American traders are optimistic that shipments of agricultural products from the United States to the Philippines will expand by 10 percent this year, according to the latest Global Agricultural Information Network (Gain) report.
The Gain report prepared by the US Department of Agriculture’s (USDA) Foreign Agricultural Service in Manila said shipments of American farm products to the Philippines expanded by 14 percent year-on-year to $2.9 billion last year.
“The Philippines’s rapidly expanding food and beverage processing industry presents robust opportunities for US exporters of agricultural raw materials and high-value ingredients,” the Gain report read.
“About 65 percent of total US agricultural exports to the Philippines flow through the food and beverage processing industry,” it added.
The report noted that the Philippines’s rapidly expanding production of processed foods and beverages presents “robust” opportunities for US exporters of agricultural raw materials and high-value ingredients.
Philippine food manufacturing is supported by a strong and growing consumer base, according to the report. The country’s population is young as over 50 percent are under the age of 24, and highly urbanized with sophisticated tastes and growing access to modern supermarkets.
This, plus a resilient economy will underpin consumption growth in the coming years, the report added.
Citing data from the Philippine Statistics Authority (PSA), the Philippine food and beverage processing industry’s gross value-added output rose by 7 percent over the previous year to $32.5 billion, and grew 31 percent over the past 5 years.
“While most of the roughly 500 food and beverage processors registered under the Philippine Food and Drug Administration are micro to medium-sized businesses, food and beverage processors are also among the largest corporations in the country,” the report read.
The Gain report projected that exports of Philippine processed food and beverage products will rise due to the continuous improvement in quality. This will also be beneficial for American agricultural raw materials.
“The Philippines’s participation in free trade agreements also provides a valuable path for US agricultural raw materials and ingredients to grow in tandem with Philippine exports and penetrate markets throughout the region,” the report read.
Based on interviews with Philippine food and beverage processors, the top prospects for US agricultural raw materials and ingredients include poultry cuts, mechanically deboned meat, trimmings and beef offal, milk and whey powder, and cheese and other dairy products.
The report indicated that imported agricultural raw materials can be combined with locally available products, such as tropical fruits and vegetables, cacao, sugar and seafood to come up with innovative product offerings.
“The wide acceptance of food processors and consumers have for US raw materials and ingredients is a tremendous advantage for US exporters seeking to develop a market in the Philippines,” it added.
According to the USDA, the US remains as the Philippines’s largest supplier of agricultural products. The Philippines is the 11th largest global export for US agriculture.
The top US agricultural exports to the Philippines in 2018 were soybeans and soybean meal ($957 million), wheat ($628 million), dairy products ($248 million), red meats ($219 million) and poultry ($110 million).