1/10/2018 Meat processors see double-digit growth | BusinessMirror

Meat processors see double-digit growth

By Jasper Y. Arcalas - September 27, 2017

The local meat-processing industry will continue to post double-digit growth as the hike in the income
of Filipinos will allow them to buy more food items, according to the Philippine Association of Meat
Processors Inc. (Pampi).

Pampi Vice President Jerome D. Ong said the industry is growing steadily by at least 10 percent and
may even expand by more than 12 percent as the Philippines’s per-capita GDP nears the $3,500 mark.

“Right now the meat industry is growing by 10 percent to 11 percent already. You see that growth rate
being sustained or may even exceed 12 percent because Philippine per-capita GDP is now at $3,100 in
real terms,” Ong told reporters in an interview on the sidelines of Pampi’s 28th anniversary celebration
held recently in Pasay City.

“There is this so-called inflection point, or tipping point, recognized by most global economies. The
figure is $3,500 per-capita GDP. At that point, many countries started to grow even more rapidly,” he
added.

Based on initial estimates, Ong said sales of the local meat-processing industry have already reached
P300 billion.

“There is a need to validate this figure because P300 billion in sales will mean that the daily
consumption of processed meat by Filipinos amounts to only P8.20 per day, an unbelievably low
amount,” he added.

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Ong noted that despite the growth in the country’s per-capita GDP, the Filipinos’ per-capita meat
consumption remains relatively low compared to its Southeast Asian neighbors.

“I think per-capita consumption in the Philippines is around 30 kilograms, while that of our Asean
neighbors are at 50 kg to 60 kg. Per-capita consumption in the West is around 90 kg to 110 kg,” he
said.

“So that is an upside. The increase in the country’s population and the growing income of Filipinos will
translate to higher demand for protein,” Ong added.

The Pampi official said the industry must be given access to sources of good-quality meat so
companies can maintain the affordability of processed-meat products.

“Our prices for the past five to eight years have remained quite flat and it is because of favorable
exchange rate and availability of raw materials. So, I think, we are doing a decent job [in making our
products affordable],” said Ong, who is also president of CDO Foodsphere Inc.

This, despite the fact that the spread of avian influenza (AI) outbreaks in European countries has
affected their operations in recent months, according to Ong. Meat processors source most of their
raw materials, such as mechanically deboned meat (MDM), from Europe.

“[MDM] concerns continue to prevail, and further aggravated by AI outbreaks in areas where we
source our MDM,” he said.

Industry players said the price of MDM doubled to as much as $800 per metric ton (MT) in the first
quarter. This is due to the closure of Philippine borders to poultry products from most European
countries where there are AI outbreaks.

While the Philippines has reopened its market to MDM from the Netherlands, Ong said the price of
MDM has not gone down significantly. “The price of MDM is still high. It has gone back to around
$650 per MT.”

“Hopefully, by early next year, it goes down some more but we do not see it going back to old level [of
$400],” Ong added.

Philippine meat consumption this year could reach 29.641 kg per capita, higher than the 29.181 kg per
capita recorded last year, data from the Organisation for Economic Co-operation and Development
showed.

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Image Credits: Bloomberg

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Jasper Y. Arcalas
Jasper Emmanuel Y. Arcalas is a graduate of the UST Journalism School (Batch 2016). He currently
covers agribusiness for the BusinessMirror. He joined the news out t in August 2016.

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