Tag: economics

2026 has been a disappointing economic year for the Philippines as the gross domestic product (GDP) growth has been weaker than last year, inflation this year has been higher and local businesses are struggling in a variety of ways. There is still a glimmer of hope for local retailers as a modest sales boost could happen this coming Christmas season as more shoppers seek value, according to a news article by BusinessWorld.

To put things in perspective, posted below is an excerpt from the news article of BusinessWorld. Some parts in boldface…

PHILIPPINE RETAILERS may see a modest boost in sales during the holiday season, although consumers are likely to be more price conscious and seek better value for money amid persistent inflation and tighter household budgets, analysts said.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said he expects retail sales to recover in the fourth quarter, but this may be affected by rising prices.

“I expect Philippine retail sales to strengthen in the fourth quarter compared with the preceding quarter, supported by the traditional Christmas spending season, remittances, year-end bonuses and holiday-related purchases. However, I expect the recovery to be uneven, particularly with inflation accelerating to 7.2% in September,” he said in a Viber message.

Headline inflation quickened to an over three-year high to 7.2% in September from 6.1% in August and 1.7% a year ago, as prices of food, transport and utilities surged.

“Higher food, transportation and utility costs are putting renewed pressure on household purchasing power, which could limit the usual holiday spending boost. Consumers may still spend more during the Christmas season, but I expect them to become increasingly selective about where and how much they spend,” Mr. Arce said.

Fuel retailers raised pump price for three straight weeks in September as global oil prices surged amid the reescalation of the Middle East war.

COL Financial Group Research Analyst Denise Joaquin said consumer spending in the fourth quarter will be supported by seasonable holiday spending and “some lift in disposable income from recently mandated minimum wage hikes.”

A P60 wage increase in the National Capital Region took effect on Sept. 26, raising the minimum wage for nonagricultural workers to P755 from P695.

“But given the pressure on household budgets, we expect the quarter to be marked by cautious, value-driven spending rather than a broad-based holiday boost,” Ms. Joaquin said.

Mr. Arce said consumers are likely to be more price conscious, comparing prices in physical stores and online platforms before making purchases.

“Value-for-money products, promotional bundles, private-label offerings and affordable discretionary purchases should attract stronger demand,” he said.

Ms. Joaquin expects food and beverage businesses, and grocery retailers to hold up relatively well in the last few months.

“In a tight consumer environment, spending on essentials like food tends to stay steady even as shoppers cut back on other areas. The holiday season should also help, since higher store traffic and seasonal spending typically lift sales in the last quarter,” she added.

BDO Securities said consumer demand will likely be resilient in the “seasonally strong” fourth-quarter period, but high inflation and slower remittances may dampen discretionary spending.

“While consumers are becoming more price conscious, holiday spending should remain supported by strong seasonal demand,” it said.

BDO Securities said consumers are likely to favor “value-for-money” categories, which will benefit retailers like Puregold Price Club, Inc. and SM Retail.

“Retailers with compelling value propositions and sustained promotional activity are best positioned to capture and defend market share,” it said. “We also see opportunities in convenience retail, where accessibility and smaller-ticket purchases should support foot traffic.”

Mr. Arce said Robinsons Retail Holdings, Inc. may also be relatively resilient because its chain of supermarkets, drugstores and convenience stores cater to regular household needs.

“These formats should remain relatively defensive because they serve recurring consumer needs, although margins could still face pressure from higher operating costs and promotional activity,” he said.

Mr. Arce said demand for discretionary goods may vary for the rest of the year.

“Affordable apparel, beauty products, personal care and holiday gifting could benefit from seasonal demand, while higher-ticket purchases such as furniture, home improvement and certain premium products may remain more sensitive to household budgets,” he said.

Mr. Arce said he expects strong performances from retailers “with exposure to essential consumption, competitive pricing, efficient inventory management and healthy balance sheets.”

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think Filipino customers will spend enough to create a modest sales boost for retailers this coming Christmas season? Do you think online shopping portals and independent online sellers pose a serious threat to Filipino-owned physical stores when it comes to the Christmas shopping season? How often do you shop at bazaars or at shopping malls during the Christmas season?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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