The Philippines has been one of the most dynamic economies in the East Asia Pacific region. Average annual growth increased to 6.4% between 2010-2019 from an average of 4.5% between 2000-2009. With increasing urbanization, a growing middle class, and a large and young population, the Philippines’ economic dynamism is rooted in strong consumer demand supported by a vibrant labour market and robust remittances.
Philippines is set to experience rapid economic growth should the momentum of the current government continue, leading to better income for the people. Growth of the middle income will increase discretionary spending leading to growth in various sectors, especially the hotel, restaurants and catering industries. As the population continues to grow, so do the low-income earners who need affordable food while also expecting to experience the convenience of food preparation. Food industries in the Philippines will need to look for quality and economical ingredients to ensure the cost of production is kept low to offer affordable food while maintaining a good profit.
Foodservice sector in the Philippines recorded an upward trend from 2015 to 2019 with a strong CAGR of 7.84%. However, due to the Covid-19 outbreak, the sector has suffered immensely in 2020 and 2021. The pandemic not only changed Filipino dining habits but also impacted the foodservice industry’s revenue. Due to prolonged lockdowns, the sales of the foodservice sector have dropped by 43.4% to USD8.56 billion in 2020 and continue to drop to USD7.5 billion in 2021.
Although the sales in the foodservice sector have shown a decline due to the pandemic and movement restrictions, the consumers’ spending on food and beverage has significantly increased in 2020 and 2021. In 2021, the consumer expenditure for food & beverages in the Philippines was valued at over USD106.97 billion which increased by 16.8% from USD91.58 billion in 2019. It shows that the demand for food and beverages will continue to increase year by year.
Palm Oil in the Philippines
Philippines is the second largest importer of Malaysian palm oil in the Asia Pacific region. With a total population of 115 million people, the consumption of oils and fats was at 1.7 million MT in 2021 increase of 41,000 MT or 2.5% compared to 2020. Palm oil is the main consumed oil in the Philippines which accounted for approximately 76.7 % of total oils and fats consumed in the country in 2021.
The trend of palm oil consumption in the Philippines has grown at a compounded annual growth rate (CAGR) of 2.9% since 2017. The consumption of oils and fats is growing driven by strong growth in the food and beverage sector. Palm oil is mainly used in the household, foodservice sector and food processing industries. The demand for palm oil in Philippines is expected to show an upward trend in the future in food industries especially the foodservice sector as the sector is one of the major consumers of palm oil in the country.
|MPO Export to the Philippines (by product)||2021||2020||Change (MT)||Change (%)|
|RBD Palm Olein||543,176||635,859||(92,683)||(14.58)|
|RBD Palm Oil||19,828||30,499||(10,670)||(34.99)|
|RBD Palm Stearin||5,865||9,889||(4,024)||(40.69)|
RBD palm olein is the main imported Malaysian palm oil product in the Philippines with a share of 93.7% of total Malaysian palm oil import to the Philippines. RBD palm olein is a popular frying oil that has a longer shelf life for finished goods and a good resistance to oxidation and the formation of breakdown products at frying temperatures. It is widely used as cooking oil in the Philippines in various sectors, particularly in the foodservice sector.
The top five foodservice players in the Philippines are from the fast food restaurant segment. Jollibee is one of the leading fast food restaurants in the Philippines, with around 1,400 restaurants nationwide. Palm oil is widely used in the fast food restaurant segment. The rising popularity of fast food restaurants and growing preference for takeaway food and beverages are the major drivers for growth in the foodservice industry. Filipinos’ eating habits have been influenced by the companies’ exposure to media marketing. The growth in the foodservice industry in the Philippines is also being helped by the growing number of millennials looking for inexpensive places to eat with friends. Also, the expansion of shopping malls and hypermarket chains is projected for the growth of fast food restaurants revenue as well as foodservice industry in the country. This growth will spur the demand for palm oil in the country and Philippines will continue to depend on imported palm oil from Malaysian and Indonesia.
Referring to Philstar Global’s article, GlobalData firm projected the foodservice sector in the Philippines will reach 1.01 trillion pesos (~USD17.45) in 2026 with a CAGR of 17.5% from 451.1 billion pesos (~USD7.5 billion) in 2021. While palm oil consumption in the Philippines is expected will grow at 6% CAGR to 1.75 million MT in 2026.
Prepared by: Rina Mariati Gustam
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- USDA, Foodservice – Hotel Restaurant Institutional