Philippines Air Conditioning Market – By Connectivity , By Category , By Technology , By Capacity , By Components , By Power Rating , By Sales Channel , By Type , By Application Opportunity Analysis & Industry Forecast, 2024-2030

Philippines Air Conditioning Market Overview:

Philippines Air Conditioning Market size is estimated to reach US$14.3 billion by 2030, growing at a CAGR of 4.5% during the forecast period 2024-2030. Rising temperatures along with increasing awareness of air quality have led to rapid growth in the air conditioning market in the Philippines. In urban areas, cooling solutions are becoming dominant owing to hot and humid seasons which last for a long time. The consumers who want convenience and energy efficiency, the demand is driven by technological inverter technology and IoT enabled controls featuring air purification. Adoption is accelerated by government regulations to promote eco-friendly models. In addition, the post pandemic focus on health and hygiene has amplified demand for air conditioners that have sterilizing and filtration capabilities. The market is also supported by the expanding tourism and hospitality sector which drives the requirements of cooling solutions.Inverter technology and smart IoT enabled systems are the leading trends in the Philippines air conditioning market, as it helps the market to continue its growth with people becoming more inclined to be efficient and convenient. These trends are embodied in products such as Haier’s UV Cool Connect Pro which utilizes DC inverter technology, slashing energy consumption as much as 63 %, which is a significant complication with high electricity costs in the Philippines. With the Smart Control integration, it’s now possible for users to control air conditioners using Wi-Fi. The innovations are responding to the consumer need of cost effective and sustainable solutions with improved user experience. As rising temperatures strain households and institutions, such advancements highlight the critical role of these trends in driving market growth.

Market Snapshot: 

Philippines Air Conditioning Market - Report Coverage:

The “Philippines Air Conditioning Market Report - Forecast (2024-2030)” by IndustryARC, covers an in-depth analysis of the following segments in the Philippines Air Conditioning Market.

COVID-19 / Ukraine Crisis - Impact Analysis:  

• The Philippines air conditioning market was seriously disrupted by the COVID 19 pandemic. Production, imports, distribution bottlenecks had been hurt by lockdowns and mobility restrictions. Early in the pandemic demand for air conditioning units dropped as businesses shut down and household incomes decreased. But the prolonged pandemic helped build interest in units with an air purification feature as health-conscious consumers wanted better indoor air quality. However, the economic uncertainty held back large-scale commercial projects and delayed the markets recovery. A rebound in gradual economic reopening supported by pent up demand was modest growth by 2022.
• The Russia Ukraine war added further challenges in the Philippines air conditioning market due to a disruption in global supply chains and increase in the price of the energy. Fluctuations in raw material cost occurred with metals and other electronic components needed for air conditioner manufacturing. Increased operational expenses during the last decade due to rising energy costs, which manufacturers then partially passed on to consumers, affected affordability. The war also impacted global oil prices, which impacted consumer spending patterns such that many prioritize buying essentials over luxury items. 

Key Takeaways

Hospitality Dominated the Market

The hospitality segment dominates the Philippines Air Conditioning Market, driven by the robust growth of the country’s tourism industry. According to the Department of Tourism, the Philippines welcomed 4,879,022 visitors between January and October 2024, reflecting a 9.76% increase compared to the same period in 2023. This surge includes a 10.01% rise in foreign tourists, who accounted for 91.93% of the total arrivals at 4,485,288, alongside a 6.96% increase in overseas Filipino visitors. With such a substantial influx of travelers, demand for accommodations equipped with air conditioning systems has surged, as these facilities strive to provide comfort in the tropical climate. Hotels, resorts and other lodging establishments are investing heavily in advanced air conditioning systems to cater to the expectations of both local and international tourists. This consistent growth in tourism is cementing hospitality’s position as the dominant segment in the air conditioning market, making it a critical contributor to overall market expansion.

5-Star ACs Show Fastest Growth

Five-star air conditioners are emerging as the fastest-growing segment in the Philippines Air Conditioning Market by power rating, owing to their superior energy efficiency, cost-effectiveness, and enhanced user experience. The Department of Energy’s Cooling Seasonal Performance Factor (CSPF) standards states that 5-star ACs are the most efficient, with a CSPF of 4.01 or above across all capacity ranges. These units have lower power consumption, even in standby mode, and better Energy Efficiency Ratios (EER) than lower rated models. For example, TCL states that 5-star ACs are more energy efficient, because of their high performing condensers, which helps them to burn less energy, emit less heat and have lower utility bills and less environmental impact. They also run quieter than 3-star models owing to better insulation making them more comfortable for users. 5-star ACs are powered by their higher cooling capacity and durable compressors that have relatively less maintenance needs, particularly in a market that is increasingly concerned with energy savings and sustainability.

Offline is the Largest Segment

Air conditioning unit sales in the Philippines is dominated by offline channels, which corresponds to findings from the International Journal for Research Trends and Innovation (IJRTI). Consumers value the ability to physically inspect products in store before they make a large investment. The in-store experience also gives buyers personalized assistance from sales personnel that walks them through technical specification, warranty and installation services. In addition, there is no waiting period that is common with online purchases. One major reason that customers favor offline channels is their hesitation to have their packages damaged in transit and the long wait for returns or replacements in the event of damage. In particular, high value and delicate items such as air conditioners cause this concern. Offline purchases, or purchases where the product is received in hand with no risk of transit damage, increase buyer trust and satisfaction. These factors highlight the effects of cultural and practical factors in the play of offline channels in the Filipino market.

Rising Temperature and Climate Change Drives the Market

Rising temperatures and the effects of climate change are pushing the demand for air conditioners in the Philippines. According to data from the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), the nation’s average temperature has increased by 0.68°C since 1951. Additionally, the projections show that by 2050, there will be an additional 1.8–2.2°C of warming, with the greatest spikes in temperature in the summer. As this heat continues to increase, it becomes increasingly uncomfortable, especially in urban areas, and so households and businesses spend money on air conditioning systems to make life and work bearable. With hotter summers every year, air conditioners are no longer considered a luxury, they are now necessary for comfort and for the health of the most vulnerable populations such the elderly and children, who are at risk of heat related health issues. The worsening climate is driving the demand for air conditioners.

Concerns Over Environmental Impact to Hamper the Market

The Philippines air conditioning market is highly challenged by the environmental impact, especially in terms of greenhouse gas (GHG) emissions. Single (split) room AC units currently lead over 50% of the country’s RAC GHG emissions, according to the International Climate Initiative (IKI). The increasing demand for cooling in the country’s hot and humid climate will further boost the sector’s environmental footprint. By 2030 the RAC and foam (RAC&F) industry could contribute 13% to global GHG emissions without intervention. To address this, C4 has joined efforts, together with the government’s agencies that may be relevant to this issue, such as the Climate Change Commission and the Department of Energy, to formulate a sustainable cooling plan. Under this plan, green cooling technologies, including energy efficient R290 units are adopted, and buildings are made more energy efficient. Yet, the dynamic of the market is complicated by barriers to the transition to such sustainable solutions, including cost, infrastructure and consumer awareness. 

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Key Market Players: 

Product/Service launches, approvals, patents and events, acquisitions, partnerships and collaborations are key strategies adopted by players in the Philippines Air Conditioning Market. The top 10 companies in the Philippines Air Conditioning Market are:

1. Carrier
2. Daikin Air Conditioning
3. Panasonic Air Conditioning
4. LG Air Conditioning Technologies
5. Mitsubishi electric
6. Hitachi Appliances
7. Samsung Electronics
8. Fujitsu Genereal
9. Gree Air Conditioning
10. Trane technologies

Scope of Report: 

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