Driven by a rapidly growing middle class and strong reputation for quality, U.S. food and beverage (f&b) exports to the Philippines increased 27 percent in 2011 to a record $761 million.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number:
Philippines - A Top Market for U.S. Foods and Beverages in
Food Processing Ingredients
Philip A. Shull
Maria Ramona C. Singian
Driven by a rapidly growing middle class and strong reputation for quality, U.S. food and beverage
(f&b) exports to the Philippines increased 27 percent in 2011 to a record $761 million, and are expected
to reach $850 million in 2012. The Philippines continues to be the largest f&b market in SE Asia and
one of the fastest growing markets in the world for this high value, job generating sector. FAS Manila
expects the U.S. will remain the Philippines? top supplier of a wide variety of f&b products. More
importantly, this healthy export growth is broad-based, with 13 of the 16 items that comprise the f&b
category achieving record sales. Top U.S. exports were dairy products, red meats, poultry meat, snack
foods, and processed fruits & vegetables. While sales for all f&b products are expected to remain
strong, prospects are especially strong for meat and poultry products, and for products that can be
classified as ?healthy,? ?gourmet,? and ?convenient.?
According to U.S. Customs statistics, the Philippines imported $761 million in U.S. food and beverage (f&b)
products in 2011, maintaining its longstanding position as the largest f&b market in SE Asia and one of the
fastest growing markets in the world. Driven by a rapidly growing middle class, a strong reputation for quality,
and an historical preference for U.S. products, FAS Manila forecasts the robust expansion will continue in 2012
to a record $850 million. Already up 80% since 2009, The Philippines is poised to double exports within three
years, well in advance of the 5-year target set by the White House National Export Initiative.
The best news for the U.S. f&b industry is that nearly all the products that comprise this high value, job-
generating sector enjoyed strong growth and record sales. Exceptional increases occurred in eggs & products,
fresh vegetables, dairy products, poultry meat, and red meats. Traders also report rapid growth for ?healthy?
foods, though official data is unavailable as U.S. Customs does not track this category as a separate category.
This remarkable growth extends a steady trend of impressive export achievement that has carried through most of
the decade. Between 2002 and 2011, U.S. f&b sales grew by almost 350 percent.
The Philippines ranked as the12th largest export market in the world in 2011, filling over 19,000 container trucks,
providing support to the 1.8 million American food processing jobs and many more throughout the supply chain.
If compared with the BRIC countries, the Philippines ranked third, following China and Russia. With just 100
million people, the Philippine market for U.S. f&b is over 50 percent larger than that of India with its one billion
Top Ranking Products and Best Prospects
In 2011, record sales were achieved in 13 of the 16 categories that comprise the f&b category. The top five f&b
products in export value were: dairy ($281 million), red meats ($132 million), poultry meats ($70 million), snack
food ($65 million) and processed fruits & vegetables ($62 million). Total f&b exports rose nearly 180 percent
between 2006 and 2011.
The best prospects for U.S. f&b products are: beef, pork, poultry, dairy and cheese products, processed fruits and
vegetables, fresh fruits and vegetables, wine and beer, and snack foods. ?Organic?, ?healthy? and ?convenience?
foods are also expected to experience especially rapid growth.
Note: ?Gourmet?, ?healthy? and ?convenience? products are experiencing excellent
growth and prospects but are not identified as by individual customs statistics.
Fast Facts and Figures
The Philippines is the largest export market in Southeast Asia for U.S. cheese products and the 4th
largest market in the world for total U.S. dairy exports. Traders report significant growth in both
standard and gourmet cheeses. The largest U.S. dairy product export by far is non-fat dry milk
(NFDM), which increased 28 percent in 2011. Consumers and the burgeoning Philippine food
processing industry are major purchasers of NFMD. The U.S. is the second largest dairy supplier to the
Philippines, behind New Zealand.
While New Zealand and Australia will enjoy tariff advantages of 1-7% on milk powder, cheese, whey
and buttermilk as a result of the ASEAN-Australia-New Zealand Free Trade Agreement, currency
fluctuations can also play a significant role in the competitiveness of U.S. products.
Rising demand for pork drove Philippine imports to a record level of 39,597 MT in 2010. The volume
dropped by 26 percent to 29,204 MT in 2011 when exports of pork to retail markets were hurt by trade
restrictive regulations on the sale of frozen meat in the wet markets as well as rising prices of U.S. pork.
Exports of pork variety meats which peaked in 2009 due to low U.S. prices dropped precipitously in
2010 and 2011 as prices rose due to strengthening demand in other Asian markets and trade barriers.
Agreement to remove most of these barriers reached in March 2012 should allow rapid recovery of
these sales. Exports of higher value cuts and prepared/ preserved pork products to supermarkets, hotels
and restaurants remained strong.
U.S. beef exports continued their strong growth, rising 47 percent by value in 2011 as U.S. prime rib
and other high-value cuts become standard menu offerings in restaurants and hotels.
The Philippines is the 2nd largest poultry meat market in Southeast Asia with export sales of $70 million
in 2011 and has grown by almost 400 percent since 2006.
Processed Fruits & Vegetables
Export sales of processed fruits & vegetables, more than half of which are frozen potatoes reached
record level sales of $62 million in 2011, and grew by almost 50 percent since 2006. The Philippines is
the 2nd largest market in Southeast Asia for frozen potatoes.
Wine & Craft Beer
The Philippines is the 2nd largest market in Southeast Asia with export sales of $8 million in 2011. The
U.S. remains as the largest supplier to the Philippines with a 35 percent share of the market. There is a
niche market for craft beer that is gaining momentum.
In 2009, the White House announced the National Export Initiative (NEI) to double exports by 2014. From
2009-2011, U.S. f&b exports to the Philippines have made strong progress toward achieving that goal, up an
estimated 80 percent. By the end of 2011, exports of dairy products, fresh vegetables and nursery products had
already more than doubled. Post projects that f&b exports will achieve the NEI goal in 2012, and that most
products in this category will have doubled by 2014.
Legend: - Products that have achieved NEI Goal
- Products that are expected to achieve NEI Goal by 2014
Further Information and Assistance
The FAS Manila staff 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 US food & beverage products,
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