Philippines - Agricultural Sectors Philippines - Agricultural Sectors
The U.S. continues to be the Philippines’ number one supplier of agricultural products, and the Philippines is its tenth largest market in the world. Due to a sharp decline in commodity prices and the strong U.S. dollar, export sales dropped 15 percent to $2.3 billion while volume remained at the same level compared to last year. Competition is intensifying and new challenges are emerging for U.S. exporters due to bilateral and regional free-trade agreements.
General Market Profile
Large population: 100,998,376 (July 2015 estimate based on The World Factbook)
Income: 10-15 million “real customers”
Urban population: 49 percent
High literacy: 90 percent of the 67 million Filipinos between the age of 10 to 64 years old are functionally literate (can read, write, compute and comprehend)
High awareness & preference for U.S. f&b products
Growing demand for “healthy,” organic, gourmet and convenience foods
Steady growth in retail, foodservice and food processing industries
Sub-Sector Best Prospects
Food Retail Sector
The Philippine food retail sector continues to modernize and expand, fostering steady sales of a wide range of U.S. food and beverage (f&b) products. Supermarket chains are opening large, Western-style stores in Metro Manila, Cebu, Davao and other key provincial cities including Bacolod, Cagayan de Oro and Iloilo. This expansion is driven by the continued economic growth, which has led to a boom in consumer spending. Markets continue to be dominated by national chains, due to investment regulations that limit ownership by foreign investors. Rapid growth in retail sales are creating new opportunities for imported food & beverage products, with many U.S. brands already widely recognized by Philippine consumers.
The proliferation of modern convenience stores such as 7-Eleven, Mini-Stop and Mighty Mart are partly due to the bullish business process outsourcing (BPO) sector that operates around the clock. Products that can be classified as “convenient,” sweet and savory snack food products, meal-replacements and ready-to-drink beverages are in strong demand.
Food Service Sector
The Philippine foodservice sector continues to grow driven by the robust economy, growing disposable income among the upper and middle class, proliferation of retail shopping centers and hotels, steady influx of tourists, rapid growth of the BPO sector, and increase in number of women joining the workforce. Dining out continues to be an important aspect of Filipino family bonding and celebration.
Restaurants in five-star hotels and upscale malls, fast-food chains, cafes and Western-style diners require high-quality f&b products such as meats, poultry, seafood, dairy products, processed fruits & vegetables, fruit juices, dried fruits, nuts, wines and craft beers. Restaurant operators are keen on introducing new and exciting menu offerings to attract customers.
Food Processing Sector
The Philippines’ rapidly expanding production of processed foods and beverages presents robust opportunities for U.S. exporters of agricultural raw materials and high value ingredients.
In 2014, the f&b processing industry’s gross value added output increased 13 percent over the previous year and reached $28.4 billion. Roughly 90 percent of the Philippine f&b processing industry’s output is consumed domestically, with excellent growth prospects stemming from the country’s resilient economy and strong consumer base. In addition, as quality and efficiency continue to improve, the Philippines will be in a position to exploit export opportunities due to its strategic location and membership in various free trade agreements.
Export Growth of High-Value Food & Beverage Products
The Philippines continues to be the largest export market in Southeast Asia and one of the fastest growing markets in the world for U.S. high-value f&b products. Despite a 19 percent drop in export sales of top products including dairy, pork and prepared food in 2015, traders remain optimistic and expect sales of U.S. f&b products to the Philippines will rebound to $1.1 billion by the end of 2016. U.S. f&b products remain the best prospects for future growth due to the robust Philippine economy, steady growth in the country’s retail, foodservice and food processing sectors, and consumer familiarity with American brands.
The following detailed reports are available through the FAS homepage at www.fas.usda.gov:
Food and Agricultural Import Regulations and Standards (FAIRS)
Philippine Food Retail-A Growing Opportunity for U.S. F&B
Philippines: HRI Food Service Sector
Prospects for U.S. Ingredients in Flourishing Philippine Food Processing Industry
Foreign Agricultural Service, Philippines Contact Information:
USDA-FAS at the U.S. Embassy in Manila is ready to help exporters of U.S. agricultural products achieve their objectives in the Philippines. For further information or assistance, please contact:
U.S. Department of Agriculture
Foreign Agricultural Service
Embassy of the United States of America
1201 Roxas Boulevard
Trunk Line: (632) 301-2000