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Spurred by increasing disposable income, declining unemployment rates, and urbanization, the cosmetics & toiletries industry in the Philippines was expected to grow at a compound annual growth rate (CAGR) of 4.9% from USD 3.4bn in 2018 to USD 4.2bn in 2023. [1] The Philippines is now considered as one of the key focus markets of global cosmetic brands within the Asia Pacific region.
According to Statista, the largest segment of the cosmetic sector is the personal care segment, with a market volume of around USD 2600m in 2019. [2] The scope of the segment encompasses 5 product categories: hair care products, bathing products, deodorants, oral care products, and shaving products.
Source: Statista
Following the personal care segment is the skincare and make-up segments. Among skin care, facial products rank 1 with compelling revenue statistics. [3] For make-up, the top 3 categories are eye make-up, facial make-up, and lip make-up. [4] The revenues in the skin care and make-up segment are estimated to USD 1496.7m and 763.4m in 2020.
Source: Statista
Statista also indicates that non-luxury products are dominating the Philippine beauty and personal care market with skin care and make-up accounting for revenue shares of 85% and 73%, respectively. [3] [4] The overall low economic level and per capita consumption are the main contributors to the phenomenon. However, the Philippines is maintaining a rapid GDP growth rate of 6%, indicating a large consumption potential.
Source: Statista
Cosmetic Regulations in the Philippines
To place cosmetics products in the market, cosmetic companies shall obtain a License to Operate (LTO) first and then notify their product with the competent authority- Food and Drug Administration (FDA).
License to Operate (LTO)
All cosmetic establishments shall first secure the LTO from FDA prior to engaging in the manufacture, importation, exportation, sale, offering for sale, distribution, transfer, promotion, advertisement, and for sponsorship of any activity that involves cosmetics.
Filing of initial and renewal of LTO shall be done online through the e-Portal of the FDA (https://ww2.fda.gov.ph). The required information for LTO is as follows:
Accomplished Application Form and Declaration and Undertaking
Proof of Business Name Registration
Site Master File
Risk Management Plan
Proof of Payment
Qualified companies will obtain the LTO and be permitted to carry on cosmetic businesses. All cosmetic establishments with the LTOs may be inspected at any time by the FDA as part of its post-marketing surveillance activities.
Cosmetic Notification
Being a prominent member of ASEAN, the Philippines adopted the ASEAN Harmonized Regulatory Scheme and the ASEAN Common Technical Documents into the National Requirements in April 2005 and has implemented a notification scheme since then.
After obtaining the LTO but before placing the cosmetic products in the market, companies shall notify their products with the FDA. And they must ensure that their notified products meet the requirements of the ASEAN Cosmetic Directive, its annexes and appendices, such as requirements for labeling, ingredients, claim, safety assessment, etc.
To notify the products, companies shall follow the following procedures:
1. Secure a user account for the FDA e-Portal (https://ww2.fda.gov.ph) by sending a request to [email protected] with the following information:
Email address (preferably company email address)
Name
Position
Contact No.
Company name
Company address
Product classification: cosmetics
2. After securing the user account, login at the FDA e-Portal
3. Select "New Case" and accomplish the ASEAN Notification Form
4. Download the Order of Payment and assign the task to FDA Cashier
5. Pay the fee at any Landbank Branch or through online Bancnet payment and wait for the Result of Application.
6. If approved, download and print the notice of acknowledgment
Companies with correct application documentation will be issued a Notification Certificate. For initial submissions, the notification shall be valid for a period of 1 to 3 years maximum at the option of the applicant. Those with insufficient documentation will receive a Notice of Deficiencies, asking for clarification or further explanation of some details. Any company declaring false or misleading information will get a Denial Letter. The FDA lists all of its decisions on notification applications on its website.
*** You may click here to learn more about the ASEAN Cosmetic Directive, its annexes, and appendices.
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