Philippine retailers are anticipating broader consumer
spending this year, with traditional store sales projected to expand by 5 to 10
percent. E-commerce, however, is expected to post a faster growth rate of 10 to
15 percent as consumers increasingly turn to online platforms for lower prices
and greater convenience.
Philippine Retailers Association chairman Roberto Claudio
said the shift toward digital shopping is being driven by several factors,
including the wider range of products available online and the ability of
consumers to compare prices more easily.
A key issue for established retailers is the treatment of
imported goods under the de minimis rule. Shipments valued at P10,000 or below
are generally exempt from customs duties and taxes, giving overseas online
sellers a pricing advantage over local businesses that operate under the full
domestic tax and regulatory framework.
The PRA has been calling for changes to the de minimis
policy, arguing that the existing arrangement creates different competitive
conditions between brick-and-mortar retailers and foreign sellers operating
through e-commerce platforms.
The disparity is particularly significant as online shopping
continues to capture a larger portion of consumer spending. Lower prices can
function much like a permanent discount, encouraging buyers to move purchases
online even when physical stores offer immediate access to products and
in-person service.
Despite the competitive pressures facing traditional
retailers, the sector expects the approaching holiday period to provide a
substantial boost to overall consumption. Claudio pointed to population growth
and overseas Filipino worker remittances as factors that could support consumer
confidence and spending during the Christmas season.
Weather conditions remain a potential constraint. Continued
disturbances have already affected shopping activity, with unfavorable weather
making consumers less likely to travel and spend at physical establishments.
The retail sector remains a major component of the
Philippine economy. It accounts for roughly 18 percent of gross domestic
product, employs an estimated 12 million to 15 million Filipinos, and generates
approximately P800 billion in taxes for the government each year.
With both physical and online retail expected to expand, the industry enters the remainder of the year facing a combination of stronger seasonal demand, accelerating digital commerce and ongoing debate over whether existing tax rules provide an equitable environment for competing retail channels.
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