Evolution of cold chain industry in Philippines commenced after the construction of Philippines Nautical Highway System in 2003. It is also known as Strong Republic National Highway and it is an integrated network of highways and vehicular ferry routes. The highway is 919 KM long and has reduced the previous usual travel time by 17 hours to the different key cities in Philippines. It is also called the Roll-On/Roll-Off system or the RO-RO system. RO-RO has accounted for a revenue share of around 20.0% in cold chain transportation market of Philippines in 2015.
The Philippines cold chain market has witnessed significant growth after the launch of ‘Philippines National Cold Chain Program’ in 2004. As per the program, cold chain facilities were established in major areas of North, Central and South Philippines. Contribution of cold chain to the overall logistics market revenues of the country has augmented from ~% in 2010 to ~% in 2015.
Figure: Philippines Cold Chain Market contribution to Philippines Logistics Market in Percentage, 2010-2015
The Philippines cold chain market has witnessed significant growth after the launch of ‘Philippines National Cold Chain Program’ in 2004. As per the program, cold chain facilities were established in major areas of North, Central and South Philippines. The project has been implemented in collaboration with the private sector. Assistance was provided to interested entrepreneurs and investors to set-up their own cold chain enterprises.
Government initiatives, high domestic consumption and market’s growing food safety concerns have propelled the Philippines cold chain market over the period 2010-2015. Additionally, there has been a gradual shift of people purchasing frozen products from supermarkets instead of wet markets in Philippines over the past five years. Revenues of the cold chain industry have amplified from USD ~ million in 2010 to USD ~ million 2015, reporting a CAGR of ~% during the period.
Figure: Philippines Cold Chain Market size on the basis of Revenues in USD Million, 2010-2015
What Are the Major Sectors Driving Philippines Cold Chain Market?
Cold chain transport and cold storage are the two major components of a cold chain industry. Cold chain transport has been the dominant segment as it has acquired a revenue share of ~% in the cold chain market of Philippines during 2015. On the other hand, cold storage has garnered a share of ~% in the cold chain market during 2015. Lower share of cold storage in the cold chain market of Philippines has been perceived on the grounds of rising cost of power/electricity in Philippines over the period. Power rates in Philippines have surged from PHP 7.6 per KWH in December 2010 to PHP 8.6 per KWH in 2015. On an average, power accounts for 50% of operating costs of cold storage warehousing in Philippines. Thus inclining cost of power has been the major reason behind smaller revenue share of cold storage warehousing in 2015.
Table: Philippines Cold Chain Market Segmentation by B2B and B2C Segments on the basis of Contribution to the Revenues in Percentage (%), 2010-2015
| Particulars | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Cold Transport | ||||||
| Cold Storage | ||||||
| Total |
Perishable products such as fish, meat, vaccines, cakes, fruits and vegetable are perishable commodities which require cold chain logistics. Meat and seafood have accounted for the largest revenue share of ~% in the Philippines cold chain market during 2015.
Philippines produced around 2.4 million tonnes of sea food in 2015. Furthermore, as of 2015, its average per capita sea food consumption is around ~ Kg annually, one of the highest in the world. Philippines have a large meat and seafood market which has complimented the country’s cold chain industry remarkably, over the period 2010-2015.
Table: Philippines Cold Chain market Segmentation by products (Meat and Seafood, Vaccines and Other Pharma Products, Bakery and Confectionary, Fruits and Vegetables and Others) on the basis of Revenue Contribution in Percentage (%), 2015
| Particulars | 2015 |
| Meat and Seafood | ~ |
| Vaccines and other Pharma Products | ~ |
| Bakery and Confectionary | ~ |
| Fruits and Vegetables | ~ |
| Others | ~ |
| Total | ~ |
Philippines cold chain market has been segmented on the basis of B2B and B2C segments. Over the period 2010-2015, B2B has accounted for a dominant share of revenue in the Philippines cold chain market. However, ecommerce has grown considerably in Philippines over the past five years. Sales of fresh produce from popular ecommerce outlets such as Taobao have escalated at a remarkable pace over the period 2010-2015. Therefore, fuelled by rise of ecommerce in Philippines, share of B2C segment has inclined from ~% in 2010 to ~% in 2015, while the share of B2B segment has decreased from ~% in 2010 to ~% in 2015.
