PHILIPPINE FOOD sales are forecast to grow 5% this year as a result of sustained domestic demand driven by population growth, rising incomes, and overseas remittances, according to the US Department of Agriculture (USDA).
Food and beverage manufacturing is expanding in the Philippines, indicating solid growth in the industry despite higher production costs, particularly for inputs, the USDA said in a report by its Foreign Agricultural Service.
It said Philippine manufacturers are exploring product diversification and nutritious food options while tapping new customers to increase sales.
It said the 5% forecast is also supported by easing inflation, which fell to 2.1% in February from 2.9% a month earlier.
“Food and beverage manufacturers’ sales grew 5% and 11%, respectively, in 2024 despite inflationary pressures,” the report noted, adding that food and beverage consumption grew 3% in the same year and “still forms the majority of household spending in the Philippines.”
The report said food and beverage retail sales will likely grow 7% in 2025 “as the expansion of modern retail stores continues.”
Food and beverage retail sales grew 6% in 2024, against 8% in 2023.
The USDA said it projected “robust” growth of 12% for food services as restaurant chains drive sales with expanding store networks and new restaurant concepts, while maintaining online deliveries.
It said the Philippines has an enabling environment for food and beverages, with its economy poised to grow by 6% in 2025 with “higher consumption as incomes rise and the population continues to steadily grow.”
The Philippine economy grew 5.6% in 2024, below the 6%-6.5% government target. The service (6.7%) and industry (5.6%) sectors posted growth in 2024 while agriculture, forestry, and fishing (-1.2%) sectors declined.
The report also took note of the 1.5% annual growth in the Philippine population, which was estimated at 120 million people.
The USDA said the majority of Philippine consumers have adopted thriftier spending practices, shifting preferences toward smaller package sizes or private-label brands.
Overall food sales are forecast to “continue growing.”
The report noted that Philippine manufacturers rely on ingredients from the US, which remains the largest single-country exporter to the Philippines with 16% market share despite preferential market access and proximity to China, India, New Zealand, Australia, and Southeast Asian countries.
“Canada and Europe compete in the premium product market but face similar constraints as the US,” it said.
The report said the Philippine market presents “strong opportunities” for wheat, dairy products, poultry, pork, beef, starch products, fruits, and vegetables from the US, adding that premiumization and healthier trends provide opportunities for US exporters.
The report noted that US exporters remain at a competitive disadvantage vis-à-vis Asia due to logistics and transportation lead time and costs.
“US exporters face trade barriers such as higher tariffs (Most-Favored Nation) compared to Asian countries with preferential trade agreements,” it added.
It noted that rising input costs have led some Philippine manufacturers to source from multiple suppliers and substitute some ingredients to increase margins. — Kyle Aristophere T. Atienza