GROWTH in the Philippine food and beverage sector is projected to slow to 6% this year with the end of the “revenge spending” cycle, according to the United States Department of Agriculture (USDA).
“Strong domestic demand anchored to sustained food and beverage spending should lead to increased food and beverage retail sales,” the USDA said in its report.
The 2023 projection marks a slowdown from the “unexpected” 8% growth last year with sales reaching $33 billion.
“With lower unemployment rates this year, household income growth is set to outpace consumer price inflation,” the USDA added.
June inflation slowed to 5.4% from 6.1% in May, the lowest level in 14 months, which the Philippine Statistics Authority (PSA) attributed to easing food and transport prices.
In food services, the USDA said the revival of tourism and hotel activity will help drive growth.
“Dining in restaurants, catering, and events will continue to contribute to the growth, while food deliveries provide convenience,” the USDA said.
“As tourism, events and dining-in thrive, more hotels and restaurants will buy in bulk (compared with) households,” it said.
The PSA said household consumption rose to 8.3% in 2022 from 4.2% in 2021, driven by restaurant and hotel spending.
“While most consumers have returned to buying from brick-and-mortar stores, food and beverage e-commerce sales continue to grow as a niche market, showing potential for imported products,” it added.
The USDA projected slower growth for convenience stores, groceries, hypermarkets, and warehouse clubs, also due to the end of “revenge spending.”
“As more consumers spend prudently, food and beverage inflation declines,” it added.
The USDA noted that the Philippines presents “a substantial opportunity” for US processed food, with the country becoming the seventh-largest market for the US last year.
US consumer-oriented exports to the Philippines were the highest in Southeast Asia last year at $1.6 billion. — Sheldeen Joy Talavera