Although milk has been produced and processed in the Philippines for a long time, the country does not have a strong dairy tradition. Climate and ecology are not very favourable for high yields. Moreover, policies have been erratic and the country has not used the momentum towards dairy development like some of its neighbours. This report reviews the current state of the dairy sector, with a view to developing visions for the future. Dairy sector fragmentation is partly due to the fact that the country is an archipelago with different ecological and demographic conditions - good markets and favourable ecology often do not come together. The report analyses selected aspects of production systems, value chains, and management, particularly focusing on roles of public and private sector. The country should a) consider its variation as strength and not as weakness and b) focus (use of its public) resources for development of a dairy sector that mainly produces local milk for local markets, rather than trying to become self-sufficient in milk products that can be imported much more cheaply. The country has much to gain from taking development of its dairy sector seriously. Government should become a facilitator, rather than being directly in charge of services like cattle imports, insemination services, and research & education.