Field notes

Singapore brands feed Filipinos' growing love for eating out

Coming of age of millennials and consumer spending boom quicken change in lifestyles

At Bonifacio Global City (BGC), a sprawling financial district east of central Manila, dozens of restaurants line both sides of the outdoor dining strip in Forbestown Road.

Prices at the 300m-long enclave are a bit steep for the average Filipino worker. A cup of gelato costs 155 pesos (S$4.30), a bowl of ramen is 455 pesos, and it costs up to 3,500 pesos for a plate of premium Angus beef. Yet, the restaurants are packed every day, drawing diners from the tens of thousands of workers, tourists and residents who occupy BGC's high-rises.

Among the outlets where tills constantly ring is Singapore's Casa Italia. With its pastel-coloured gelatos, Italian furniture and chessboard floor, it opened to long lines in December 2015, and continues to do brisk business.

The restaurant lived up to its promise, said Mr Mark Jefferson Co, Casa Italia's 30-year-old master franchisee in the Philippines.

It also opened at the right place and the right time.

A familiar sign (above) for Singaporeans at Makansutra Hawkers, which has been drawing customers since it opened last year. Mr JJ Yulo (left) is chef and part-owner of Makansutra Hawkers, a 12-stall, kopitiam-style restaurant at a corner of Manila's
Mr Mark Jefferson Co, Casa Italia’s master franchisee in the Philippines, says Filipinos are eating out more to get a taste of what is new. ST PHOTO: RAUL DANCEL

  • US$8.2b Approximate amount that the 82,000 restaurants in the Philippines, made up of mostly fast-food outlets, rake in in a year.

    US$2.9b Sales forecast this year for the full-service restaurant sub-sector, which is growing at 4.7 per cent a year.

SHIFTING TASTES

While we are deeply in love with mum's cooking, restaurants are where the game is these days.

MR JJ YULO, chef and part-owner of Makansutra Hawkers, located in one of the Philippines' largest malls.

Filipinos have been spending more on eating out for the past 10 years, when the Philippine economy took off on a prolonged bull run that shows no signs of abating.

That shift has quickened with the coming of age of millennials.

Said Mr Co: "They eat out more so they can get a taste of what's new.

"Almost all those who work at call centres are willing to spend rather than take food with them to work."

The phenomenon has not gone unnoticed by Singapore's top food brands. Several have set foot in this promising market, even as some contend with slowing business back home.

BreadTalk opened its first Philippines store in 2004, and brought in the Toast Box brand in 2007.

Wee Nam Kee began serving Hainanese chicken rice in 2010, while rival Boon Tong Kee joined the party two years later.

Brotzeit introduced its German fare in 2013. Then came Casa Italia.

Last year, Makansutra Hawkers - a 12-stall, kopitiam-style restaurant - began receiving customers at a corner of Manila's largest mall.

Mex Out, a Mexican food chain, is on the lookout for a local partner.

GROWING APPETITE

Years of downturn-defying growth, averaging 6 per cent a year, are fuelling a consumer spending boom in the country of 103 million people.

Money is also pouring into the Philippines.

Cash sent home by overseas Filipinos grew to a record US$26.9 billion (S$37.6 billion) last year, up from US$25.6 billion in 2015.

Filipinos are spending the bonanza on everything from mobile phone top-ups to luxury condominiums and, of course, food.

The outsourcing industry, meanwhile, added another US$25 billion to the Philippine economy.

By 2020, its contribution to the economy is forecast to surge to US$48 billion. All that money is fuelling a consumer-spending boom that is powering growth in the Philippines, whose gross domestic product grew 6.8 per cent last year - the fastest in Asia.

"The Philippines' consumption expenditure as a percentage of gross domestic product is 74 per cent, one of the highest in Asean," said Mr Ivan Tan, IE Singapore's group director for South-east Asia and Oceania.

"Coupled with the fact that many Filipinos are open to trying new concepts because they are more well-travelled and exposed to the global markets, there are many opportunities for Singapore food companies," he told The Straits Times.

That growing preference for the chef's table is driven, in part, by a changing urban lifestyle emerging from a new-found sense of prosperity. Many in metropolitan Manila live in condominiums and small apartments nowadays, so they can be nearer to their offices.

A familiar sign (above) for Singaporeans at Makansutra Hawkers, which has been drawing customers since it opened last year. Mr JJ Yulo (left) is chef and part-owner of Makansutra Hawkers, a 12-stall, kopitiam-style restaurant at a corner of Manila's
Mr JJ Yulo (left) is chef and part-owner of Makansutra Hawkers, a 12-stall, kopitiam-style restaurant at a corner of Manila’s largest mall. ST PHOTO: RAUL DANCEL

"You know how it's like cooking in condos. It's too small," said Mr Richard Co, a Filipino food blogger with over 17,000 followers on Instagram. Heavy traffic around office districts also drives more people to eat out. He added: "After work, it takes you 21/2 hours to go home. What time will you reach home - 7.30pm, 8pm? And you still have to cook?

"Some just eat out, wait out the traffic, and then go home."

More Filipinos can also afford to travel now, he said. "They're more exposed to food from different countries. Singapore food is not so foreign any more, compared with 15 years ago."

Mr Vladimir Bonoan, an online food critic with TV network ABS-CBN, said: "Food crazes like ramen, poke (Hawaiian raw fish salad) and Peruvian cuisine are global trends. We're willing to queue for what's trendy. So it helps if it's popular abroad."

TOUGH MARKET TO CRACK

It has not been a home run for all Singapore entrants, though.

Bistro du Vin, the Les Amis group's foray into the Philippines, opened an outpost at a high-end mall in 2014, but has since closed it due to underwhelming footfall.

Cost is also a perennial challenge.

Mr Tan said the price of entry, to start with, remains too high for most Singapore hawkers.

A food retailer planning to set up shop here needs at least US$2.5 million in paid-up capital.

A familiar sign (above) for Singaporeans at Makansutra Hawkers, which has been drawing customers since it opened last year. Mr JJ Yulo (left) is chef and part-owner of Makansutra Hawkers, a 12-stall, kopitiam-style restaurant at a corner of Manila's
 A familiar sign (above) for Singaporeans at Makansutra Hawkers, which has been drawing customers since it opened last year. ST PHOTO: RAUL DANCEL

It is also not cheap to run a restaurant here. A small, one-man hotdog stand at a giant grocery chain in Manila can cost up to 45,000 pesos a month to lease.

"I'm paying with my left arm, plus a little bit of my belly, to keep this place open," joked Mr JJ Yulo, chef and part-owner of Makansutra Hawkers.

Paying for staff and sourcing supplies also do not always come cheap, yet restaurants must keep prices at a level that customers can stomach.

"There's a sweet spot for pricing. For a mall restaurant like us, it's 200 pesos to 250 pesos during lunch time, and 300 pesos to 350 pesos for dinner," said Mr Yulo.

Any higher, and customers tend to walk away. Still, the rewards are there for those with the right brew.

A familiar sign (above) for Singaporeans at Makansutra Hawkers, which has been drawing customers since it opened last year. Mr JJ Yulo (left) is chef and part-owner of Makansutra Hawkers, a 12-stall, kopitiam-style restaurant at a corner of Manila's
ST PHOTO: RAUL DANCEL

There are about 82,000 restaurants in the country, mostly fast-food outlets, which rake in about US$8.2 billion a year.

The full-service restaurant sub- sector has been growing at 4.7 per cent a year, with sales forecast to hit US$2.9 billion this year.

"While we are deeply in love with mum's cooking, restaurants are where the game is these days," said Mr Yulo.

He thinks Singapore has something going for it when, as he was queueing at a food stall, he heard the woman beside him sigh as a bowl of prawn mee was put on her tray. Then he overheard her say, "God, I miss Singapore."

He said: "I got emotional for her… She was really taking it all in."

A version of this article appeared in the print edition of The Straits Times on April 29, 2017, with the headline 'S'pore brands feed Filipinos' growing love for eating out'. Print Edition | Subscribe