But the illusion doesn't stop there - the waiters are all under 4ft (1.2m) tall.
"Hobbit House is very unique - we only recruit little people," says the proud manager, Pidoy Fetalino, 3ft 6in tall, who has been working at the bar for more than 30 years.
While some might question how politically correct it is, the reality is that a job at the Hobbit House is undoubtedly one of the best the staff can get.
The Philippines doesn't provide much, if any, state support, and many jobs have height restrictions, making a market which is already competitive due to high unemployment even tougher.
The waiters say that most of their friends, if they have jobs at all, work in the entertainment industry - as boxers, bit-part actors or even as human cannonballs.
One said his friend was paid half what other employees were paid just because he was short.
Family Unsurprisingly, the little people of Manila want more than this - and they are busy making plans.
Perry Berry President of the Little People's Association of the PhilippinesWe're going to build houses like big mushrooms and big shoes”
A wealthy benefactor has donated a 6,000-square-metre (1.5-acre) piece of uncultivated land near the town of Montalban, and there they want to create a place called "Dwarf City".
Mr Berry has a clear vision of what he wants this community to look like.
"Wow, if you can imagine it," he says. "We're creating a housing project designed for small people and we have to create something unique. We're going to build houses like big mushrooms and big shoes."
Their idea is to construct buildings tailored to their size, to represent certain themes, and they hope they will be able to earn at least part of their income through tourism.
The day after the association meeting, armed with a rudimentary drawing of what this new community might look like, Mr Berry and other association members take me to visit the site.
They try to go at least twice a month - piling into a hired van and taking a picnic along too.
At the moment, their potential new home is just grass and trees but Mr Berry says it is important for them to get used to the idea of living there, and get to know the locals.
As we climb up to the site, Mr Berry becomes increasingly animated about the future.
"We want a flea market here, and a big chapel over there," he says, pointing his hand into the distance. "We will each design our own home… it's a very fantastic and wonderful place."
His friends are equally enthusiastic. Dheng Bermudez, who is proudly wearing her Small is Beautiful T-shirt, says she wants the community to show that "we're more than people to make fun of".
They talk of living without discrimination, and being able to let their children run around in the fresh air.
"As small people, sometimes other people tease us or make fun of us. Sometimes it hurts, you know," Mr Berry adds.
"It's much better if we're together, because it's just like a family."
Dreams The little people of Manila don't want to confine this new "Dwarf City" just to the 47 families who are current members of the association - they envisage a much bigger settlement.
Wendel Avisado Housing and Urban Development CouncilWe will definitely subject this proposal to study and evaluation”
Mr Berry is looking for outside funding for some of the construction work, and the government says it will consider helping out.
"It's a novel idea - it's really worth looking into," says Wendel Avisado, from the Housing and Urban Development Council.
"This is the first time ever there is a group of Filipinos who are in these circumstances, who would like this kind of assistance from the government. We will definitely subject this proposal to study and evaluation."
One way or another, Mr Berry is determined to make sure his dreams come to fruition.
"One day people will realise that even though we are small, we're thinking big," he says.