American multinational investment banking firm Goldman Sachs lists the Philippines as one of the 21st century ‘Next Eleven’ economies based on macroeconomic stability, political maturity, the openness of trade and investment policies, and the quality of education. By 2030, the Philippines is expected to become a $1 trillion economy according to Washington-based analytics firm IHS Global Insight based on its latest “Sovereign Risk Review.” The country is the only sovereign in Asia that got a positive action from IHS.
The Hongkong and Shanghai Banking Corporation (HSBC) Holdings PLC also forecasts that by 2050, the Philippines will become the 16th largest economy in the world, the 5th largest economy in Asia, and the largest economy in Southeast Asia.
In the recent years, the rapid modernization and expansion of the Philippine food retail industry have led to the increase of national and upscale supermarket chains throughout the country. The use of improved cold chain and distribution systems in these modern supermarket chains also allow better storage options for imported food that offers superior quality, variety, and reliability to the generally more upscale and demanding supermarket customers.
These retail chains provide lucrative opportunities for imported and high-value food items in the Philippines through their fast product turnover, growth and wide market base. Retail is expected to account for one-fifth of the Philippines’ GDP by 2025, as the BPO industry helps boost the local economic growth.
The growing demand for convenience has led to the expansion of the Philippine food service industry in the form of fast-food restaurants and casual dining restaurants. Full-service restaurants are also growing, especially in fashionable shopping or dining areas in Metro Manila. Competition in this segment is keen, with restaurant operators always interested in new and exciting menu ideas to attract customers.
Based on the 2012 nationwide Census of Philippine Business and Industry (CPBI), the Philippines food service industry amounts to roughly US$7.2 Billion with an estimated 15% to 20% annual growth over past decades.
Food accounts for nearly half of the total output of the country’s manufacturing sector, which contributes around 23-24% of the annual GDP. With an average annual growth rate of 8-10%, the food manufacturing industry has been identified by the Philippine government as a priority sector for attracting foreign investment under special economic zones.
As of 2016, the Philippines’ food manufacturing growth remains the second fastest in ASEAN. The Japan External Trade Organization (JETRO) reported that the Philippines has become a favored country for Japanese manufacturers given its low production cost, which is considered as one of the lowest in Asia. Labor productivity has significantly increased by as high as 6% in 2015.
As of 2015, the Philippines’ Food and Drug Administration (FDA) tallied around 12,000 food processing establishments nationwide, most of which are owned by single proprietors. This is common among micro, cottage, and small industries.