Philippines Country Profile

Market Overview:

Euromonitor reports that the Philippine economy will continue to grow at a solid pace in 2018. Private final consumption and tourist receipts are important drivers. A massive infrastructure program provides additional support. Exporters will also see moderate gains. Uncertainty over pledged investments by China is a concern. The economic outlook is bright thanks in large part to the Philippines’ youthful and growing population. Growth of real Gross Domestic Product (real GDP) will be about 6.9% per year in the medium term.

  • The Philippines is one of Asia’s fastest-growing countries. Real GDP will increase by 6.5% in 2018 after gains of 6.7% in 2017
  • The real value of private final consumption rose by 5.2% in 2017 and an increase of 5.6% is expected in 2018 - A rise in real wages and rapid growth of credit support consumer spending
  • Manila has launched a US$180 billion infrastructure program which could push spending on building projects to 5% of GDP. Projects include a subway system for Manila, new rail and road projects and a refurbishment of an international airport

The country’s demographics should help to drive consumer spending in the medium term. Well-educated Philippines between 25 and 34 years account for just 3% of the population but more than 20% of discretionary consumption – that is, spending on categories other than basic needs. By 2020, this particular demographic group is expected to contribute 50% of the country’s discretionary expenditure. Robust growth in credit should also fuel growth of consumption over the next several years.

The USDA Office of Agricultural Affairs (OAA) in Manila hereinafter referred to as “Post” reports that the U.S. continues to be the Philippines’ number one supplier of agricultural products and the Philippines is its 11th largest U.S. export market in the world. Competition has intensified and new challenges have emerged for U.S. exporters due to bilateral and regional free-trade agreements. Consumer-oriented food & beverage products remain the best prospects for future export growth fueled by consumer familiarity with American brands and the steady expansion of the country’s retail, foodservice and food processing sectors.

U.S. exports of consumer ready food products to the Philippines totaled US$964.3 million in 2017, an increase of 2% from 2016. The Philippines is the largest market for U.S. exports of consumer ready products in the region, and ranks 12th overall in the world. The Philippines is an active importer of U.S. processed foods and the 7th largest U.S. market. In 2017 U.S. processed food exports went up 2% totaling just over US$1.1 billion. Top 2017 U.S. processed food exports included:

  • Food preparations
  • Processed/prepared dairy products
  • Prepared/preserved meats
  • Processed vegetables and pulses
  • Snack foods
  • Chocolate and confectionery
  • Dog and cat food
  • Non-alcoholic beverages.
  • Condiments and sauces

Retail Sector:

According to Euromonitor, retail sales in the packaged food market in the Philippines had been estimated to reach US$11.8 billion in 2017. That represents a growth rate of 25.9% or over US$2.4 billion million since 2013. The forecast for growth in this market is also quite promising. By the year 2022, the retail sales in the packaged food market in the Philippines is expected to reach US$16.3 billion, a growth rate of 29.7% or US$3.7 billion. High growth categories in the forecast include:

  • Breakfast cereals
  • Sweet biscuits, snack bars and fruit snacks
  • Savory snacks,
  • Ice cream and frozen desserts
  • Processed meat and seafood
  • Edible oils
  • Processed fruit and vegetables
  • Baked goods
  • Dairy products

Post reports that driven by a growing population, strong domestic consumption, and a buoyant economy, the food retail sector in the Philippines continue to grow. Sales in the food retail business increased by 4% in 2016 with US$45.3 billion in value. The largest grocery retailers (i.e. SM, Robinsons, and Puregold) still dominate the food retail business that contributed to the robust growth of the industry in the last five years. In 2016, these retail giants focused on expanding its mid-sized supermarkets and small format stores (i.e. convenience stores and minimarts) into smaller towns across the country.

Passage of the retail trade liberalization law in the early 2000 caused local supermarket chains to undergo several changes to modernize, expand, consolidate, stream-line operations, and broaden their line of imported brands, often via direct importation. The legislation, which allows foreign retailers to operate independently in the Philippines, has fostered growth in large-scale modern stores that offer a wider range of imported foods and purchase directly, eliminating the 20%-40% mark-up charged by importers/distributors. Over the past 20 years, modern and large-scale food retail formats such as hypermarkets, supermarkets, and convenience stores have increased rapidly in numbers and are visible at almost all corners of every city.

Below is the summary profile of major retail grocery outlets:

  • Super Value Inc. or SM Supermarket, the food retail arm of SM Investments, is the dominant player in the food retail industry in the Philippines. Having established its first store in 1985, SM Supermarket operates 44 branches across the Philippines. SM Supermarkets are primarily located inside SM Malls. SaveMore Market is a chain of neighborhood grocery stores under the SM Food Retail Group (other food retail formats under SM are SM Supermarket and SM Hypermarket). SaveMore stores are located outside an SM Mall in either stand-alone outlets or as an anchor tenant of a commercial center/commercial building or non-SM mall. It has a total of 152 stores nationwide. SM Hypermarket is a superstore combining a supermarket and a department store, offering more than 150,000 brands of merchandise with the aim to allow customers to satisfy all their routine shopping needs in one trip. SM Hypermarkets are usually located within a mall and have 46 branches nationwide.


  • Puregold Price Club Inc. (PPCI) is a chain of supermarkets that was established in 1998 when the one-stop shopping philosophy was an emerging idea. PPCI, the second largest food retailer in the country has three store formats: Puregold Price Club (a hypermarket), Puregold Jr. (a neighborhood store), and Puregold Extra (discounter supermarket). Ranked as number two in food retail, Puregold Price Club Inc. has grown into a giant retail chain with 281 stores nationwide. Puregold Price Club Inc. also owns S&R Membership Shopping which used to be PriceSmart- the first U.S.-based chain to enter the Philippines in 2001 after the passage of the 2000 Philippine Retail Trade Liberalization Law. S&R Membership Shopping opened in 2006 and now has 13 stores nationwide, including their newest store in Cagayan De Oro which opened late last year.


  • Robinsons Supermarket, the third largest supermarket chain in the Philippines, is a subsidiary of Robinsons Retail Holdings Inc. Established in 1985, Robinson Supermarket is the first major retailer to promote health and wellness. Robinsons Supermarket has recently launched two new sub formats: Robinsons Easymart and Robinsons Selections. Robinsons Easymart is a network of compact neighborhood grocery stores, brings the grocery experience closer to communities in order to provide households ease of accessibility and convenience of shopping for their everyday needs while Robinsons Selections cater to the premium market and carry more imported merchandise than the usual Robinsons Supermarket. In addition to the essential supermarket sections, Robinsons Selections is also complete with a food-to-go section, a gourmet deli section, a health and wellness section, and a pharmacy.

  • Rustan Supercenters Inc. (RSI) is the retail arm of Rustan Commercial Corporation, the premier chain of upscale department stores, operating in the Philippines for almost 50 years. RSI is a pioneer in modern grocery retailing and is the operator of Rustan’s Supermarkets, the Shopwise chain of hypermarkets, Wellcome Supermarket and Family Mart convenience stores. Rustan Supercenters Inc. is now a member of the Dairy Farm International Group -- a multinational company that brought Mannings, Giant, Jason’s Guardian, Ikea, Cold Storage, and many more retail superstores worldwide. Aside from its conventional supermarket chains and high-end Marketplace stores, Rustan’s has recently launched its neighborhood supermarket format called Shopwise Express, now with 7 branches in Metro Manila.

Convenience stores continue to expand due to the bullish Business Process Outsourcing (BPO – call centers) sector and the increasing number of outlets opening in condominiums and areas outside Manila. These stores cover the business centers and BPO hubs and operate on a 24- hour basis, making them an ideal place for midnight shifters to grab food to eat during break time.

Aside from well-stocked shelves of packaged food, beverages, and other basic household necessities, convenience stores also offer other services such as bill payment and mobile phone reloading transactions. Convenience Stores and Gas Marts which are mainly location-oriented are thus able to sell products at a premium in exchange for convenience.

Convenience stores led the growth of modern grocery retailers in 2016 with almost 17% growth on the number of outlets and 8% in terms of sales. This was driven by both the expansion of existing players such as 7-Eleven, Mercury Drug, Ministop, and Alfamart coupled with the gaining popularity of various foreign brands such as Lawson and Family Mart.

Below is the summary profile of some of the key convenience stores:

  • Seven-Eleven is the country’s biggest convenience store chain in the Philippines with almost 2,000 stores nationwide. Acquired by Philippine Seven Corporation in 1982 and established in 1998, 7-Eleven is the first franchisor in convenience retailing. Aside from grocery /food retailing, 7-Eleven also offers telecom, bills payment and banking kiosk services
  • Ministop Philippines is a subsidiary of Robinsons Retail Holdings, Inc. that operates as a grocery and fast food diner combined. Established in 2000, Ministop now has almost 500 stores in Metro Manila and nearby provinces in Luzon
  • FamilyMart was launched in the Philippines in 2013 in partnership with the Ayala and Rustan’s Group. Currently with 58 stores in Metro Manila, FamilyMart aims to increase its presence by opening more though franchising
  •  Lawson, a convenience store giant in Japan, was launched in the Philippines last June 2015 through a joint venture by Puregold Price Club Inc. with Lawson Asia Pacific Inc. Now, with 25 stores, Lawson targets to roll out 500 branches in the next five years
  • Circle K is an international chain of convenience stores franchised and managed by Suy Sing Group of Companies and Super 8 Retail Systems. Circle K convenience stores are primarily located in the outskirts of Manila

Post reports that U.S. exporters who wish to supply food products to local food retailers may prefer to have an exclusive importer/distributor or engage the services of a trading firm in order to enter the market instead of putting up a local company in the Philippines. These importers or trading firms usually have their own distributors and sometimes act as distributors themselves. This strategy eliminates the inconvenience of having to register a local company and hire personnel which could be expensive in the long run.

Importer/Distributors are also typically well-versed on local customs and import paperwork issues, freeing the exporter from having to deal with these. Large retail stores usually have many suppliers which include local manufacturing companies or their distributors, trading firms or importer/distributors. There are, however, retailers who direct import some products themselves, although sourcing from importers/distributors is the most common and preferred practice in the industry. These retailers normally have a central receiving, warehousing and distribution center.

Best Prospects:

Post reports that the established reputation of U.S. food and beverage products in the food retail sector in terms of quality, availability and versatility represent an advantage for U.S. exporters seeking to develop and expand their market in the Philippines.

  • Healthy, natural and organic products
  • Gourmet products - specialty cheeses, sauces & condiments
  • Instant or convenience foods - snack foods, meal-replacements RTD beverages
  • “Double” products (retail and food processing)
  • Beef and poultry meat products
  • Dairy products
  • Processed vegetables
  • Fresh fruits and vegetables   

Food Service Sector:

Post reports that the continued growth in the Philippine Hotel, Restaurant Institutional (HRI) foodservice sector is driven by the robust economy, rising 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 the number of women joining the workforce.

Restaurants in five-star hotels and upscale malls, Western-style diners and cafes, and fast-food chains require high-quality Food & Beverage (F&B) products such as meats, poultry, seafood products, 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.

Euromonitor reports from their “Consumer Foodservice in the Philippines” (May 2017):

  • A strong propensity to spend amidst a robust economy drives growth in consumer foodservice: Consumers have developed a strong propensity to spend as the economy has continued to grow and boost their income and lifestyle. In particular, the emerging middle class has shown a willingness to spend on higher-quality and filling meals and on new food and dining experiences. This has driven growth for consumer foodservice operators, which have continued to increase in number and in variety. To retain competitive relevance, players have launched aggressive marketing and promotional campaigns, offered improved services and facilities, and have capitalized on flagship products.


  • Fast food continues to grow aggressively and poses serious competition to other categories: Fast food has continued to post double-digit growth rates in both value sales and outlet number terms, as players have expanded to new locations and improved their food and service offerings. Apart from following the development of retail establishments in suburban locations and secondary cities, fast food operators have opened their own standalone outlets, as well as capitalized on their popular menu offerings and launched aggressive marketing campaigns. All these factors have allowed them to compete strongly against the quality and ambience of full-service restaurants, the comfort and beverages of cafés, the pricing of food kiosks, and the convenience of home deliveries, among others.


  • Chained operators overtake independents in value share but still trail behind in outlet share: Chained operators overtook independent operators in terms of value share in 2016, as chains have continually grown faster in recent years due to their brand familiarity, industry experience and financial flexibility. While consumers have found it easier to recognize and identify with chained brands, entrepreneurs have found it profitable to franchise; both factors have facilitated growth for chained players.


  • Expansion to new geographical markets supports sustained growth for consumer foodservice: Consumer foodservice in the Philippines will sustain its upward momentum as players are able to penetrate new geographical markets, and because of the continued development of new urban centers in provincial locations. Both independent and chained operators will enjoy new location opportunities, which will enable them to either explore new food and dining concepts or reach out to new consumer groups. Meanwhile, consumers are expected to respond positively as they appreciate new offers and concepts, and are capable of spending on dining out.


  • Novel and innovative concepts emerge as consumers seek increased engagement and fun: Novel and innovative concepts such as game cafés, food parks and food halls have continued to rise in popularity and in number, as consumers look for increased engagement either with a brand or with family and friends. While game cafés have provided a new venue for consumers, particularly students and young professionals, to enjoy time with family and friends, food halls have improved the food court dining experience and enabled diners, particularly families and groups, to select from a more creative selection of food stations. Meanwhile, food parks have delivered both, along with social-media-worthy food presentations and dining set-ups.

Best Product Prospects:

Post reports that based on industry interviews, roughly 25% of all F&B imports flow through the HRI sector. With most analysts projecting sustained growth in the Philippine economy and the HRI sector, Post anticipates continued growth in F&B import demand through 2017 (and beyond) across a wide spectrum of products, with some of the fastest growth potential in convenience, gourmet, and “healthy, natural, and organic” categories.

Top product prospects in this sector currently include:

  • Beef, pork, lamb, chicken and turkey
  • Wines
  • Preserved fruits & pie fillings
  • Craft beers
  • Individually quick frozen (IQF) fruits & vegetables
  • Tree nuts
  • Fruit & vegetable juices
  • Cheeses and dairy products
  • Frozen potatoes (new cuts)
  • Fresh fruits and vegetables
  • Dehydrated potatoes

Food-Processing Sector:

Post reports that 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 2016, the industry’s gross value-added output increased 10% over the previous year to US$28.9 billion. Roughly 90% of the industry’s output is consumed domestically; as quality and efficiency continue to improve, the Philippines will be in a position to exploit export opportunities in the region due to its strategic location and membership in various free trade agreements, such as the Association of Southeast Asia Nations Free Trade Agreement (AFTA) and the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).

While several U.S. agricultural exports to the Philippines face higher tariffs than competing products imported from ASEAN-member countries and/or ASEAN-FTA member countries such as Australia, New Zealand, China and India, the Philippines’ participation in free trade agreements provides a valuable path for U.S. agricultural raw materials and ingredients to grow in tandem with Philippine exports and penetrate markets throughout the region.

While most of the roughly 500 F&B processors registered under the Philippine Food and Drug Administration are micro to medium-sized businesses, food processors are also among the largest corporations in the country.

Aside from trade liberalization, future trade of processed F&B products in the region will be driven by:

  • Strong economic growth, rising incomes, increasing urbanization
  • Demand for greater product variety, quality, convenience and safety
  • The proliferation of bigger and more sophisticated retail and foodservice formats
  • As the quality and competitiveness of Philippine processed F&B products improve, exports are expected to rise
  • While exports to major trading partners such as the U.S. should continue to grow, prospects for the lucrative East and Southeast Asian markets are especially strong because of the country’s strategic location
  • The nation’s capital, Manila, is situated within a six-day trip by sea or a four-hour trip by air to any major port in the region - the short transit time makes it an ideal staging area, especially for frozen and chilled products
  • The Philippines’ membership in regional free trade agreements further augments the industry’s export prospects
  • Exemplifying a classic win-win trade scenario, the Philippine F&B processing industry’s growing use of U.S. agricultural ingredients provides a valuable path for these U.S. products to grow in tandem with Philippine exports and expand market share throughout the region

Some exporters have been able to successfully penetrate the Philippine market by providing technical assistance to Philippine F&B processors on the applications of raw materials and ingredients. This is especially true for more “advanced” ingredients such as protein isolates, and less familiar ingredients such as dehydrated potatoes and pea flour. Other areas for knowledge transfer include: product development and innovation, automation of the production process, product preservation and packaging.

Best Product Prospects:

Based on interviews with Philippine F&B processors the top growth prospects for U.S. agricultural raw materials for further processing include poultry cuts including:

  • Mechanically de-boned poultry meat
  • Trimmings and beef offal’s for sausage manufacturing
  • Milk and whey powder
  • Frozen concentrated fruit and vegetable juices
  • Dried and dehydrated fruits, vegetables and nuts
  • Specialty flours (e.g. soy, pea and potato)
  • Seafood products (e.g. salmon heads and bellies, squid, crab claws)
  • Sweeteners and beverage bases
  • Grains and cereals
  • Protein isolates and concentrates;

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