Munching On More Confectionery

We are more cautious on the near-term outlook for the Philippine confectionery sector than we are over the longer-term. As highlighted in an earlier article (see 'Softer Demand Conditions In 2012', December 23), remittance growth is likely to be relatively muted in 2012 as poor economic climates in the US and EU weigh on employment in the developed world. Moreover, the recent floods in the Philippines are likely to place another dampener on the country's near-term consumer growth story, as consumers suffer damages to their properties and wealth. With these dynamics dictating consumption trends over the coming quarters, the domestic confectionery market is likely to witness relatively slower growth as consumers tighten their purse strings over discretionary goods. We are forecasting confectionery value sales growth to come in at 2.7% in 2012, down from 2.8% in 2011.

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