U.S. 2012 food and beverage (f&b) exports to the Philippines surpassed 2011 sales by 13% to a record $859 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:
U.S. Food & Beverage Exports to the Philippines Achieve
NEI Goal in 2012; Excellent Prospects for 2013
Market Development Reports
Philip A. Shull
Maria Ramona C. Singian
U.S. 2012 food and beverage (f&b) exports to the Philippines surpassed 2011 sales by 13% to a record $859
million. By doubling 2009 levels in 2012, exporters achieved the White House National Export Initiative (NEI)
five-year target a full two years early. Driven by a thriving economy, a rapidly growing middle class, and a
strong reputation for quality, this impressive export achievement has carried through most of the decade. In the
past ten years, U.S. f&b sales more than quintupled. More importantly, the export growth is broad-based, with
10 of the 16 products that comprise the f&b category achieving record sales. The top U.S. exports were dairy
products, meat & poultry, snack foods, and processed fruits & vegetables. While 2013 sales for these products
are expected to remain strong, prospects are excellent for a wide variety of f&b products, particularly those that
can be classified as “healthy,” “gourmet,” and “convenient.” FAS Manila expects the U.S. will remain the
Philippines’ top supplier of most f&b products, and forecasts export sales will grow tantalizingly close to $1
billion in 2013. With tiny “mom-and-pop” stores still taking 70 percent of national retail food sales, U.S. f&b
exports to the Philippines could re-double by 2017.
In 2012 the Philippines maintained its longstanding position as the largest market in Southeast Asia
for U.S. f&b products, and as one of the fastest growing markets in the world. Using trade estimates
that an average 40-ft container carries $40,000 worth of goods as a guide, U.S. f&b exports to the
Philippines in 2012 filled over 21,500 trucks. These exports not only provide support to 1.8 million
American food processing jobs and many more throughout the supply chain. Similarly, those
exports also supported food processing, distribution and retail/hospitality jobs in the Philippines.
If compared with the BRIC countries, the Philippine market ranks third, following China and Russia.
With just 100 million people, the Philippine market for U.S. f&b products is 65 percent larger than
that of India with its population of 1.2 billion.
In 2012, U.S. f&b exports to the Philippines more than doubled 2009 levels, two years ahead of the
White House National Export Initiative (NEI) target. While exports of dairy products and poultry
meat were the largest gainers, export growth has been remarkably broad-based. The chart below
shows record sales were achieved by 10 of the 16 products that comprise the f&b category, and that
most f&b products will achieve NEI goals by 2013.
Top Ranking Products in 2012 and Good Prospects for 2013
According to U.S. Customs statistics, the top five f&b product categories by value in 2012 were:
dairy products, red meats, poultry meat, snack foods and processed fruits & vegetables. The top five
f&b products that led the growth in 2012 were: poultry meat, fresh fruit, tree nuts, egg & products
and dairy products.
Note: “Gourmet”, “healthy” and “convenience” products are experiencing excellent growth and have
good prospects, but are not defined by U.S. Customs.
With most analysts projecting continued growth in the Philippine economy and the Filipinos’
penchant for spending on food, FAS Manila projects continued growth in U.S. f&b exports through
2013 and beyond, with excellent potential in “gourmet”, “healthy” and “convenience” products. In
addition to being consumed directly, many U.S. f&b products (e.g. dairy, dried fruits and tree nuts)
are being used by the Philippines’ burgeoning food processing sector.
Fast Facts and Figures
The Philippines was the 4th largest export market in the world for U.S. dairy products in 2012.
Exports achieved record sales of $316 million in 2012, and quadrupled since 2009. The largest U.S.
dairy product export to the Philippines is non-fat dry milk (NFDM). Consumers and the burgeoning
Philippine food processing industry are both major purchasers of NFDM. Despite the 18 percent drop in
exports of U.S. NFDM due to higher prices, this decline was more than offset by huge increases in sales
of U.S. yogurt and whey. Yogurt is an example of the explosive growth that is possible in the Philippine
market, rocketing from near zero in 2009 to over $53 million in 2012.
The Philippines is also a key market in Southeast Asia for standard and gourmet U.S. cheese products.
While cheese exports declined by five percent in 2012, traders are optimistic about the growing market
potential of the product due to the booming Philippine economy. Standard cheeses dominate total sales,
but gourmet cheeses are gaining in popularity, and command very high prices (e.g $20-30/lb).
The U.S. is the second largest dairy supplier to the Philippines, following New Zealand. While New
Zealand and Australia enjoy tariff advantages of 1-7 percent 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 in 2010. The volume dropped in
2011 when pork exports were hurt by trade restrictive regulations on the sale of frozen meat in the
wet markets as well as rising U.S. pork prices. Exports of pork variety meats peaked in 2009 due to
low U.S. prices but dropped precipitously in the following years due to strong demand in other Asian
markets and trade barriers. Agreement to remove most of these barriers was reached in March 2012,
allowing sales to begin to recover. Exports of higher value cuts and prepared/preserved pork
products to supermarkets, hotels and restaurants are expected to continue strong growth.
U.S. beef exports have been especially robust, rising 21 percent by value in 2012 as U.S. prime rib
and other high-value cuts became a standard menu offering. The growth is expected to continue as
incomes rise, and the number of finer dining options proliferate throughout the country.
The Philippines is the largest market in Southeast Asia for U.S. poultry. Exports achieved record
sales of $87 million in 2012, and more than doubled since 2009. While a growing market for nearly
all categories, the trade estimates mechanically deboned meat (MDM) for use in the meat processing
industry comprised roughly 75 percent of U.S. poultry exports in 2012.
The Philippines is the 6th largest market in the world and the largest market in Southeast Asia for
U.S. snack foods, consisting mainly of corn chips, chocolates, potato chips, sweet biscuits, popcorn
Processed Fruits and Vegetables
Exports of processed fruits & vegetables achieved record sales of $69 million in 2012, up by almost
90 percent since 2009. The Philippines is the 7th largest market in the world and the largest market
in Southeast Asia for U.S. frozen potatoes. At the same time, there are excellent opportunities for
many products in this category. The chart shows lines sold to both retailers and food processors
have doubled and even quadrupled in recent years.
Further Information & Assistance
FAS Manila is ready to help exporters of U.S. food and beverage products achieve their objectives in
the Philippines. For further information or assistance in exporting U.S. agricultural products, please
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