Boston, MA -- (SBWIRE) -- 01/07/2014 -- While the Philippines' economy continues to expand at a healthy rate and despite its expanding base of young consumers, we believe that the country offers limited potential in its grocery and food and drink markets. Multinational investment has been slow to penetrate the market, which in itself continues to present numerous challenges to players in the sectors. Issues such as widespread poverty, highly uneven income distribution, under-developed mass grocery retail networks and high levels of unemployment will continue to weigh on the consumer outlook.

Headline Industry Data (local currency)

- 2014 per capita food consumption = +5.98%; compound annual growth rate (CAGR) forecast 2014 to 2017 = +4.54%
- 2014 alcoholic drinks value sales = +7.41%; CAGR growth forecast 2014 to 2017 = +4.99%
- 2014 soft drinks value sales = +7.76%; CAGR growth forecast 2014 to 2017 = +5.87%
- 2014 mass grocery retail sales = +6.94%; CAGR growth forecast 2014 to 2017 = +5.13%

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Industry Developments

LT Group Raises $912 Million in Philippines's Largest Equity Sale

Filipino billionaire Lucio Tan's LT Group Inc. raised PHP37.72 billion (US$912.2 million) in the country's largest ever equity sale, benefiting from a stock market that has boomed just weeks after the country received an investment-grade rating.

The conglomerate's private-placement sale, which was announced in 2012, followed other large share sales in the region in recent months. It attracted strong interest from beyond Asia, sole book runner and lead issue manager UBS AG said, demonstrating investors' appetite for Philippine assets. The offer was priced at the top end of an indicative range of PHP18 to PHP20.50 a share, and the company exercised an overallotment option to issue a total of 1.84bn shares, UBS said. The sale attracted 11 cornerstone investors and the order book totalled US$3.5bn. UBS said 23% of the funds came from Europe, 36% came from the US, and 41% came from Asia. It did not provide details on the cornerstone investors.

Coca-Cola FEMSA Continues Philippines Expansion

Coca-Cola FEMSA, the world's biggest bottler of Coca-Cola, is to invest PHP1.2bn (US$32.4mn) in the Philippines in order to boost its manufacturing capabilities within the country. The PHP1.2bn investment is the latest in Coca-Cola FEMSA's expansion drive into the Philippines, with the company acquiring a 51% stake in Coca-Cola Bottlers Philippines in January 2013 for US$688.5mn.

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