Local Retailers See Full Recovery This Year

Although still at single-digit growth, local retailers expect full economic recovery this year as the cooling inflation is driving consumption.

Photo Insert: Ong said that the recovery in the retail sector is largely driven by the resiliency of Filipino consumers that ultimately drive-up consumption.

Rosemarie B. Ong, president of the Philippine Retailers Association (PRA), told reporters at the Outstanding Filipino Retailers (OFR) Awards 2023 “Tibay Gabi ng Pagpupugay” said the continued easing in the country's inflation is good for consumers and retailers.

Inflation cooled down to a one-year low of 6.1% in May from 6.6% in April on slower increases in transport costs, food, and non-alcoholic beverages, the Philippine Statistics Authority (PSA) said.

PSA’s data showed that May inflation was the slowest since it settled at the same rate in June 2022. It, however, remained elevated compared to 5.4% a year ago.

Ong said that the recovery in the retail sector is largely driven by the resiliency of Filipino consumers that ultimately drive-up consumption. “We are expecting full recovery this year, definitely it is not double-digit but still a single-digit growth,” said Ong. Last year, the local retail sector also grew by single digits at par with the country’s 7.6 percent full-year GDP growth.

“Consumption is a big driver,” Ong said, citing that Filipinos are now going back to the malls after the pandemic.

Although some sectors are experiencing a tapering of growth and are not robust as in 2022 because of base effects, Ong said that there is still organic growth in most sectors. Growth will be driven by strong sectors such as basic commodities, food and beverage, and home improvements, among others, she said.

Ong, who is senior executive vice president and chief operating officer of Wilcon Depot Inc. – the country’s largest home improvement store chain, said their sector has also proven to be very resilient because everybody is focused on renovating and improving their homes.

She noted that the mobility restrictions during the pandemic period have resulted in revenge activities like home renovations.

The full reopening this year of the domestic economy also enabled Filipinos to catch up on their delayed travel plans. This helps domestic tourism and boosts micro small and medium enterprises (MSMEs).

“There is a domino effect and this is helping the MSMEs,” she said.

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