Trade Secretary Alfredo Pascual said Tuesday the Philippines is now the seventh largest franchise market in the world as he underscored the contribution of the sector to the local economy.
Pascual said the country’s retail and service franchises shared 7.8 percent to the gross domestic product and created 2 million direct and indirect jobs.
“The Philippines is the 7th largest franchise market in the world. With a growing middle class, our country is considered one of the largest franchise markets in the Southeast Asian region,” said Pascual at the opening of Franchise Asia Philippines 2022.
The Philippine Franchise Association expects the local franchising sector to be the 5th biggest in the world in the next five years.
PFA president Chris Lim confirmed the Philippines is now the 7th biggest market for franchising, after South Korea, the US, India, Taiwan, Brazil and France.
Pascual said food makes up 43 percent of the estimated 1,800 franchise brands in the Philippines. Citing industry data, he said food franchises have an aggregate value of P538 billion or $10.8 billion.
“The non-food service and retail subsectors each serve close to one-third of franchise brands in the country―service accounts for 29 percent of franchise brands in the Philippines, and retail, for 28 percent,” he said.
The DTI encouraged investors to set up franchises in the Philippines because of the healthy business environment.
“Pandemic or not, the Philippine food service sector is growing as demand for convenience grows. The liberalized retail trade landscape and, to some extent, the reduction of import duties have contributed to the growth of the food service sector,” Pascual said.
Food accounts for nearly half of the manufacturing output, growing at an average annual rate of 8 percent to 10 percent owing to the country’s strong consumer base.
About 90 percent of the food and beverage processing industry’s output is consumed domestically. The growing consumption also contributes to the rapid expansion of the processed F&B subsector.
The DTI said this trend presents excellent opportunities for raw material and high-value ingredient producers.