No happy holidays for local retailers

Thanks to 168 and the prevailing local economic environment, retailers did not have their usual holiday sales boost this year. On the contrary, reports say, they will likely remember the 2005 Christmas season as the "shortest and saddest" in recent memory.

After going through the worst November in terms of sales, Philippine Retailers Association (PRA) founding chair Samie Lim said the retailers, the legitimate ones he emphasized, were hit with another whammy of anemic sales with most Filipinos either flocking to Divisoria malls like 168 this Christmas, or going out of town thereby cutting short the holiday shopping season. Ate Glue’s "holiday economics" apparently worked against the retailers.

Lim was quoted by newspapers observing that except for the last few days before Christmas, cash registers were barely ringing in the country’s shopping malls (Lim estimated that sales were down by at least 15 percent for most retailers from past years). "We used to have 15 solid days of sales every Christmas. Now, we only had 10 because of the long holiday and consumers downgrading their purchases," Lim said.

I know Samie Lim. He is a dyed-in-the-wool retailer, the son of Benito Lim of Automatic Appliances and the brother of Wilson Lim of Abenson. He is not prone to hyperbole. If he says their holiday season sales sucked, believe him. Samie grew up in a retail environment and much later in life, he thought he must serve his country by accepting a position at DTI. That was a short stint, though.

I learned the ropes of retail advertising from Samie and his father, Benito. They were among my first clients when I started out in advertising many years ago. My account group even coined the name "Blims" when Samie and his father decided to branch out to furniture packages. They were tough clients who measured results immediately.

I remember Samie telling me that it was my job to create distinctive advertising that brought the shoppers into their appliance and furniture show rooms. Once they were in the show rooms, it was their job to make a sale. This was how I learned to maximize every advertising peso to produce the loudest bang. Retailing is in the blood of Samie, his dad and brother.

Samie was also quoted saying that Ate Glue must decide soon whether she wants Filipinos to be competitive in the manufacturing and retail sectors or let the foreigners take over what used to be the pillar of the Philippine economy. Samie lamented how government stood by and allowed illegal Chinese immigrants hawking incredibly low priced goods from the mainland, to dominate the shopping season.

Even Donald Dee, Philippine Chamber of Commerce and Industry president who is so pro Ate Glue that he was given the title of Ambassador, is worried about government turning a blind eye to smuggled goods from China. Dee concedes that the low prices may be good for consumers now, "but I ask them, where will Filipinos get the money to buy if they have no jobs after manufacturers and retailers have closed down?"

Albay Rep. Joey Salceda, an independent minded economic adviser of Ate Glue, according to published reports, also took note of the "dire implications of the influx of China-made goods and the hoard of Chinese traders illegally doing business in the country." The policy dilemma, Joey points out, is whether the Philippines is content to merely export labor and with their remittances buy imported goods.

The statistics are alarming. Salceda noted that employment at domestic manufacturing has fallen to only 1.3 million out of the 32 million-strong labor force or barely 4.4 percent of the labor force. As of October this year, Joey points out, the economy produced 1.2 million jobs of which only 6,000 were in manufacturing. (Ate Glue reports two million jobs, but that’s neither here nor there).

Samie suspects plain and simple dumping of Chinese-made goods. This means, these products are being sold in the country at prices much lower than the mainland, at below production prices. This is an unfair trade practice and as a former DTI official, Samie knows government is not helpless to do something about it, if it cares to.

Worse, Lim said the China-made goods were cheap largely because they do not pay taxes and duties. In contrast, Lim said local retailers operating in shopping malls pay taxes and other fees-10-percent value-added tax; three percent of their sales go to the landlord; two percent to city hall (local taxes); and a three-percent surcharge if the sales is done through credit cards-and have higher overhead because they pay correct wages, carry inventory, and pay rent for 365 days compared to the two or three weeks for tiangge operators.

Furthermore, the Retail Trade Liberalization Act, limits to Filipinos the conduct of businesses with a capital of $2.5 million and below. But Lim noted that most of those selling in the large tiangges in the country were from China, in clear violation of the rules.

So, is the Strong Republic ready to implement the relevant laws and in the process, ensure a level playing field that would save local manufacturers and retailers? Well, Samie, if I were you, I would not hold my breath waiting for a favorable answer from Ate Glue’s government. Samie, of all people should know, having spent some months in government service himself, that the bureaucracy can’t be expected to do its job unless the President gets on its back.

Revolutionary taxes

This government is exasperating. Ang yabang. Akala mo ang gagaling nila!

According to Justice Secretary Raul Gonzalez, any company caught paying "revolutionary tax" to communist insurgents will be prosecuted for rebellion as an accessory or accomplice. It is as if anyone wanted to pay those taxes to the rebels. Businesses operating the countryside have found it necessary to accede to this form of communist extortion out of self preservation. Neither the PNP nor the AFP can give them the protection they need and deserve as tax payers.

Take the case of Globe Telecom. Last year, it lost about 30 of its cell sites in remote areas of the country. They have brought up this problem time and again to government but no action that really works to protect the telecom company has been taken. Since SingTel, which is largely owned by the Singapore government, is a major stockholder of Globe, it is against its policy to give in to extortion from the communists.

Yet, take a look at the other cellphone company. Even if its cellsites are side by side with Globe, it is only the Globe property that is torched by the NPA. It does not take a genius to conclude why. Perhaps if Secretary Gonzalez is serious, he should invite the other cellphone company to inquire why it is getting special treatment from the Reds.

But, as is usual with this administration, the bluster of Mr. Gonzalez is for press release purposes only. This is why I say, until government is able to provide effective security, all payments to Ka Roger should be considered a necessary business expense. The NPAs are more reliable in protecting vital and expensive business assets in the countryside than the PNP and the AFP.

Incidentally, Ka Roger should be lauded for not exempting the Chinese communists working on projects here from paying the same "taxes". At least Ka Roger levels the playing field, in a sense. That’s more than anyone can say about Ate Glue’s government.

Not in the mood

Dr. Ernie E’s humor prescription for today…

Two gay guys got into a heated argument, when one of them said, "Well, you can just kiss my f**king ass!"

The other one blurted out, "This is no time to be talking romance, bitch!".

Boo Chanco’s e-mail address is [email protected]