Sales in the Philippine Hotel, Restaurant and Institutional (HRI) food service sector have grown by 99 percent over the past five years to an estimated $4.25 billion in 2012.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number:
Food Service - Hotel Restaurant Institutional
2012 HRI Food Service Sector
William G. Verzani
Joycelyn G. Claridades
Sales in the Philippine Hotel, Restaurant and Institutional (HRI) food service sector have grown by 99
percent over the past five years to an estimated $4.25 billion in 2012. A booming economy, the
proliferation of malls and shopping centers throughout the country, and a growing influx of tourists
have all contributed to this strong growth. Based on industry interviews, roughly 25 percent of all
consumer-oriented food and beverage (f&b) product imports flow through this sector. As the
Philippines remains the largest market in SE Asia and one of the fastest growing markets in the world
for U.S. f&b products (with 2012 export sales estimated up 12 percent over the previous year to a
record $850 million), U.S. suppliers are well positioned to compete in multiple product categories.
I. Market Summary:
Macroeconomic Situation and Trends
According to the Philippine National Statistical Coordination Board (NSCB), after growing 7.6 percent
in 2010 (the highest in over 20 years), Philippine GDP growth slowed to 3.7 percent in 2011. In 2012,
the strong upward trend GDP returned with an impressive 6.6 percent growth. The Philippine economy
is dominated by industry, services and agriculture. NSCB data indicates that the industry sector is
forecast to expand by 6.5 percent in 2012 from 1.9 percent in 2011; the services sector is forecast to
expand by 7.4 percent in 2012 from 5 percent in 2011; and that the agriculture sector is forecast to
expand by 2.7 percent from 2.6 percent in 2011.
The Philippine Peso strengthened in 2011with an average exchange rate of P43.31/US$, up 4 percent in
appreciation from the P45.11 average rate in 2010. In 2012, the Peso strengthened further with an
average rate of P42.23/US$. According to the Central Bank of the Philippines, the country’s foreign
exchange reserves hit an all-time high of $84.25 billion at the close of 2012, up by about 12 percent
from $75.30 billion the previous year.
The Philippines is a key market in Southeast Asia and the 9th largest globally for U.S. agricultural
exports. In 2012, total U.S. agricultural export sales to the Philippines are expected to increase by 14
percent to a record $2.4 billion (latest available data is through November). The top U.S. exports in
2012 were wheat (estimated at $650 million) and soybean meal (estimated at a record $580 million).
All indications are for continued strong growth in U.S. agricultural sales to the Philippines in 2013,
currently forecast to reach $2.5 billion.
U.S. consumer oriented f&b exports (a subsector of total U.S. agricultural exports) to the Philippines
have increased an estimated 12 percent in 2012 to a record $850 million and have doubled since 2009.
The Philippines remains the largest U.S. f&b market in SE Asia, and one of the fastest growing in the
world. The most recent U.S. Customs data (please see the chart below) indicates that at least 10 of the
16 f&b categories will have achieved record sales in 2012 (latest available data is through November).
Top f&b exports were dairy products, red meats, poultry meat, snack foods, processed fruits &
vegetables, and fresh fruits.
U.S. Consumer Oriented Food and Beverage Exports to the Philippines
CY 2006-2011 And Year-To-Date Comparisons
Value in Thousands of Dollars
Calendar Years (Jan-Dec) January - November 2012*
2006 2007 2008 2009 2010 2011 2011 2012 e
Consumer 273,32 380,51 518,83 423,16 601,05 761,18 699,35 793,88
Oriented Total 1 0 7 8 7 9 5 7 13.50
Vegetables 346 1,301 2,070 1,565 4,364 5,953 5,418 3,191 -41.10
Meats,FR/CH/F 110,68 103,11
R 10,742 21,528 64,840 83,442 7 4 95,003 96,662 1.75
Poultry Meat 14,298 19,978 19,841 39,860 50,326 70,037 64,403 79,639 23.66
Prep/ Pres 8,041 10,010 11,897 16,610 23,019 28,987 26,674 29,600 10.97
Eggs & Products 580 506 1,107 1,619 825 1,919 2,032 2,137 5.13
151,98 210,22 181,53 281,02 257,91 292,40
Dairy Products 95,631 4 6 76,575 3 5 9 3 13.37
Fresh Fruit 16,159 18,179 23,154 32,787 31,274 41,894 38,757 48,727 25.73
Cereals 1,499 2,719 3,121 2,223 3,658 3,849 3,404 3,420 0.49
Pet Foods 8,462 10,651 13,487 13,743 16,152 20,024 18,090 20,490 13.27
Oriented 27,056 28,964 41,745 53,283 51,269 57,255 52,228 66,750 27.81
Wine and Beer 4,247 4,614 7,772 7,423 8,068 8,110 7,656 7,532 -1.63
Snack Foods 35,629 41,306 50,464 47,863 50,494 64,745 59,562 65,676 10.26
Products 49 89 19 36 36 84 84 176 110.26
Tree Nuts 2,787 2,910 3,723 2,553 4,447 4,538 4,075 5,022 23.23
& Vegetables 41,571 51,621 54,876 36,867 61,692 57,092 64,784 13.47
Juices 6,223 14,152 10,496 6,719 7,679 7,963 6,959 7,678 10.33
Source: US Customs as reported in U.S. Department of Agriculture Global Agricultural Trade System
Note: Highlighted Figures Denote Highest Export Levels Since at Least CY 1970
* Latest Available Data as of January 28, 2013
II. Foodservice Sector Overview and Trends
Sales in the Philippines HRI sector have grown by 99 percent over the past five years to an estimated
$4.25 billion in 2012. A booming economy, the proliferation of malls and shopping centers throughout
the country, and a growing influx of tourists have all contributed to this strong growth.
III. Advantages and Challenges for U.S. Exporters
The Philippines has a large base of experienced Few importers have a nation-wide
importers that cater to the HRI sector. distribution network.
The high cost of inter-island shipping
makes imported products more expensive
in areas outside Manila.
The foodservice sector is familiar with the availability, Stiff competition from European and
quality and applications of U.S. f&b products. Asian f&b products in the market.
The popularity of American holidays and culture lead
to Americana-themed promotional events by Philippine
restaurants and hotels throughout the year.
Philippine consumers are open to various international Consumers are price-sensitive.
cuisines, providing opportunities for a broad range of
U.S. f&b products.
The recent depreciation of the U.S. dollar compared to Prices of U.S. f&b products are still
the Philippine Peso makes U.S. f&b products more generally higher than regionally imported
affordable and price-competitive. products.
The rapid urbanization of provincial cities presents Insufficient cold chain infrastructure.
opportunities for U.S. f&b products.
IV. Roadmap for Market Entry
U.S. exporters are encouraged to participate in local/regional trade shows and buying missions to
meet potential importers and introduce your products.
Exclusive distributorship agreements are preferred by Philippine importers. U.S. exporters can
work with one or several importers provided the market coverage of each importer is properly
Some Philippine importers maintain buying offices in the U.S. and consolidate their shipments
on the West Coast. Others consolidate shipments through third-party U.S. consolidators.
U.S. exporters are encouraged to maintain close contact with their Philippine importers and
support efforts to introducing the products to foodservice customers by participating in technical
seminars, product demonstrations, and local trade shows. Regular market visits are also highly
valued by Philippine importers and regarded as a show of support.
U.S. exporters are advised to require payment of goods via a letter of credit, especially for initial
transactions. Credit terms may be extended to the importer after conducting a thorough
background and credit investigation, and after payment habits have been established. Importers
request for ample credit terms since HRI customers demand 30-60 days credit.
Releasing goods from Philippine Customs sometimes poses a challenge, especially for
General pricing structure: Importers add about 30% to the landed cost (CIF + Duties & Taxes)
to arrive at the wholesale price for HRI customers.
HRI customers rarely import f&b products directly, except for a few fastfood chains. The
importation is done mostly by importers and a few retailers.
Importers distribute directly to HRI customers or appoint sub-distributors.
A number of importers distribute to the wet market. Wet markets carry lower value cuts of pork
and beef, and other products such as: poultry, fruits and vegetables, dried peas, lentils and other
A select number of importers distribute to retailers. There are some HRI customers that buy
from retailers due to situations such as stocks running out before the next delivery, difficulty
obtaining credit and difficulties meeting the minimum order required for products to be
For perishable and temperature-sensitive products, it is important to select an importer that has
the capacity to maintain cold-chain storage and transportation. If possible, products should be
packed to withstand extreme heat and humidity.
Expect higher volume of orders from September to December as importers stock-up for the
Christmas season (which is marked by higher consumer spending).
Small to medium size exporters should work with the appropriate U.S. State Regional Trade
Group (SRTG) to take advantage of the SRTG’s resources for marketing and promotional
support in major export markets. The four SRTGs are non-profit trade development
organizations that help U.S. food producers, processors and exporters sell their products
overseas. They are jointly funded by USDA's Foreign Agricultural Service (FAS), the individual
state departments of agriculture and private industry. The SRTGs provide export assistance to
companies located in their geographic region through a variety of export programs and
integrated marketing services. To learn more services available from the SRTGs, find the SRTG
for your geographic region in the list below and visit the website.
Western U.S. Agricultural Trade Association (http://www.wusata.org/)
Southern U.S. Trade Association (http://www.susta.org/)
Food Export-Midwest (previously named MIATCO) (http://www.foodexport.org/)
Food Export-Northeast (Previously named Food Export USA)
Philippine HRI Distribution Channel Flow Diagram
Major Food Shows in the Philippines Websites Dates
International Food Exhibition http://www.ifexphilippines.com May 16-19,
Philippines (IFEX) 2013
Note: FAS Manila will organize a USA
Pavilion at IFEX Philippines in 2013
Manila Food and Beverage Expo http://www.worldbex.com June 2013
World Food Expo, Manila (WOFEX) http://filsites.com/wofex August 7-10,
Note: FAS Manila will endorse this show 2013
Food and Drinks Asia http://www.foodanddrinksasia.com.ph September
Asia Food Expo (AFEX) http://www.afex.com.ph September
Philippine Food Expo (PhilFoodEx) http://www.philippinefoodexpo.com/ February
V. Foodservice Sub-Sector Profiles
The Philippine HRI sector sales were estimated at $4.25 billion in 2012. Restaurants were the top
contributors with $3.7 billion (87%), hotels and resorts with $377 million (9%), and catering and other
food service institutions with $163 million (4%) in estimated gross sales.
Hotels and Resorts
There are approximately 4,500 hotels and resorts throughout the Philippines that cater to local and
international tourists. Approximately 4.5 million foreign tourists visited the Philippines in 2012, a 15
percent increase over the previous year. Since 2009, the number of foreign tourists visiting the country
on an annual basis has increased by 83 percent. As roughly 30 percent of all Philippine hotel and resort
transactions are accounted for by food and beverage sales, the strong growth in tourism has had a
significant impact on the HRI food service industry.
Major Hotels and Resorts in the Philippines 2011 Estimated f&b Location
Sales in US$
Shangri-la Hotels and Resorts 51M Boracay
Sofitel Hotel 10.8 M Pasay, Manila
Manila Peninsula 8.7 M Makati City
Waterfront Hotels 6.9 M Cebu City,
(Waterfront Cebu City Hotel and Casino, Waterfront Davao City,
Manila Pavilion, Waterfront Airport & Casino, Mactan, Cebu
Waterfront Insular Hotel, G Hotel) Manila
Manila Mandarin Hotel 6.6 M Makati City
Waterfront Hotels 6.5 M Mactan, Cebu
Dusit Thani Hotel 6.3 M Makati City
Crown Regency Hotels & Resorts 6 M Makati
Intercontinental Hotels Group 5.55 M Makati City
(Manila Intercontinental Hotel, Mandaluyong
Holiday Inn Resorts and Hotels, City
Crowne Plaza Hotels and Resorts) Clarkfield,
Source: FAS Manila Analysis based on Philippine Business Profiles 2010-2011
A more extensive list of hotels and resort in Metro Manila and key provincial cities are available at:
http://www.philsite.net/manila-hotels.htm and http://www.asiahotels.com/.
According to the 2011 Annual Survey of Philippine Business and Industry on Hotels and Restaurants,
the number of restaurants (including fast-food chains, casual dining outlets, cafes and bars) grew from
72,200 outlets in 2007 to 80,000 outlets in 2011, an increase of 11 percent. It is anticipated that the
number of restaurants will continue to grow by two to five percent annually as the Philippine economy
continues to strengthen and major shopping malls throughout the country continue to flourish.
Major Restaurants and Fast Food Chains in the 2011 Estimated Sales in Outlets Name,
Philippines US $ Type, &
No. of Outlets
Greenwich - 204
Chowking - 381
Jollibee Foods Corporation 1 Billion
Red Ribbon - 207
Mang Inasal - 436
Burger King - 24
Golden Arches Development Corp. (McDonald's) 251 Million 293
Pizza Hut – 156
Philippine Pizza, Inc. (Pizza Hut) 92 Million Taco Bell – 3
Dairy Queen - 36
International Family Food Services, Inc.
47 Million 131
Pancake House -51
Dencio’s – 16
Pancake House, Group 22 Million
Singkit – 7
Le Coeur De France
Kabisera - 3
23 Million 49
Max’s Fried Chicken
24 Million 126
Yellow Cab Food Corp.
23 Million 87
Teriyaki Boy Group
15 Million 36
Italianis – 16
Bistro Italiano Corp. 11 Million T.G.I. Friday’s – 15
Fish & Co. - 4
Source: Company Websites, Top 10,000 Corporations 2010-2011
Institutions include food caterers for private and corporate functions, food operators (in schools, offices
and hospitals) and airline food catering companies. A list of major food operators and catering service
companies can be accessed through this site: http://www.fcap.com.ph/directory.html
Major Airline 2011 Capacity Website: No. of
Catering Estimated (meals/day) Airline
Companies in the Sales in US$ Customers
MacroAsia 17 M 10,000 www.macroasiacatering.com 20
Miascor Aviation 9 M 7,000 www.miascor.com 35
Cebu Pacific 2 M 2,000 www.macroasiacorp.com/cpcs/ 5
Source: Company Websites
VI. Product Prospects for Food Service Market
Based on industry interviews, roughly 25 percent 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 2013 (and beyond) across a wide spectrum
of products, with some of the fastest growth potential in convenience, gourmet, and “healthy, natural,
and organic” categories.
GOOD PRODUCT PROSPECTS for 2013
Beef Wines Preserved Fruits & Pie Fillings
Pork Craft Beers IQF Fruits & Vegetables
Lamb Tree Nuts Fruit & Vegetable Juices
Chicken and Turkey Cheeses and Dairy Products Frozen Potatoes (new cuts)
Gourmet Products Fresh Fruits and Vegetables Dehydrated Potatoes
VII. Further Information and Assistance
FAS Manila is ready to help exporters of U.S. food and beverage products achieve their objectives in
the Philippines. For questions, further information or for assistance in exporting U.S. food & beverage
products, please contact:
Foreign Agricultural Service
U.S. Department of Agriculture
Embassy of the United States of America
25/F Ayala Life-FGU Building
6811 Ayala Avenue
Makati City 1203
Tel: (632) 894-5363 or 894-5379
Fax: (632) 812-5430