Tapping into the Halal Market

Date Published
September 29, 2020
Products displayed at a BIMP-EAGA trade fair include halal-certified sardines from the Philippines.

The development of special economic zones for halal food production in Mindanao could boost its bid for a share of the world halal market, estimated at more than $3 trillion.

The Philippine Economic Zone Authority is promoting the development of special economic zones in Mindanao that target halal food producers and investors, news reports said. The agency, which grants tax and other incentives to export-oriented businesses operating in ecozones, announced last week that it is partnering with the Southern Philippine Development Authority to develop more ecozones, starting with an agro-industrial facility in Lanao del Sur.

The Philippines stepped up efforts to penetrate the halal market in 2016 when the Halal Export Development and Promotion Act was signed into law. This year, it is banking on the halal industry as part of a wider strategy to lift export sales during the COVID-19 crisis. The country’s halal exports amounted to $560 million in 2018.

Potential halal hubs

Mindanao is the most logical location for halal food production in the Philippines, given its large Muslim population, strategic location in the southern part of the country, and economic and cultural ties in the BIMP-EAGA subregion.

The Zamboanga City Special Economic Zone is also being positioned as a halal production hub in Mindanao. The ecozone is hosting the Asian Halal Center, a 100-hectare estate envisioned to become the home of export-quality halal products.

Three years ago, the Polloc Freeport and Ecozone in Maguindanao was also declared a halal hub and gateway to the international market.

Bilateral initiatives

The Philippines has been exploring greater cooperation in the halal industry with BIMP-EAGA countries. It has signed a Memorandum of Understanding (MOU) on Halal Industry and Export Development and Promotion with Brunei Darussalam in 2017. It looked at developing the halal industry with Malaysia’s help and reviving barter trade to support the growth of the industry. It also sought a mutual recognition arrangement on halal certification and accreditation with Indonesia.

Earlier this month, the Philippine Embassy in Brunei Darussalam held a webinar to discuss opportunities for joint ventures in the halal value chain.

In his opening remarks, Philippine Ambassador Christopher B. Montero said the implementation of the MOU with Brunei benefits not just the two countries but “also impacts profoundly on the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area, or BIMP-EAGA, an area with huge promise yet hampered by the challenges posed by connectivity.”

Under the MOU, the two countries have already made progress in the areas of mutual recognition of halal standards, science and technology, Islamic banking and finance, and Syariah-compliant governance.

Montero also said cooperation in the halal sector can support the economic development of communities in the southern Philippines, particularly the Bangsamoro Autonomous Region of Muslim Mindanao (BARMM) and sustain the “gains of the peace process in Mindanao."