Retailers see revenue growing by up to 15%

Despite headwinds

MANILA, Philippines — Retailers are expecting to grow their revenues by as much as 15 percent this year, banking on strong demand in the second half despite challenges faced by the sector, according to the Philippine Retailers Association.

PRA chairman Roberto Claudio said the country’s retail industry is hoping to book a 10-to 15-percent increase in revenues this year amid headwinds caused by the higher tariffs imposed by the United States on Philippine goods as well as weather disturbances.

“Everybody’s trying to push that,” Claudio told reporters on the sidelines of the National Retail Conference and Expo.

PRA president Alice Liu said the first half has been good for most retailers, given the midterm elections held in May.

Liu said elections typically result in increased liquidity that contributes to higher spending.

“We are a little bit cautious, but optimistic for the second half,” Liu said.

According to Claudio, there is cautious optimism as the PRA is watching closely how US tariffs, which continue to evolve, would affect the Philippine economy and retail industry.

Starting Aug. 7, a 19-percent tariff will be slapped to exports coming from the Philippines, the second lowest in Southeast Asia. This is also the same rate to be levied on goods from Cambodia, Indonesia and Malaysia.

Liu said the Philippines could be affected as countries like China, which were imposed with higher reciprocal tariffs by the US, may look for other markets where they can send their products.

“So that in a way is the indirect effect to us. Since the tariff is bigger there or they cannot deliver many stocks to the US, what will happen is they’ll concentrate… outside of China,” Liu said.

Liu also said that in Southeast Asia, global online fashion retailer Shein’s biggest market is the Philippines.

While Shein is now headquartered in Singapore, the majority of its products are from China.

Aside from the US tariffs, Liu said weather disturbances like typhoons and flooding also pose challenges to the sector.

With President Marcos ordering a review of flood control projects and calling on officials to step up, she said the PRA is hoping that the flooding problems will be addressed and allow more consumers to spend on other items.

“Flood control is very important because that will determine our agility and our ability to really react fast. We cannot control the weather, but we can prepare well enough,” Liu said.

Meanwhile, Claudio said PRA is pushing for the removal of the de minimis rule to promote fair competition.

Claudio explained that the de minimis rule, which exempts imported goods valued at P10,000 or lower from duties and taxes, is creating an unlevel playing field, affecting retailers.

As more foreign brands including luxury brands are entering the Philippine market, Liu said PRA is also working to help local retailers step up their game to be ready to compete against global giants.

“We have to be ready to face everyone,” Liu said.