DALI Operator Reports ₱7.07 Billion Losses as Financial Pressures Mount

 

The Philippines’ hard-discount retail sector faces growing questions about its long-term viability after DALI operator Hard Discount Philippines Inc. (HDPI) reported accumulated losses of ₱7.07 billion in 2025, according to an independent audit.

The latest financial figures from SyCip Gorres Velayo & Co. (SGV) show that HDPI’s accumulated losses climbed 35 percent from ₱5.24 billion in 2024. The company also ended 2025 with a capital deficit of ₱1.03 billion, while its total liabilities exceeded its assets by ₱1.19 billion.

These figures prompted SGV to flag significant uncertainty over the retailer’s ability to continue operating as a going concern, raising concerns about its capacity to meet financial obligations and sustain normal business operations.

HDPI operates DALI, a retail chain that built its presence around aggressively priced everyday essentials. Its business strategy relies on minimizing advertising expenditures, maintaining relatively lean staffing, and reducing other operating costs to pass savings on to customers.

Despite reporting a 50 percent increase in revenue to ₱51.66 billion in 2025, the company continued to register substantial losses. Its net loss reached ₱1.83 billion, although this represented a modest seven percent improvement from the ₱1.97 billion loss recorded in 2024.

HDPI managed to reduce its direct costs by 49 percent to ₱30.59 billion. However, the gains were offset by a 48 percent surge in operating expenses, which reached ₱7.1 billion. The rising cost of running the business continues to weigh on its ability to translate higher sales into sustainable profitability.

The company's financial position has also required substantial support from its parent organization, HDPM Sin Pte. Ltd. HDPI secured a ₱573.8-million loan from the parent company, which separately provided another ₱1.67 billion in financial support.

This is not the first time HDPI has relied on additional capital to address its financial difficulties. In 2024, a ₱4-billion deposit for future stock subscriptions temporarily eliminated its capital deficit, allowing the company to report positive equity of ₱728.76 million. However, continued losses reversed that improvement in 2025.

DALI initially emerged as a disruptive force in Philippine retail, particularly during the pandemic, when consumers increasingly sought affordable alternatives to traditional supermarkets. Its neighborhood-based stores brought essential products closer to residential communities while challenging established retailers through lower prices.

But maintaining a low-price advantage requires more than attracting customers and expanding sales. The business must also control rental commitments, staffing, logistics, inventory costs, and other expenses that can quickly erode already narrow retail margins.

DALI has also encountered intellectual property disputes involving established brands over similarities between some of its offerings and existing branded products, adding another challenge to its operations.

With billions of pesos in accumulated losses, mounting liabilities, and continued dependence on parent-company financing, HDPI now faces the difficult task of demonstrating that its discount-focused business model can deliver sustainable returns.

Its expanding sales indicate that consumers continue to patronize the business. The bigger challenge is converting that demand into consistent profits without sacrificing the affordability that defines the DALI brand.