Retail spending seen to hike share in GDP

MANILA, Philippines - The Philippine retail industry is poised to expand and account for more than a fifth of the country’s total economic output this year as Filipino consumer spending remains on the rise, a retail industry executive said.

Philippine Retailers Association (PRA) president Lorenzo Formoso said the local retail sector is expected to increase its share to the country’s gross domestic product (GDP) by another five percent to at least 23 percent this year after growing to 18 percent last year.

“Data by the Philippine Statistics Authority reported that retail trade contributed 18 percent to the national output in 2015, a significant increase of five percent from the year 2014. With the 6.9 percent GDP growth in the first quarter of the year, we can expect a brighter future ahead with the rising retail sales growth to be buoyed by the strong private consumption and election spending,” he said.

“So this year we hope we will have the same pace of growth, at least. So from 18 percent (contribution to GDP in 2015) hopefully we get to the levels of 23 to 24 percent this year,” he added.

Last year, the PRA said the retail industry got a big lift from major economic and tourism events such as country’s hosting of the Asia- Pacific Economic Cooperation meeting, the Asia Pacific Retailers Convention and Exhibition and the Philippine Shopping Festival.

Major local retail players such as the SM Group of the Sy family, Lucio Co’s Puregold, Robinsons Retail of the Gokongwei Group, and Metro Gaisano have also continued with their expansion nationwide.

According to Formoso, the influx of more foreign retail players in the country has likewise been providing a huge boost to the industry.

“The retail scene in the Philippines continues to be dynamically expanding and growing. Since the year 2000, we have opened up the retail sector to foreign investors. Now we see a growing number of foreign brands coming to the country. This creates a dynamic and healthy competition among our homegrown local brands,” he said.