Retailers seen going strong in decade ahead

MANILA, Philippines–Filipino retailers may extend their strong rally over the next decade, as local players expect the sector to contribute 20 percent to the local economy within that period.

Over the past years, the Philippine retailing sector was estimated to have contributed as much as 14 percent to the country’s gross domestic product, said Samie Lim, chair emeritus of the Philippine Retailers Association (PRA).

Lim noted that the contribution of the retail sector would be spurred largely by the sustained growth of the Philippine economy and rising domestic consumption as the country’s GDP per capita was said to be averaging at around $3,000.

“The fact that we are growing 6 to 7 percent is incredible … for any country with a population of 100 million. Many foreign retailers—the Japanese, American and Koreans, among others—were clear in saying before that unless your GDP per capita is averaging $3000, there is no market. Of course in Metro Manila and Metro Cebu, the per capita could be much higher,” Lim said on the sidelines of the 18th Outstanding Filipino Retailers and Shopping Centers of the Year awards night held last week.

Contributing to this stronger purchasing power, he added, was the growth of the business process outsourcing industry, which enabled the young working population to have excess spending capacity.

Trade Secretary Gregory L. Domingo similarly sees a sustained growth for the sector.

“The retailing sector has kept pace (with the growth of the economy) and consistently contributed 13 percent to the total GDP. The future looks very bright for retailing,” Domingo said. “Our GDP per capita, as of end-2014, should have approached close to $3,000 and, from an economist’s standpoint, that area of $2,500 to $3,000 is really the take off point wherein you will see tremendous increases in consumer spending.”