Food and beverage

The EU food and beverage industry recognizes ASEAN, and the Philippines in particular, as a high growth market with substantial growth potential. Indeed, the food and beverage industry, along with other fast moving consumer goods, has been one of the drivers of Philippine economic growth in the past years.

As the sector has expanded, the regulatory and policy frameworks have also been substantially improved. Indeed, the adoption of many of the Codex Alimentarius standards in September 2014 by the Food and Drug Administration (FDA) and the introduction of e-registration for CPR are notable improvements.

However, as the sector continues to grow, operational and policy gaps which serve as a barrier to trade and a threat to consumer safety need to be addressed. Smuggling and parallel importation are highlighted as two of the major concerns for luxury brands, while the need for improvements in the importation and registration process is also noted as a priority. A less burdensome fiscal framework and an increased emphasis on consumer health as a result of nutrition are also high on the agenda.

The ECCP Food and Beverage Committee is cooperating closely with relevant government bodies, including the FDA, in the past years to jointly work towards mutually beneficial improvements to the regulatory process and policy framework governing food and beverages, in a constructive public-private partnership. We look forward to continued cooperation, with the following recommendations as guidance to the improvements we hope to achieve.

I. Improvement of the registration and regulation process

II. Improvements to the fiscal environment for alcoholic beverages

III. Enforcement of anti-smuggling measures and implementation of the National Single Window

IV. Protection of Geographic Indications

V. Creation of a Philippine platform for consumer health, diet and physical exercise

Market data:

In 2015, consumption expenditure in the Philippines amounted to over PHP9.8 trillion, registering a 6.2 percent growth rate. The Philippine retail sector’s main growth driver is derived from food consumption. Food and non-alcoholic beverages accounted for 40 percent of total household consumption expenditure in 2015, amounting to PHP4.1 trillion.

In 2014, 36 percent of the population bought Fast Moving Consumer Goods (FMCG) through modern trade channels and concurrently, there has been a rapid expansion of supermarkets and convenience stores (modern trade) but a decline in the demand in wet markets (traditional trade).

Large grocery trading still has the largest impact on Philippine retailing for the Food and Beverage (F&B) sector, as major retailers continuously expand nationwide through modern channels. From 2011 to 2014, over 835 new convenience store outlets were opened. Over the same period, over 210 supermarkets and 97 small format supermarkets were also set up. 

The Philippines’ food and beverage processing industry also opened the following major sectors: fruits and vegetables, meat and poultry, dairy, seafood products, coffee and cacao, condiments and seasonings, fats and oils, bakery products, sugar and confectionery, and beverages.

Food manufacturing topped the manufacturing industry sector during Q1 2015 with a gross added value, at current prices, of PHP326 billion, up 5.5 percent from 2014 according to the report of PSA (2015) on Gross National Income & Gross Domestic Product by Industrial Origin, Retrieved as of 5 December 2016.

Philippine food exports to the EU in 2015 were valued at EUR815 million, up from EUR728 million in 2014. Food imports from the EU were valued at EUR849 million, compared to EUR899 million in 2014as reported by the EU Delegation to the Philippines (13/04/2016) in Philippines- Economic and Trade Report 2015 published in Manila.

In May 2016, the FDA applied a new application process for the License to Operate, with the issuance of the Circular “Procedure on the Use of the New Application Form for License To Operate (LTO) thru the Food and Drug Administration (FDA) Electronic Portal (e-portal)" (FDA Circular No. 2016-004). The FDA also issued guidelines on the unified licensing requirements and procedure of the FDA (FDA Circular No. 2016-003).

Additionally, e-registration was expanded to applications for CRP for medium and high risk food products by the FDA in the first half of 2016.

We strongly support the operationalization of a National Single Window that is a fully automated, fully interactive interface which facilitates efficient and effective alignment and coordination between the BOC and key government agencies, including but not limited to the FDA and the BIR. The measure will address the lack of coordination between government agencies, and thus serve as an effective tool against the smuggling and parallel importation of alcoholic beverages into the Philippine market.

Companies in Cebu belonging to this sector should join the European Chamber of Commerce of the Philippines (ECCP) to become part of the changes we are advocating to support growth of this important industry.