Page 58 - FoodFocusThailand No.167 February 2020

SURF THE AEC
SURF THE AEC

Targeting the Philippines

Food Market

The Philippines is a land of party and celebration. It is the second biggest food
market in ASEAN following only the Indonesia. With continuous economic
growth at the rate of 6.4% and increasing disposable income, the market
is growing strong with the potential for value-added food products such as
instant/ready-to-eat meal, alcohol, and food services.

Intriguing Strengths in the Philippines Food Market competitive with modern management and good understanding of the
• The Philippines is a net food importer. Rice, in particular, is expected domestic consumption trend, as seen from the success of Jollibee and
to be imported for 2.3 million metric tons in 2019, increasing 21% from Barrio Fiesta that are capable to compete with international brands.
2018 (Source: FitchSolutions).
• The country has an enormous population approximately 105 million. Weaknesses
More than 10 million Filipinos are working overseas and send back more • Having only a handful players in the food industry could lead to
than USD 31 billion to the homeland, which resulted in increasing monopoly.
purchasing power. • The food processing industry is structurally impacted by limited
• Birth controlling is against the Roman Catholic practice, which and insufficient agricultural products due to low capacity cultivation,
means new Filipinos are being born each year. Thus, consumer base insufficient silos and mills, and inefficient logistics network.
is growing continuously. • Low earning does not attract labours into the agricultural sector,
• San Miguel Corporation (SMC) is the Philippines’ strong especially when comparing to the IT-BPO sector. Working overseas
multinational company. Its business revolves around food and beverages, can generate a better income for many Filipinos. Moreover, many
similar to Thailand’s CP, with San Miguel beer as a flagship product. farmers are leasing land for farming, which pushes for high cost.
• Filipinos are keen to celebrate, and often celebrate, similar to people • The country also has a low income per head (USD 3,300 in 2018)
in Spain and other Hispanic countries. Thus, alcohol is a must in every and high unemployment rate (5.5%), which prompt many people to
events. lack the ability to find processed food.
• Intense competition occurs for every alcoholic products, especially • Traditional retail stores are holding the highest market share in
beer, from both local and international brands. However, younger the retail food sector (75%). Meanwhile, the basic infrastructure for food
generation is a key target group who fancy international brands like distribution still has not received enough improvement and runs in poor
Heineken and Tiger Beer. condition, yet, high costs.
• Chained restaurants are highly popular (including Thailand’s Mango • Geographically, the Philippines has 7,641 islands and limited roads
Tree) whether they are local or international. Local enterprises are that lack thorough accessibility. Most of the lands are mountains and

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