Food and Beverage - Retail, Foodservice and e-commerce
Some New Zealand health and wellbeing brands are experiencing high demand amongst consumers who are shifting their focus to building up their immunity. Despite the closure of retail establishments and their online stores in Lazada, the local importers of these brands have made alternative selling arrangements by marketing through social media (Facebook and Instagram) as well as promotion to various online communities and handling deliveries of the orders on their own.
GCash, a mobile wallet app, saw PHP100 billion (NZ$3.1 billion) worth of transactions in the current year to the end of July, compared to PHP28 billion (NZ$880 million) last year. Businesses that were able to shift to digital means of operations were less significantly impacted, both in selling goods and services to customers, but also in keeping productivity high under work-from-home arrangements.
The impact on the food and beverage sector, which makes up the bulk of New Zealand exports to the Philippines, paints a mixed picture for New Zealand businesses. New Zealand’s reputation for high quality and healthy food has seen demand for some products grow (e.g. Mānuka Honey). Companies supplying retail stores (primarily supermarkets) continue to see strong demand, but demand from the hospitality sector has dropped significantly. Food security is an issue that is front of mind for the Philippines.
One New Zealand brand that is strongly aligned with the food service industry has been successful in engaging consumers directly through social media channels by providing recipes to try at home as families have more time to cook and explore new meals.
Asia Development Bank funding
The Asia Development Bank (ADB) is making US$20 billion available for COVID-response this year, of which $1 billion is new and additional funding. This funding is available for projects throughout the Asia Pacific region.
Most of the fund will go towards budget support for countercyclical spending (health response, emergency social protection support, economic stimulus). There are also some non-sovereign operations to support the private sector, particularly its Trade Finance Program and Supply Chain Finance Program, both of which were increased in size by over US$1 billion for the COVID-19 response.
Project implementation has been affected by lockdowns, travel restrictions, and disruptions to supply chains for materials. ADB’s procurement department is developing some guidance on additional health and safety provisions to be enforced in works contracts moving forward. They noted that several countries, including New Zealand, have already issued similar guidance.
Health was already a priority for ADB and its members under Strategy 2030. How much, and what it supports, will depend on member country priorities. For example, some may want support for new health infrastructure or diagnostics and vaccines, some might be in supporting private sector companies that produce medical supplies and PPE, some might be policy reforms in the health sector that they receive budget support for, and digital transformation in health is likely to be an increasing trend.
For the Philippines, ADB has responded with significant new support, including a US$1.5 billion loan for the Philippines COVID-19 response package, a US$3 million grant for a testing laboratory commissioned on 9 May 2020, increased testing capacity of 3,000; a US$5 million grant to support the emergency food supplies provided to vulnerable communities; US$200 million additional loan financing for a social protection project; US$1.5 million grant for healthcare supplies; and various pieces of expert advice by staff and consultants to inform the Government’s policy responses. They will work with the Government on whether to change or reprioritise other projects that were already being developed.
For more on the ADB funding of projects in the Philippines, see here.