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Market Overview – Philippines

June 2019

Market snapshot

The Philippines are a congregation of eleven large islands with a population of 107 million in 2018. The population is expected to reach 125 million by 2030. It is a large market as indicated by its increasing population.

The Philippines had a gross domestic product (GDP) of US$331.7 billion in 2018 an increase from US$313.6 billion in 2017. It is one of the fastest growing Asian economies with a 6.3% GDP growth in 2018.

The Philippines are a net importer of agri-food and seafood products with total exports of US$7.2 billion in 2018, a decrease of 1.2% from 2017. Total imports were US$13.5 billion, an increase of 11.8% from 2017.

Canada was the Philippines' thirteenth largest supplier of agri-food and seafood products in 2018, with a 2.1% market share, representing an increase of 21.4% from 2017. Canada's agri-food and seafood exports to the Philippines were valued at US$285.2 million, where Canada exported wheat, frozen poultry offal and frozen pork.

The Philippines' processed food and beverage imports were valued at US$9.5 billion in 2018 with Canada's share at 1.9%. Packaged food retail sales were valued at US$11.7 billion and are anticipated to reach US$15.8 billion by 2023.

The health and wellness sector grew by a compound annual growth rate (CAGR) of 7.3% from 2014 to 2018 and is expected to grow by a rate of 5.6% over the 2019–2023 period.

Production

The production list below indicates the top crops and livestock produced in the Philippines that are also produced in Canada. Maize is the Philippines' largest domestic crop, with production at 7.9 million tonnes in 2017. It has also experienced a production increase by a CAGR of 1.8% between 2013 to 2017. Within the Philippines' top ten crops listed, dry onions, have recorded the largest production at a CAGR of 8.3%. Pumpkins, squash and gourds (−2.0%) and cabbages and other brassicas (−1.0%) have reported negative growth rates during the same period.

Chicken production grew by 3.3% from 2013 to 2017 the highest rate for all live animals, and pig, cattle and buffalo production increased by 2.2%, 1.5% and 0.7%, respectively. Pork and chicken meat are the two most significant when it comes to meat production as they are the only ones over a million tonnes. All the top 4 livestock types have grown in amounts per head. Chicken has had the largest growth per head at a CAGR of 1.8% followed closely by ducks becoming more popular at a CAGR of 1.7%

Crop production in the Philippines 2013-2017, Top 10 crops that are produced in Canada as well
Top 10 crops ('000 tonnes) 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Maize 7,377.3 7,770.6 7,518.8 7,218.8 7,914.9 1.8
Vegetables, fresh NES[1] 5,000.0 4,939.1 4,986.6 5,034.6 5,076.0 0.4
Pumpkins, squash and gourds 312.0 305.4 300.6 294.1 287.4 −2.0
Fruit, fresh NES[1] 239.9 239.7 246.3 248.4 251.8 1.2
Tomatoes 207.7 214.6 214.8 210.7 218.8 1.3
Onions, dry 134.2 203.7 181.2 122.6 184.4 8.3
Watermelons 130.0 131.5 148.0 143.9 147.3 3.2
Cabbages and other brassicas 127.5 128.0 125.8 123.1 122.5 −1.0
Potatoes 117.7 119.1 118.5 116.8 117.6 0.0
Carrots and turnips 75.3 75.7 74.4 73.4 73.0 −0.8

Source: Food and Agriculture Organization Corporate Statistical Database (FAOSTAT) Agricultural Production, March 2019

*CAGR: Compound Annual Growth Rate

1: Not Elsewhere Specified

Meat production in the Philippines 2013-2017
Meat – top 4 ('000 tonnes) 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Pig meat 1,681.1 1,690.7 1,775.7 1,863.3 1,837.3 2.2
Chicken meat 1087.4 1,114.9 1,185.9 1,209.7 1,236.6 3.3
Cattle meat 197.8 201.4 205.7 210.3 210.1 1.5
Buffalo meat 99.1 100.1 99.0 102.0 102.1 0.7

Source: FAOSTAT Agricultural Production, March 2019

*CAGR: Compound Annual Growth Rate

Livestock production in the Philippines 2013-2017
Livestock – top 4 (million head) 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Chickens 163.4 167.7 176.5 178.8 175.3 1.8
Pigs 11.8 11.8 12.0 12.5 12.4 1.2
Ducks 10.1 9.9 10.1 10.5 10.8 1.7
Goats 3.7 3.7 3.7 3.7 3.7 0.1

Source: FAOSTAT Agricultural Production, March 2019

*CAGR: Compound Annual Growth Rate

Trade

Imports

The Philippines are a net importer of agri-food and seafood products with total exports of US$7.2 billion in 2018, a decrease of 1.2% from 2017. Total imports were US$13.5 billion in 2018, an increase of 11.8% from 2017 (CAGR of 11.6% between 2014-18). Canada was the Philippines' thirteenth largest supplier of agri-food and seafood products in 2018, with a 2.1% market share, representing an increase of 21.4% from 2017.

Canada's agri-food and seafood exports to the Philippines were valued at US$285.2 million in 2018. Top three commodities imported from Canada included wheat, frozen poultry offal and frozen pork. In 2018, Canada registered an agri-food and seafood trade surplus of US$136.3 million with the Philippines (import value of US$148.9 million) in 2018.

The Philippines' top agri-food and seafood imports from world in 2018 were wheat, soymeal and semi-milled or wholly milled rice. Key supplying countries who exported as much as 53.2% share of commodities into the Philippines were United States, Indonesia, Thailand, China and Malaysia.

The Philippines' top Agri-Food and Seafood imports from the world in 2018, US$ millions and market shares (%)
Harmonized System (HS) Code Commodity Import value US$ millions Top suppliers and market share % Canada's share %
1 2 3
100199 Wheat and muslin 1,669.3 United States: 40.4 Ukraine: 22.9 Australia: 20.7 4.9
230400 Soybean oilcake/other 1.124.2 United States: 76.6 Argentina: 21.4 Australia: 0.1 0.03
100630 Semi-milled or wholly milled rice, whether or not polished or glazed 701.7 Thailand: 50.6 Vietnam: 39.8 India: 3.7 0.0
210690 Food preparations, NES[1] 671.1 Singapore: 33.8 United States: 17.3 Thailand: 9.8 1.9
151800 Animal or vegetable fats and oils and their fractions 570.6 Malaysia: 59.0 Indonesia: 36.8 Thailand: 3.1 0.0
210112 Preparations with a basis of extracts, essences or concentrates of coffee or with a basis of coffee 429.9 Indonesia: 84.0 Vietnam: 12.1 Thailand: 2.2 0.01
020230 Frozen, boneless meat of bovine animals 407.9 Australia: 32.0 India: 30.9 Brazil: 15.8 0.6
040210 Milk and cream in solid forms, of a fat content by weight of <1.5% 296.8 United States: 47.9 New Zealand: 17.5 Netherlands: 8.6 2.7
020714 Frozen cuts and edible offal of fowls of the species of gallus domesticus 267.1 United States: 38.6 Netherlands: 19.2 Brazil: 14.6 8.0
230990 Preparation of a kind used in animal feeding (excluding dog or cat food put up for retail sale) 263.3 United States: 21.9 China: 12.9 Singapore: 9.3 0.9

Source: Global Trade Tracker, 2019

1: Not Elsewhere Specified

The Philippines' processed food and beverage imports were valued at US$9.5 billion in 2018 (CAGR of 10.6% between 2014-18). Canada's share was 1.9% (CAGR of 13.4%) during the same period. The United States, Thailand, Indonesia, China and Viet-Nam were the largest suppliers of processed food and beverages to the Philippines, providing 54.3% of the market share in 2018. The Philippines' processed food and beverage imports from these top five suppliers have increased by 15.0% between 2014 and 2018. Of the top five suppliers, Thailand had the highest growth during the last five years at a CAGR of 30.0%. Although reporting much smaller import numbers in comparison to the top suppliers, in retrospect, Pakistan, Micronesia and Papua New Guinea are emerging suppliers to the Philippines with increased 5-year growth rates of 80.2%, 56.6% and 51.7%, respectively.

Exports

Total agri-food and seafood exports were US$7.2 billion in 2018, a decrease at a CAGR of −0.3% between 2014 and 2018. Canada was the Philippines' thirteenth largest consumer of agri-food and seafood products in 2018, with a 2.1% market share, representing a decrease of 8.5% from 2017. Key consuming countries importing as much as 64.0% of commodities from the Philippines were the United States, Japan, China, South Korea and the Netherlands.

Canada's agri-food and seafood imports from the Philippines were valued at US$148.9 million in 2018. Top three commodities imported by Canada from the Philippines included coconut oil, desiccated coconuts and bakery products.

Philippines' top agri-food and seafood export commodities to the world in 2018, US$ millions and market shares (%)
HS Code Commodity Export value US$ millions Top importers and market share % Canada's share %
1 2 3
080390 Fresh or dried bananas (excluding plantains) 1,796.8 Japan: 43.0 China: 33.4 South Korea: 15.6 0.02
151311 Crude coconut oil 844.3 Netherlands: 45.2 United States: 24.6 Italy: 7.8 0.7
151319 Coconut oil and its fractions, whether or not refined, but not chemically modified (excluding crude) 510.1 United States: 67.0 Japan: 9.9 China: 8.7 5.4
160414 Prepared or preserved tunas, skipjack and Atlantic bonito, whole or in pieces (excluding minced) 386.4 United Kingdom: 19.0 Germany: 17.9 Japan: 16.7 1.4
080111 Desiccated coconuts 376.2 United States: 26.1 Netherlands: 15.2 Canada: 6.2 6.2
080430 Fresh or dried pineapples 357.0 China: 35.7 Japan: 33.9 South Korea: 16.2 0.02
240220 Cigarettes, containing tobacco 238.3 Thailand: 39.7 South Korea: 28.7 Singapore: 17.9 0.0
200820 Pineapples, prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit 192.6 United States: 46.4 South Korea: 7.0 Spain: 6.8 2.5
080310 Fresh or dried plantains 191.6 Iran: 80.0 Qatar: 10.9 Saudi Arabia: 5.0 0.2
130239 Mucilages and thickeners derived from vegetable products, whether or not modified 166.3 United States: 20.8 Spain: 8.6 Belgium: 7.8 1.4
Source: Global Trade Tracker, 2019

Foodservices

All the food services have experienced positive growth in the period 2015-18 and are forecasted to keep experiencing the growth in the period 2019-2022. The most significant growth is forecasted to be fine dining at a CAGR of 8.2%. Quick service restaurant & fast food and casual dining are still the most important food services that gained the most sales throughout the 2015-18 period, indicating a preference of the Philippines' population as those are the most convenient for a population working long hours and have gained some wealth. Bars and the industrial work place are also significant area of the food service that gain a large revenue.

Consumer foodservice sales in the Philippines, historic and forecast, in US$ millions, fixed 2018 exchange rate
Outlet Outlet type 2015 2018 CAGR* % 2015-18 2019 2022 CAGR* % 2019-22
Accommodation Bed and Breakfast 2.9 3.5 6.6 3.7 4.4 5.6
Guest House 24.4 28.9 5.8 30.5 35.1 4.8
Holiday Park 34.4 40.1 5.2 42.0 47.8 4.4
Hostel 2.8 3.4 6.1 3.6 4.1 5.0
Hotel and Motel 309.7 369.1 6.0 389.1 450.0 5.0
Others 1.4 1.5 2.0 1.5 1.6 1.9
Leisure Entertainment 263.8 309.3 5.4 324.2 370.4 4.5
Venue 36.5 41.9 4.7 43.7 49.2 4.1
Visitor Attraction 60.9 71.0 5.3 74.4 84.7 4.4
Mobile Operator Other Mobile Operators 285.8 309.8 2.7 317.7 342.3 2.5
Vans 122.5 133.2 2.8 136.8 147.8 2.6
Pub, Club and Bar Bar 1,135.2 1,235.0 2.8 1,268.8 1,370.6 2.6
Nightclub 133.8 149.5 3.8 154.7 170.6 3.3
Private Members Club 9.5 10.2 2.5 10.4 11.1 2.3
Pub 378.7 410.4 2.7 421.1 452.8 2.4
Social Club 28.9 30.9 2.3 31.6 33.7 2.2
Restaurant Casual Dining 2,294.6 2,662.1 5.1 2,813.6 3,392.1 6.4
Coffee and Tea Shop 184.0 211.7 4.8 221.0 249.4 4.1
Fine Dining 301.2 363.2 6.4 389.4 492.9 8.2
Ice Cream Parlour 77.5 92.4 6.1 97.5 113.2 5.1
Quick Service Restaurant and Fast Food 4,627.7 5,362.7 5.0 5,665.7 6,805.5 6.3
Retail Baker 27.9 33.1 5.8 35.2 43.5 7.3
Convenience Store 53.0 60.2 4.3 62.5 69.8 3.7
Delicatessen 0.4 0.4 5.8 0.5 0.6 7.2
Department Store 2.9 3.4 5.2 3.6 4.3 6.5
Garden and Home Improvement centers 0.2 0.2 4.1 0.2 0.3 3.6
Other Retail 1.0 1.1 5.8 1.2 1.5 7.2
Service Station Forecourt 8.2 9.4 4.9 9.8 11.1 4.1
Supermarket and Hypermarket 52.1 61.6 5.7 64.8 74.7 4.9
Travel Air 101.9 115.8 4.4 120.5 135.1 3.9
Sea 11.1 12.6 4.5 13.2 14.8 4.0
Workplace Government Department and Local Authority 140.9 158.5 4.0 164.2 182.2 3.5
Industrial 419.5 477.9 4.4 497.9 557.4 3.8
Retail, Financial and Office Based 369.7 416.8 4.1 432.6 480.6 3.6
Grand Total 11,504.9 13,190.8 4.7 13,847.3 16,205.1 5.4

Source: Global Data, 2019

*CAGR: Compound Annual Growth Rate

Retail sales

Packaged food sales increased by a CAGR of 6.3% from 2014 to 2018, with an expected increase of 6.2% forecasted from 2019 to 2023. The best performing packaged food category was processed meat & seafood (mainly processed meat) at a retail sales value of US$2.0 billion that also registered a growth rate of 8.5%, the highest growth rate of the packaged food products. Dairy was the second most important sector with US$1.8 billion (mainly drinking milk products), savoury snacks with US$1.4 billion (mainly salty snacks & nuts, seeds and trail mixes) and edible oils with US$1 billion (mainly palm oil and other edible oils). Retail sales value of processed meat & seafood (8.5%) and rice, pasta and noodles (8.4%) have shown the most growth in retrospect over the last 5 years. Ready meals were the only packaged food category to have a negative growth, however, it is expected to record a positive growth at a CAGR of 7.1% in the forecast period from 2019 to 2023.

Packaged food retail sales in the Philippines historic and forecast in US$ millions, fixed 2018 exchange rate
Category 2014 2018 CAGR* % 2014-18 2019 2023 CAGR* % 2019-23
Packaged food 9,139.7 11,664.3 6.3 12,382.7 15,774.5 6.2
Processed meat and seafood 1,415.0 1,959.6 8.5 2,079.4 2,638.0 6.1
Dairy 1,510.9 1,790.6 4.3 1,904.8 2,436.1 6.3
Savoury snacks 1,067.8 1,444.4 7.8 1,550.8 2,055.9 7.3
Edible oils 828.5 1,029.6 5.6 1,079.4 1,289.6 4.5
Rice, pasta and noodles 719.5 993.8 8.4 1,054.1 1,306.9 5.5
Baked goods 738.5 932.3 6.0 988.9 1,254.5 6.1
Confectionery 637.0 791.2 5.6 833.2 1,042.7 5.8
Baby food 674.2 786.9 3.9 835.9 1,098.4 7.1
Sauces, dressings and condiments 525.8 650.6 5.5 686.1 857.2 5.7
Sweet biscuits, snack bars and fruit snacks 364.6 487.0 7.5 520.3 692.3 7.4
Ice cream and frozen desserts 206.8 268.4 6.7 286.6 377.7 7.1
Processed fruit and vegetables 188.2 237.5 6.0 251.9 320.3 6.2
Breakfast cereals 82.2 109.9 7.5 118.1 159.0 7.7
Sweet spreads 69.4 80.6 3.8 85.0 107.7 6.1
Ready meals 78.1 60.9 −6.0 64.8 85.3 7.1
Soup 33.2 41.1 5.5 43.2 52.9 5.2

Source: Euromonitor International, 2019

*CAGR: Compound Annual Growth Rate

In the Philippines, some packaged food companies ventured into niche or under-served areas and adopted new strategies over the 2017-2018 years in an effort to stand out from their competitors. During this period, departing from the common route of merely launching new flavour options, companies also introduced new product formats such as liquid coffee whitener and rolled unpackaged ice cream. These developments were indicative of growing efforts by packaged food players to capture consumer attention with bold moves amidst increasing competition from rivals offering healthier alternatives and even from foodservice operators.Footnote 1

Growth rates for consumer foodservice outlet sales and transactions in the Philippines were up both in 2017 and 2018. This supported a modest improvement in growth in packaged food volume sales to foodservice operators. Olive oil was among the strongest performing categories in this regard. However, this was mainly because foodservice volume sales were emerging from a very low base. Most foodservice players are quite price-sensitive and olive oil is relatively expensive, hence its usage is generally limited to high-end full-service restaurants. Nonetheless, the growing willingness of Filipinos to pay more for added value should help to increase olive oil usage among foodservice operators over the forecast period, as should the availability of competitively priced local brands such as Doña Elena.

Top company shares in the Philippines, historic % breakdown, US$ millions
Top company names 2014 2015 2016 2017 2018
Universal Robina Corporation 8.2 8.2 8.3 8.5 8.6
Nestlé Philippines Inc. 7.9 7.7 7.6 7.5 7.3
Monde Nissin Corporation 5.4 5.4 5.5 5.5 5.5
The Purefoods-Hormel Co. Inc. 5.0 5.1 5.0 4.9 5.0
San Pablo Mfg. Corporation 3.5 3.6 3.5 3.4 3.3
Mead Johnson Philippines Inc. 3.5 3.4 3.4 3.3 3.2
Artisanal 3.7 3.6 3.5 3.4 3.4
Other private label 0.2 0.2 0.2 0.2 0.2
Others 14.4 14.2 14.0 13.9 13.8
Total company shares 51.8 51.4 51.0 50.6 50.3
Source: Euromonitor International, 2019

Universal Robina Corporation continues to lead in company shares in packaged goods, being the only major company to have a consistent growth in percentage shares in 2018. Nestlé Philippines Inc. is the closest competitor with a 7.3% share of the packaged goods market, however, it has been facing a decline in the market share since 2014. The rest of the major players with at least a 3.0% market share have been facing a slight decline in their market share with the exception of Purefoods-Hormel Co Inc. which has regained its 5.0% market share in 2018. This trend has also been seen in the others and artisanal categories indicating an increase in the overall number of companies entering the packaged food sector, also indicating the openness of the market.

Health and wellness food products

The health and wellness sector grew by a CAGR of 7.3% from 2014 to 2018 and is expected to grow by 5.6% over the 2019-2023 period. Consumers are starting to be interested in products that can provide health benefits at a good price. Naturally healthy (NH) and fortified/functional (FF) products showed the largest growth in the 2014-2018 period. These types of food products will continue to lead in value sales over the next five years, with increased growth also occurring in the free from category. However, the better for you (BFY) category has experienced growth but may face a negative growth at a CAGR of −9.2% in the next five years.

Health and wellness food product retail sales in the Philippines, historic and forecast in US$ millions, fixed 2018 exchange rate
Category 2014 2018 CAGR* % 2014-18 2019 2023 CAGR* % 2019-23
Health and wellness by type 3,716.6 4,927.0 7.3 5,194.5 6,448.8 5.6
Fortified/functional (FF) 2,838.3 3,747.1 7.2 3,929.5 4,877.5 5.6
Naturally healthy (NH) 688.5 938.4 8.0 1,008.2 1,305.1 6.7
Free from 93.3 120.5 6.6 130.8 180.4 8.4
Better for you (BFY) 96.5 120.9 5.8 126.1 85.8 −9.2
Organic 0 0 0 0

Source: Euromonitor International, 2019

*CAGR: Compound Annual Growth Rate

Opportunities for Canada

Canada currently has no free trade agreement with the Philippines, however, on September 8th, 2017, Canada and ASEAN member states announced the launch of exploratory discussions for a possible Canada-ASEAN free trade agreement (FTA). The discussions will give both sides an opportunity to exchange information about each other's typical approach to FTA discussions, domestic regulatory regime and to explore the details of a possible Canada-ASEAN FTA. The first set of face-to-face exploratory discussions took place July 11-12, 2018, in Singapore. The Government of Canada wishes to expand trade and investment with large, fast-growing markets, including ASEAN. ASEAN as a region is the sixth largest economy in the world, and Canada's sixth largest trading partner.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

Resources

Market Overview – Philippines
Global Analysis Report

Prepared by: Bliss Morgan, (Co-op Student) Global Analysis

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2019).

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