measures to predicted future climate
change. The aim of the R and D is to identify climate resilient strains and develop location
specific climate smart production protocols and technology. To promote ownership of the R and
D results, it is suggested that R and D be conducted in close collaboration with hatchery
operators.
b) Development of capacity of hatchery cooperatives and associations to provide technical support

to members and commercial distribution of low-cost tools and equipment
To facilitate widespread dissemination of the technologies, it is important to build capacities of

government and private sector providers especially hatchery cooperatives and associations to
provide technical support to their members. It may also be possible for cooperatives and
associations to engage in the distribution of low-cost tools and equipment (e.g., Secchi disk,
water quality test kits, and materials for shading) needed to carry out the upgrading of hatchery

operations. There is also a need to support the development of business models appropriate to
purchasing abilities of hatchery operators.
c) Support upgrading of strategic hatcheries in key tilapia producing areas to serve as models and
venues for learning
It is not realistic to expect hatchery operators to take up new or enhanced methods and
processes unless they have been thoroughly convinced that the risk factors with which they have
had to struggle have been properly assessed and locally proven (in terms of increased fry
production). As such, it is oftentimes important to demonstrate the financial viability of the
improved production technologies using a select group of hatchery operators. It is suggested
that upgrading support be provided to strategic hatcheries (e.g., role models among hatchery
operators, significant scale of operation, innovator and progressive thinker) to showcase site
specific climate change adaptation measures. The ‘model climate smart hatcheries’ can also
serve as venues for hands-on training.
d) Support the establishment of farmer cooperative owned hatcheries in Ilocos Region to augment
supply of fries and to serve as showcase of climate smart technologies
This intervention is specific to Ilocos Region to augment existing fry production capacity. This
will involve the establishment of cooperative owned hatcheries in areas where there is a critical
mass of tilapia farmers. At the outset, hatcheries and its production systems should already be
climate resilient so as to maximize the performance of genetically selected strains.
2. Development of commercial production and distribution of bigger sized fingerlings (at least
sizes 10 and 14)
This intervention is aimed at providing tilapia farmers with an alternative to the lengthy full grow-
out approach which is viable for production for domestic requirements but poses profitability
constraints when requirements call for bigger sized fish. An alternative system is the two-phase
grow-out consisting of the following distinct phases operated separate of each other and with each
phase as stand-alone enterprises:
 Nursery Enterprise: rearing of size 22 – 24 fries to size 10 – 14 or bigger fingerlings

 Grow-out phase: grow-out of size 10 – 14 or bigger fingerlings to marketable size
To promote the adoption of the two-phase grow-out, it is necessary to develop nursery enterprises.
Specific approaches proposed under this strategy are the following:
a) Establishment of pilot nursery enterprises (freshwater pond, brackishwater pond, and cage)
including development of capacity of operators to provide technical advice to clients
b) Set-up of model grow-out farms to assess profitability and viability and demonstrate advantages
of using nursery reared bigger sized fingerlings
With a two-phase grow-out, farmers can shorten the growing period by stocking with larger size
fingerlings. The adoption of a two-phase grow-out will also improve climate change resiliency of
farmers. With shorter culture period, risks of exposure to natural calamities as well as other hazards
like abrupt water quality problems which may result in fish kills are reduced. Likewise, among
farmers dependent on irrigation water, stocking of larger size fingerlings will make their production
cycles more closely aligned to water availability. Production cost is reduced since shorter growing

period also means less feeds used. Almost 75% of the feed is in the grower and finisher stage. At an
average of 3 bags per day consumption, one month reduction in the growing period translates to a
total savings of 90 bags of feeds! With a faster turnover the number of crops per year can also be
increased. The two-phase grow-out is also commonly used in fillet producing countries to produce
800 to 1000 gram tilapia.
3. Build capacity of farmers to produce low-cost nutritious feed to complement commercial feed
and adopt cost-reducing feeding strategies
Feeds constitute the largest proportion of a tilapia farmer’s overall costs. The possibility of achieving
higher returns on investment would be greater if farmers adopted cost-saving strategies to minimize
feed costs. Likewise, the high cost of feeds has deterred many farmers from producing tilapia bigger
than 250 grams. Farmers claim that it is not profitable. This intervention in conjunction with use of
larger size fingerlings and GAqP is aimed at enhancing the cost-effectiveness of producing tilapia in
Luzon A Cluster. The following are the proposed intervention approaches:
a) Establishment of village level feed production enterprise including development of capacity of

operators to provide technical advice and training on proper feed management
This will involve the set-up of village level enterprises to process crop and livestock by products
into nutritious tilapia feed. In the long run, this approach is likely to be more practical and
sustainable than on-farm formulation by individual farmers. This will also create local
employment and provide an alternative market for locally grown crop. Waste (e.g., fish offal)
from fillet production that cannot be transformed into marketable by-products can also be used
as feeds.
Promotion of the use of locally formulated feeds must be complemented with extension services
to facilitate dissemination of reduced feeding strategies developed by CLSU and the AquaFish
project as well as adoption of proper feed management practices. Proper feeding will not only
contribute to improving farm profitability but also to reducing risks of water quality
deterioration due to excess feeds.
b) Set-up of demonstration farms to showcase cost-reducing feeding strategies and the efficacy of
locally produced feed.
Following the “to see is to believe” mentality prevalent among many farmers, on-farm
demonstration and evaluation of feed performance is most effective. Likewise, the
demonstration farms can also serve as venue for training.
c) Development of capacity of cooperatives to undertake collective procurement of commercial

feeds for retail selling to members at affordable scheme
Discounts from feed companies are usually based on volume. As such, collective marketing will
not only lower cost of transaction but will also enable farmers to purchase commercial feeds at a
lower price than prevailing retail prices. Likewise, cooperatives are more likely to be granted a
credit line than individual small farmers. This will also facilitate access of farmers to more in-
depth technical assistance from feed companies. Feed companies generally prioritize high
volume clients for technical assistance.

Farming
4. Improvement of access of farmers to services that will enable them to better cope with effects
of climate change and improve farm productivity
This intervention is aimed at helping farmers to effectively cope with the challenges of building up
climate change resilience and achieving sustainable growth by facilitating their access to a range of
services that will enable them to make judicious use of their existing assets and generate new assets
to grow their businesses. Specific approaches proposed under this intervention strategy are the
following:
a) Development of a pool of providers consisting of progressive farmer leaders to complement

government extension services
Aquaculture has significant environmental dimension. Different aquaculture practices can either
harm or contribute to aspects of the environment such as biodiversity, the climate, soil, and
water. Tilapia farmers are both affected by and contribute to climate change and environmental
degradation. Sustainable farming practices and GAP can turn these challenges into areas for
growth.
In line with the focus to ensure that technological advances reach the farmers in the most
efficient and effective way, it is proposed that project makes use of indigenous and community-
based learning structures, capitalize on the knowledge of progressive farmers and relevant
external knowledge of public and private aqua-technicians. Diversity of extension provision,
from government extension officers to community-based and value chain-based providers (e.g.,
traders, lead farmers, cooperatives), will give farmers greater choice of sources of information,
knowledge, and skills to support the long-term sustainability of their farming. Working with a
wide range of providers will also translate into higher outreach and having a wide variety of
services developed in the market from which farmers can choose.
To minimize risk of abandonment of change process by the farmers, it is important to start with
quick wins and to use a building block approach. New technologies must be designed to fit the
ecological environment as well as farmers’ resource mix, risk profiles, and scale of operation.
Likewise, the participation of key players (from farmers to buyers) in the development of
modules can foster ownership and ensure its relevance and appropriateness to local context and
market requirements.
b) Establishment of demo farms as venues for training and development of site-specific guidelines
on GAqP and sustainable farming
Capacity building of potential providers (e.g. progressive farmers within the community) may
include support in the establishment of demonstration plots which can facilitate the
development of site-specific guidelines on GAqP and sustainable farming. The demonstration
plots can also be used as venues for hands-on that can also be used as venues for hands-on
learning. Demonstration plots that mirror the conditions that farmers actually face can be
powerful tools to initiate and incentivize change.

c) Support the establishment of community-based system for monitoring water and weather
conditions in relation to tilapia farming
It is also proposed that project supports the establishment of community-based system to

monitor sea and weather conditions in relation to tilapia farming. Monitoring of water and
weather conditions in relation to tilapia growth would enable producers to take preventive
actions to reduce production losses from warm water, low salinity, high winds, and other
weather related issues. This would require the assistance of BFAR and PAGASA.
d) Development of weather index-based insurance for tilapia farming
It is also suggested that project work with the Philippine Crop Insurance Corporation (PCIC) and
the LGUs in the development of weather index-based insurance (WII) for tilapia farming. The
weather index-based insurance has the following potentials: i) the farmer will not need to file a
claim from the insurer and wait for the insurance adjuster’s assessment before a payout is
claimed, as it is the trigger that will determine the payout; ii) WII shortens the claims process,
reduces transaction costs, minimizes adverse selection, and addresses the associated
reputational or moral risks that have hounded traditional multi-peril indemnification. Farmers,
meanwhile– particularly smallholder farmers who have limited means to travel to town centers
to file and follow-up the processing of insurance are assured of an immediate payout provided
that the weather index is breached. In the context of a weather-related calamity, a timely
payout can provide a respite for smallholder farmers and their families (Oxfam, 2012).
5. Strengthen environmental management system of tilapia farming communities especially

those in low-lying areas
During the consultations, a key intervention proposed by farmers is the dredging of the rivers.
Further discussions indicate that practices within the community have also contributed to higher
incidence and severity of flooding in low lying areas. As such, the following interventions are
proposed:
a) Support the development of proposal to pertinent agencies on the declogging of water channels
and establishment of flood control measures
b) Support upgrading of drainage and environmental management systems of tilapia farming

communities within the context of participatory action research in the development of flood
mitigation measures for fishponds in low lying areas
Solution to flooding will require cooperation and coordination among BFAR, the Department of
Environment and Natural Resources (DENR), the Department of Public Works and Highways (DPWH),
and local government units (LGUs) as the frontline agencies mandated with the primary
management and jurisdiction over the country’s environment.

Postharvest/Marketing
6. Establishment of GMP compliant common service facilities for harvest collection, depuration,
sorting, intermediate processing, trading, and transportation (with aerator)
Objective of this intervention is to facilitate access of farmers to facilities that will enable them to
engage in collective marketing and address quality and food safety constraints such as “off-flavor”,
“muddy taste”, and unhygienic handling which can result to quality deterioration. Access to GMP
compliant postharvest and marketing infrastructure ad technology will maximize harvest value and
ensure that fish reach markets in good condition and obtain the best available price. It is also
proposed that intervention should include the development of local capacity to provide training on
proper postharvest handling including depuration to ensure that fish have no “muddy taste” and
“off-flavor”
Interfirm Relationship
7. Development of capacity of farmers to incrementally associate, collaborate, and coordinate to

achieve economies of scale in their transactions and to become attractive partners to
processors and feed companies
Individual farmer surpluses are small and the organization of smallholders to create a critical mass of
produce is a necessary pre-condition for improving market access. By putting together their harvest,
they can attract the attention of the buyers and also bargain for a better price for the produce.
Likewise, through collective marketing, they can potentially save on transportation costs and time.
Cooperatives are ideal intermediaries to provide market access for small farmers and, linking
upstream producers with downstream market players. If farmers jointly bought their fingerlings and
feeds together, they will not only present a sizeable demand to encourage suppliers to sell to them,
but also make it possible to bargain to procure the inputs at a cheaper price. Strong and well
managed farmer cooperatives also give members a structure and an organization with which to
resolve many of the constraints they face in improving their livelihoods as well as an opportunity to
act on market opportunities they identify. The promotion of collective action is an important
strategy for increased smallholder participation in the tilapia industry. Likewise, collective
enterprises can also provide the platform for the promotion of value addition. Thrust of PRDP’s
support may be directed to assisting farmer groups to engage in communal business oriented
activities that would allow them to take on additional functions in the chain such as nursery
operations, communal farming, collective procurement and marketing.
In Ilocos Region where cooperation among and between farmers is weak, PRDP can pursue the
incremental promotion of horizontal collaboration initiatives starting with relationship-building cum
learning events such as organizational development sessions, festivals and competitions, and village
level training to strengthen structures geared towards collective ventures with a focus on setting
basic parameters/standards for participation. It is also important to facilitate the development of
shared leadership in the communities. Likewise, it is best to start with low-risk low-cost collective
initiatives so as not to overwhelm farmers especially if they are not used to working in formal
organizational structure.

Table 29 . Summary of Constraints/Opportunities and Interventions
Constraints/Opportunities Province Intervention Strategy and Approach Who Can Do It?
Public Private
INPUT PROVISION
Erratic and low productivity of Ilocos Regio Development and promotion of climate smart DA/PRDP Hatchery
Pangasinan (1 to 4) Technical and financial Cooperatives
hatcheries due to effects of hatchery technologies
La Union (1 to 4) assistance Participatory action
climate change resulting to lack of
supply of fries and fingerlings (1) Participatory R and D with hatcheries on research
Cagayan Valley
BFAR/SEAFDEC/PCAARD/ Capacity building
during stocking periods Isabela/Santiago City climate resilient strains and climate smart
(1 to 3) Tilapia Science
technologies and its dissemination/ Center/CLSU Private hatcheries
Central Luzon R and D Equity – upgrading
Lack of know-how, skills, and Nueva Ecija (1 to 3) (2) Development of capacity of hatchery Technical assistance investment
resources to implement climate Pampanga (1 to 3) cooperatives and associations to provide Capacity building
smart hatchery production technical support to members and
systems commercial distribution of low-cost tools and PLGU/MLGU
equipment Follow through
Existing production capacity of assistance
hatcheries not sufficient to meet (3) Support upgrading of strategic hatcheries in
local requirements (Ilocos Region) key tilapia producing areas to serve as
models and venues for learning
Opportunity
(4) Support the establishment of farmer
On-time access to good quality cooperative owned hatcheries in Ilocos
fries and fingerlings can improve Region to augment supply of fries and to
profitability of grow-out farms serve as showcase of climate smart
technologies
High mortality rate of CAR Development of commercial production and DA/PRDP Cooperatives
Ifugao (1 to 2) Technical and financial Management and
fries/Declining survival rate due distribution of bigger sized fingerlings (at least
Benguet (1 to 2) assistance operations of
to increasing use of very small sizes 10 and 14)
seeds nurseries and grow-
Ilocos Region
BFAR/SEAFDEC/PCAARD/ out demo farms
Ilocos Sur (1 to 2) (1) Establishment of pilot nursery enterprises

Public Private
No supply chain for bigger sized Pangasinan (1 to 2) (freshwater pond, brackishwater pond, and Tilapia Science
seeds (fingerlings stage) cage) including development of capacity of Center/CLSU Feed Companies
Cagayan Valley R and D Technical assistance
Cagayan (1 to 2) operators to provide technical advice to
Lack of capacity to grow tilapia clients Technical assistance – nurseries
Capacity building Feed support for
profitably at the size and weight (1 to 2)
Nueva Vizcaya (1 to nurseries
required by the processors, (2) Set-up of model grow-out farms to assess PLGU/MLGU Promotion
2)
institutional market, and export profitability and viability and demonstrate Area for nursery
market Central Luzon advantages of using nursery reared bigger enterprises
Bulacan (1 tp 2) sized fingerlings Follow through
Opportunity Nueva Ecija (1 to 2) assistance
Pampanga (1 to 2) Monitoring and
Stocking of bigger sized seeds documentation
(e.g., size 10 and 14) will improve Promotion campaign
survival rate and can potentially
enable farmers to grow tilapia at
the size and weight required by
fillet processors at a shorter
period than 8 months
Growing demand for 500 grams

and above tilapia from
institutional buyers and the
export market
Lack of financial capacity to pay CAR Build capacity of farmers to produce low-cost DA/PRDP Cooperatives
Abra (1 to 2) Technical and financial Management and
for feeds outright nutritious feed to complement commercial feed
Ifugao (1 to 3) assistance operations of feed
Benguet (1 to 3) and adopt cost-reducing feeding strategies
Rising cost of feeds enterprise
BFAR/SEAFDEC/PCAARD/ Capacity building
Ilocos Region (1) Establishment of village level feed
Ilocos Norte (1 to 2) Tilapia Science

Public Private
Lack of know-how on proper feed Ilocos Sur (1 to 2) production enterprise including development Center/CLSU
management/efficient cost-saving La Union (1 to 2) of capacity of operators to provide technical R and D
Pangasinan (1 to 3) Technical assistance
feeding strategies advice and training on proper feed
management Capacity building
Cagayan Valley
Opportunities Cagayan (1 to 2)
Isabela/Santiago City PLGU/MLGU
(2) Set-up of demonstration farms to showcase Follow through
(1 to 3)
Improvements to feed Nueva Vizcaya (1 to
cost-reducing feeding strategies and the assistance
management and procurement 2) efficacy of locally produced feed. Monitoring and
strategies can help farmers documentation
reduce cost Central Luzon (3) Development of capacity of cooperatives to Promotion campaign
Bulacan (1 to 3)
undertake collective procurement of
Nueva Ecija (1 to 3)
Existing technologies, ranging Pampanga (1 to 3) commercial feeds for retail selling to
from the formulation of farm- members at affordable scheme
based feeds to the use of efficient
fertilization and feeding strategies
are currently available.
Feed companies offer credit

line/Contract growing with
processors can facilitate access
to feeds and other inputs
Collective procurement/bulk
buying can reduce cost of
feeds and improve bargaining
power

Public Private
FARMING
Limited outreach of existing CAR Improvement of access of farmers to services that DA/PRDP Cooperatives
extension services and providers Abra (1 to 4) will enable them to better cope with effects of Technical and financial Management and
Ifugao (1 to 4) assistance operations of demo
Benguet (1 to 4) climate change and improve farm productivity
Low uptake and adoption of good farms
agricultural practices and BFAR/SEAFDEC/PCAARD/ Capacity building
Ilocos Region (1) Development of a pool of providers
sustainable production practices Ilocos Norte (1 to 4) Tilapia Science Weather information
consisting of progressive farmer leaders to Center/CLSU system and water
Ilocos Sur (1 to 4)
complement government extension services Technical assistance quality monitoring
Lack of capacity to comply with La Union (1 to 4)
certification requirements Pangasinan (1 to 4) Capacity building services
(2) Establishment of demo farms as venues for
Cagayan Valley training and development of site-specific PLGU/MLGU
Lack of know-how, skills, and Cagayan (1 to 4) guidelines on GAqP and sustainable farming Follow through
resources to implement climate Isabela/Santiago City
assistance
smart tilapia farming (1 to 4)
(3) Support the establishment of community- Monitoring and
Nueva Vizcaya (1 to
4) based system for monitoring water and documentation
Opportunity
weather conditions in relation to tilapia
Central Luzon Pag-asa
farming
Good agronomic practices and Bulacan (1 to 4) Technical assistance
sustainable farming practices can Nueva Ecija (1 to 4) Capacity building
Pampanga (1 to 4) (4) Development of weather index-based
reduce incidence of diseases and
insurance for tilapia farming PCIC
improve resilience to climate
change resulting to overall Crop insurance
increase in survival rate,
productivity, and better market
access.
GAP certification required to

Public Private
access export markets. This can
potentially provide incentives to
adopt good practices.
Vulnerability to flooding due to Central Luzon Strengthen environmental management system of DA/PRDP Cooperatives
clogged river channels, creeks, Pampanga tilapia farming communities especially those in Technical and financial Capacity building
and canals low-lying areas assistance Coordination
Proposal
BFAR/SEAFDEC development
Poor drainage system of some (1) Support the development of proposal to
Technical assistance
fishpond/ Weak environmental pertinent agencies on the declogging of Capacity building
management water channels and establishment of flood
control measures PLGU/MLGU
Proposal development
(2) Support upgrading of drainage and Focal point in upgrading
environmental management systems of of environmental
tilapia farming communities within the management system
context of participatory action research in
the development of flood mitigation DENR/DPWH
measures for fishponds in low lying areas Technical assistance
Financial support
Capacity building
POSTHARVEST/MARKETING
Lack of access to resources and CAR Establishment of GMP compliant common service DA/PRDP Cooperatives
Benguet Technical and financial Management and
facilities that will enable facilities for harvest collection, depuration,
cooperatives to engage in sorting, intermediate processing, trading, and assistance operation of
Ilocos Regio
collective marketing transportation (with aerator) common service
Pangasinan
BFAR facilities
Cagayan Valley Technical assistance Capacity building
Individual marketing resulting to (1) Set-up of common service facilities including Capacity building
low bargaining power development of core group of local experts Market development

Public Private
Central Luzon to provide technical advice on proper PLGU/MLGU
High cost of transactions incurred Pampanga harvesting and fish handling Market development
by buyers in collecting small Organizational
volume of harvests resulting to development support
exclusion of small farmers
Poor Farm to Market Roads Central Luzon Construction/Rehabilitation of Farm to

Pampanga DA/PRDP
Market Roads Technical and financial
Opportunity assistance
Collective marketing will facilitate

access to bigger markets, improve
bargaining position of farmers,
and reduce cost of marketing
INTERFIRM RELATIONSHIP
Low bargaining power CAR Development of capacity of farmers to incrementally DA/PRDP
Abra associate, collaborate, and coordinate to achieve Technical and financial
Ifugao economies of scale in their transactions and to become assistance
Lack of organized groups Benguet
Opportunity attractive partners to processors and feed companies
Farmers in the same village know Ilocos Region BFAR/LGU
Ilocos Norte (1) Organizational development support to farmers Organizational
each other quite well and have complemented with entrepreneurial skills
Ilocos Sur development support
had experiences of working La Union development
together. Such ‘natural–social Pangasinan
constituents’ can be harnessed to Cagayan Valley (2) Support to groups to start low risk collective
get them to work together Cagayan activities that provide quick wins and tangible
Isabela/Santiago City benefits (self and group)
Nueva Vizcaya
Processors are more inclined to Central Luzon

Public Private
work with commercial scale farms Bulacan
Nueva Ecija
Pampanga
Feed suppliers are more inclined
to support commercial scale
farms

Section 9:
CONCLUSIONS AND RECOMMENDATIONS
1. Given that the Philippines is already more than 100% self-sufficient in tilapia and with surplus of
41,403.12 MT in 2013, development initiatives should focus towards meeting export market
requirements parallel to strengthening capacity of small scale fish farmers to shift from
household consumption subsistence production to sustainable market oriented commercial
production. The two-thronged approach is needed to ensure that export development will not
compromise fish food security of the country.
2. Innovations are needed in the grow-out system if Luzon A Cluster wants to penetrate the export
market particularly the whole and fillet market segments. Key solutions that have been put
forward towards enabling the industry to profitably rear large size tilapia are the following:
 Selection of strain with a better body conformation to increase fillet yield

 Stocking of larger size fingerlings and adoption of two-phase grow-out system
 Adoption and implementation of cost-reducing feeding strategies including
collective production of own feeds using local ingredients
 Promotion of economies of scale through collective action
Judicious utilization of waste from fillet production should also be promoted. Tilapia skin, for
example, can be manufactured into leatherwoods in addition to the “tilapia chicharon”. Another
important by-product is collagen collected from the inside of skins. Several countries in Europe
have turned to tilapia and other fish skins to replace mammalian collagen sources due to
concerns over Bovine Spongiform Encephalopathy (BSE) or Mad Cow disease. Apparently, the
fish collagen can be used for preparation of time release capsules for various medicines. Skins
are collected and stored in frozen blocks or salted and stored.
3. Demand for tilapia continues to grow but future growth will be driven largely by market
requirements. Consumers are becoming more quality conscious and demanding. Issues such as
socially and environmentally responsible aquaculture practices, food safety, traceability,
certification and eco-labelling are becoming increasingly important. Aside from facilitating
access to extension services to enable farmers to align practices to GAqP and sustainable
aquaculture practices, it is also important to provide them access to GMP compliant postharvest
and marketing infrastructure facilities. There is also the need to promote depuration to ensure
that fish have no off-flavor. This may also help in further developing domestic demand.
4. With climate change inevitable, investment in climate smart infrastructure and technologies are
imperative. Monitoring of water quality is very important to assess and manage the risk
associated with climate change impact and consequent stress. As such, access to simple water
monitoring tools and technology would reduce risk of farmers.

ANNEXES

Annex 1:
Prioritization of Interventions – Ilocos Region
Note:
Prioritization workshops conducted only with provinces which had tilapia as their priority commodity
Prioritization and Ranking of Constraints and Intervention

Intervention Strategy La Union Pangasinan
Development and promotion of climate smart 1 1
hatchery technologies
Development of commercial production and 5 2
distribution of bigger sized fingerlings (at least
sizes 10 and 14)
Build capacity of farmers to produce low-cost 6 6
nutritious feed to complement commercial
feed and adopt cost-reducing feeding strategies
Improvement of access of farmers to services 2 3
that will enable them to better cope with
effects of climate change and improve farm
productivity
Strengthen environmental management system
of tilapia farming communities especially those
in low-lying areas
Establishment of GMP compliant common 3 4
service facilities for harvest collection,
depuration, sorting, intermediate processing,
trading, and transportation (with aerator)
Development of capacity of farmers to 4 5
incrementally associate, collaborate, and
coordinate to achieve economies of scale in
their transactions and to become attractive
partners to processors and feed companies

Annex 2:
Prioritization of Interventions – Cagayan Valley
Note:

Intervention Strategy Isabela Santiago City
sizes 10 and 14)
productivity
Strengthen environmental management system
in low-lying areas

Annex 3:
Prioritization of Interventions – Central Luzon
Note:

Intervention Strategy Nueva Ecija Pampanga
sizes 10 and 14)
productivity
Strengthen environmental management system 6
in low-lying areas

Annex 4:
Industry Data – CAR
Data on Fishpond
Province No. of Operators Area (hectares)
Abra 605 26.82
Apayao 759 31.67
Benguet 820 9.09
Ifugao 102 67.23
Kalinga 706 40.61
Mt. Province 855 8.73
Total 4.047 184.15
Source: BFAR 2011 Annual Report
Data on Fish Cage

Province No. of Operators Area (hectares)
Benguet 77 5.28
Ifugao 455 31.00
Mt. Province 11 1.10
Total 543 37.38
Source: BFAR 2011 Annual Report

Annex 5:
Industry Data – Ilocos Region
Production Capacity of Hatcheries

Government 8.347 M per year (2013
Private (18) 1.8 M (Ilocos Norte)
2.5 M (Ilocos Sur)
0.1 M (La Union)
? M (Pangasinan)
4.4 M (Total)
Total Capacity 12.747 M
Requirements 85,191,200
Gap 72,444,200
Source: BFAR – Region 1
Data on Grow-out Farms

Culture System Area (ha.) Fingerlings Requirement
Fishpond 1,025.69 41,027,600
Fish Cafe 4.8786 1,463,580
Fish pen 1.0442 104,420
Total (for one cropping) 1,031.61 42,595,600
Total for 2 croppings 85,191,200
Source: BFAR – Region 1

Annex 6:
Industry Data – Cagayan Valley
LGU Operated Hatcheries

Province/Area Farm Location Species
CAGAYAN
Lal-lo Freshwater Fish Farm Lal-lo tilapia/carp
Sta. Ana Fish Farm Sta. Ana tilapia/carp
Tuguegarao Municipal Hatchery Dadda, Tuguegarao City tilapia
ISABELA
Santiago City Hatchery Santiago City tilapia/carp
San Pablo Municipal Hatchery San Pablo tilapia/carp
Echague Municipal Hatchery Echague tilapia/carp
Ramon Municipal Hatchery Ramon tilapia
QUIRINO
PEDAI Palacian Aglipay tilapia/carp
Quirino Provincial Fishery Station Diffun tilapia/carp
Diffun Municipal Hatchery Diffun tilapia/carp
NUEVA VIZCAYA
Bambang Municipal Hatchery Bambang tilapia/carp
Alfonso Castaneda Municipal Hatchery Alfonso Castaneda tilapia/carp
Aritao Municipal Hatchery Aritao tilapia/carp
Nueva Vizcaya Prov'l fishery Station Bayombong tilapia/carp
Polloc Fish Farm Solano tilapia/carp
Source: BFAR Region 2

Annex 7:
Industry Data – Central Luzon
Data on Fishpond
MUNICIPALITY FISHPOND AREA OPERATORS ANNUAL
(Hectare) PRODUCTION (MT)
Macabebe 7,969.69 1116 52,325.19
Sasmuan 3,712.51 444 25987.56
Minalin 3044.42 948 20,295.38
Lubao 2647.51 373 18535.30
Masantol 1887.00 942 13209.00
Guagua 1240.30 364 8099.28
Candaba 726.00 296 3630.00
San Luis 504 203 2520
Santa Ana 411.50 290 2057.50
Santo Tomas 344 63 2408
Apalit 309 156 1545
Magalang 279.51 298 1397.55
Arayat 151.50 47 757.50
Mexico 131.80 65 659.00
Porac 85.77 65 428.85
San Simon 63.30 54 316.50
City of San Fernando 58.30 47 291.50
Santa Rita 29.86 20 149.30
Floridablanca 29.70 25 148.50
Mabalacat 24.69 51 123.45
Angeles City 0 0 0
Bacolor 0 0 0
Source: LGU/BFAR

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PHILIPPINE RURAL

VALUE CHAIN ANALYSIS AND

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No. Title Page

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ASC Aquaculture Stewardship Council

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a) Adoption and implementation of climate smart hatchery/fry production system

b) Establishment of nursery enterprises to produce bigger sized fingerlings

e) Strengthening of environmental management system in low lying areas in Pampanga

g) Improvement of horizontal collaboration especially among farmers

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A. BACKGROUND INFORMATION AND RATIONALE 1

 At least, 5% increase in annual real household incomes of farmer beneficiaries; 30%

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B. OBJECTIVES OF THE VCA

c) Under a participatory process, identify and prioritize interventions needed to overcome

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 Context of key informants and FGD participants

 Third party observations (e.g., government agencies, providers, VC facilitators with

 Experiences of other tilapia producing countries

 Past assessment studies of the Philippine tilapia industry

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Table 1 . Major Tilapia Products in International Trade and Main Suppliers.

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In Latin America, tilapia

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Table 2 . World Production of Tilapia, 2009 to 2013

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Table 3 . Tilapia Production in the Philippines, 2009 to 2013

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Table 4 . Breakdown of Tilapia Production in the Philippines by Culture Environment and

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Table 5. Tilapia Production in CAR, 2009 to 2013

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Table 6. Breakdown of CAR Tilapia Production by Culture System, 2013

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BFAR-CAR has also developed

Although not reflected in

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Table 7 . Tilapia Production in Ilocos Region, 2009 to 2013

Table 8 . Breakdown of Tilapia Production in Ilocos Region by Culture System, 2013

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Table 9 . Tilapia Production in Cagayan Valley, 2009 to 2013

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Table 10 . Breakdown of Tilapia Production in Cagayan Valley by Culture System, 2013