PH liquor sales seen to sustain 5%-7% annual growth

Alcohol sales in the Philippines are projected to sustain a single-digit annual growth despite the 6 percent increase in excise tax for alcohol products in January.

“Despite the annual increase in excise tax, traders are optimistic that sales of alcohol products, both local and imported, will grow 5 percent to 7 percent each year,” the US Department of Agriculture (USDA) said in a report.

Under Republic Act No. 11467, the excise tax on distilled spirits increased by 6 percent on Jan. 1 this year and will continue to rise at a fixed rate of 6 percent annually.

Only distilled spirits are subject to a two-tiered excise tax, including an ad valorem tax (proportional to the value of the product) and a specific tax (fixed tax amount regardless of product value).

Wines and other fermented liquors, including beer and ale, are levied with specific excise tax. Fortified wines with over 25-percent alcohol follow the distilled spirits excise tax schedule.

The foreign agency noted, citing Euromonitor estimates, that the Philippines had consumed 3.6 billion liters of alcohol products in 2024.

Beer was the most widely consumed alcoholic product in the country, comprising 74 percent of total consumption last year. Distilled spirits accounted for 25 percent, while wine and other alcoholic beverages made up only 1 percent.

“Consumption has been growing at a compounded annual growth rate (CAGR) of 7 percent over the past five years,” the USDA said.

The report also said that only 142 million liters, or around 4 percent of total alcohol consumed, had been imported in the previous year.

“Philippine imports of alcohol products grew at a CAGR of 1.6 percent over the past five years,” it said.

America was the fourth largest supplier of alcohol products to the archipelago last year, holding a market share of 7 percent. It primarily supplies wines and whiskeys.

“The Philippines’ favorable consumer demographics, increasing consumption of alcohol products, and widespread acceptance of American products create an extraordinary profile that makes the Philippines an exciting market for U.S. alcohol products,” the USDA said.

“This highlights the huge potential for U.S. exporters to significantly grow their market share in the Philippines across all alcohol product categories,” it added.

According to the report, the Philippines was the eighth-largest market for US agricultural products in 2024, with exports reaching $3.5 billion.

The USDA said that since 2006, the Philippines has been the largest Southeast Asian market for high-value US consumer-oriented food and beverage products, including alcohol products.