Philippines franchising industry projects 10-15% growth

CEBU, Philippines — The Philippine franchising industry is projected to grow by 10-15 percent this year on the back of a healthy consumer spending activity driven by the growing economy.

Philippine Franchise Association (PFA) president Richard Sanz said in a recent interview the industry remains bullish on consumer spending growth despite the implementation of the TRAIN (Tax Reform for Acceleration and Inclusion) law which has been blamed for the rise in consumer prices recently. 

“Franchising remains robust," Sanz said. "It is good when the economy is up but it is even better if the economy is not doing well because there would be a lot of entrepreneurs and employees who will venture into business."

In 2015, franchising contributed about 5 percent to the country’s gross domestic product (GDP).

The PFA official noted the sector expects its contribution to GDP to increase as the economy continues to expand, thus spurring demand for goods and services. 

Sanz also cited the potential of the franchising business in Cebu given its growing tourism industry. 

“With the influx of travelers, Cebu would need to have more restaurants and other support services and products. And this is where franchising comes in,” he explained.

He added Cebu is poised to attract more visitors moving forward with the opening of its new international airport passenger terminal. 

The franchise industry is expected to grow consistently in the next years on the back of the sustained economic expansion, and even projected to be the country’s next top dollar earner.

In 2016, the industry accelerated 20 percent from P16 billion in total sales registered in 2015.

PFA has over 270 members, of which 52 percent are in food, 27 percent are in services and 21 percent in retail.

About 82 percent percent are local brands while 18 percent are international master franchises.