The Philippine Retailers Association (PRA) conducted its annual Retail CEO Briefing in conjunction with its First Quarter General Membership Meeting for 2019, where guest speakers from National Economic Development Authority (NEDA), Department of Finance (DOF), and Nielsen reported positive prospects for retail businesses in the country for 2019, as economic growth and domestic demand remain strong, amidst some challenges.
NEDA Undersecretary Rosemarie Edillon reported that the Philippine retail industry grew by 5.8% in the fourth quarter of 2018, with a full-year expansion of 5.9% in 2018 at the meeting held in Makati Diamond Residences last March 19, 2019.
Retailing accounts for about 23% of the total services industry. And while the growth of retail trade slowed down in 2018 amid less positive sentiment of household consumers, it has been a major growth driver of the services sector with total gross value added (GVA) in real terms increasing by 1.8 times to Php1.22 trillion in 2018 from Php686.3 billion in 2009, according to Usec. Edillon.
“Notwithstanding the risks, retailing in the Philippines is expected to remain positive alongside the continued expansion in the economy as strong macroeconomic fundamentals and favorable demographics provide a solid base for investments in the country,” Usec. Edillon said.
Nielsen Managing Director Patrick Cua on the other hand said that 2019 will generate more jobs and higher spending power for consumers given that it is an election year. He added that growth will be driven by food as well as fast moving consumer goods (FMCG) in general which covers 40-50% of consumption.
He also shared tips on strategies to do in response to challenges and trends in 2019, including leveraging on e-commerce, providing convenience and communicating with the younger generation.
Department of Finance Director Euvimil Nina Asuncion said that the robust double-digit growth in sales and the high-profit margins of publicly-listed retail giants and real estate companies in the Philippines in 2018 prove that Filipinos have significantly increased their spending power as a result of last year’s implementation of the TRAIN Law.
She added that as a complementary measure to TRAIN Law, the Tax Amnesty Law Package 1B will allow errant taxpayers to affordably settle their outstanding tax liabilities allowing for a “fresh start” for taxpayers.
Meanwhile, SGV& Co Atty. Lucil Vicerra informed the attendees on the updates in Customs Policies, especially the timeline of the Bureau of Customs (BOC) Post Clearance Audit and penalties that may be imposed to companies if found that there is negligence or fraud in their importation.