Restaurant margins in the the Philippines capital drops 2.8% in 2025
Operating costs jumped 24.7% from 2019 to 2025.
Restaurant margins in the Philippines’ capital have fallen sharply, with average operating margins declining from 22% in 2019 to just 2.8% in 2025, as rising food input costs and intensifying competition from delivery platforms, cloud kitchens, and chain operators continue to pressure independent operators, according to a report by CloudCFO.
Food input costs in Metro Manila’s F&B industry surged 36.3%, pushing total operating expenses up by 24.7%, a trend accelerated by global supply chain pressures and commodity price volatility.
Labour costs also rose 23.3% whilst commercial rents climbed 6.9%, with prime locations in Makati, BGC, and Ortigas increasing well above this average. CBRE data shows nearly half of 2024 lease renewals occurred at higher rates, with an average uplift of approximately 14%.
Other operating costs, such as utilities (electricity and water), packaging, cleaning materials, equipment repairs, insurance, and administrative expenses, increased by 12% and are typically 10% of revenues. This was driven primarily by higher electricity rates and increased cost of packaging materials with the shift toward delivery and takeaway.
The report said that there are a total of 96,650 foodservice outlets in the Philippines in 2024, surpassing pre-pandemic levels (94,000) for the first time. Limited-service restaurants continue to dominate, with the compound annual growth rate at 7% by 2029
