BANANAS will continue to be the top choice of fruit among Filipino households, as prices remain low compared with imported fruits. — PHILIPPINE STAR/ MICHAEL VARCAS
FILIPINOS are likely to spend over a third of their household budget on food by 2025, as they buy more meat and poultry products while cutting back on rice consumption, according to Fitch Solutions Country Risk & Industry Research.
“The average Filipino household will spend 34.5% of the total household budget on food in 2025, increasing by 4.8 percentage points from 29.8% in 2006,” Fitch Solutions said in a note titled “Philippines Dietary Shift Analysis” on Monday.
Fitch said the average Filipino household can afford more than just basic food items, as wages and disposable income rise.
The number of Filipino families with an annual disposable income of $10,000 (approximately about P478,000) will rise to 37.7% of the total in 2025, from 3.9% in 2006, it said.
This scenario is based on the nominal wages growing by an annual 5.8% to an average of P13,487 in 2018 from P6,381 in 2006, Fitch Solutions said citing data from the Philippine Statistics Authority.
“Over this period, we note that food spending will grow by an annual average of 8.9% compared to the annual average inflation rate of 3.5% over the same period, indicating real growth in food spending over this period. As a result, there are several instances of shifts in dietary spending stemming from income growth, with consumers spending a lesser proportion of their food spending on staple food items such as rice, instead opting for animal protein,” Fitch Solutions said.
The average Filipino family is expected to spend more than half of its food budget on meat and poultry; fish and seafood; and bread, rice and cereals by 2025.
Filipinos will likely buy less of bread, rice and cereals, with the food category’s share in total food spending falling to 20.4% in 2025, from 36% in 2006, Fitch said.
Spending on fish and seafood products will rise to 24.2% of total food spending from 12.7% in 2006, while meat and poultry will account for 22.3% of the budget from 17.5% in 2006.
“We highlight that the large increase in spending on fish and fish products is due to its relatively low price compared to other animal protein,” it said.
Fitch Solutions noted per capita consumption of meat and rice is expected to rise to 36.6 kilograms (kg) and 130.7 kg, respectively, “highlighting how meat is increasingly taking a larger portion of per capita consumption.”
“Additionally, we note that the average Filipino meal serving size will increase by 10.6% in terms of total rice and meat consumed. This signifies how the average Filipino is consuming more calories, as their disposable incomes increase,” it said.
Filipino households are still expected to be among the top rice consumers in the region, but spending on rice as a share of total food spending will steadily drop to 13% in 2025, from 25.8% in 2006.
Fitch Solutions noted Filipino consumers will be diversifying their diets by adding more meat, vegetables and fruits.
Beef spending will see “insignificant growth” due to much higher prices and quicker yearly inflation, it said.
Meat products, particularly pork, became a major factor to quicker inflation in recent months amid the African Swine Fever outbreak that has caused supply disruption.
Meanwhile, Filipino households are also expected to buy more fresh and preserved fruits, with bananas maintaining the biggest share in spending.
Fruits will likely make up 5.9% of total food spending in 2025, from 3.3% in 2006.
“The Philippines has a large domestic banana farming sector, resulting in much cheaper prices, compared to other fruits domestically. As such, bananas are a cheap and widely available source of fruit of Filipino households to meet recommended daily fruit intakes,” the think tank said. — Luz Wendy T. Noble