Duty Free Phils expects continued profit growth

Duty Free Philippines (DFP) expects a continued growth in its profits this year with reform measures that have been put in place, enabling the agency to turn in profitable operations since 2001.

Michael Kho, DFP general manager, said they will pursue the aggressive marketing efforts and other strategies in improving their operations that enabled them to post P632 million in net income starting 2001, when he assumed management.

The state-owned duty free shop operator managed to post a respectable eight percent increase in sales last year to $142 million from $132 million in 2003, marking the first time it posted revenue growth since 1995.

Kho said they will persist in negotiating supplier contracts to improve margins and increase efficiency in inventory turnover, renew credit lines at lower cost, reduce bank interests and charges, and restructure heavy debt burden with major creditors accumulated by previous management.

"We assure everybody that we will do our best to maintain our profitability so we can fulfill our mandate to generate funds for our country’s tourism programs and projects," Kho said.

The DFP had suffered successive years of losses, particularly from 1997 to 2000. But under the Kho administration, DFP marked P403.5 million in net income in 2001; P528 million in 2002 and P503 million in 2003.

In the losing years of DFP, it suffered a P535 million loss in 1997; P1.151 billion in 1998; P205 million in 1999; and P212 million in 2000.

All income generated by DFP is turned over to the Department of Tourism (DOT) – its parent organization – for tourism development projects of the government, as mandated by Executive Order 46 which created the DFP in 1987.