Philippine retailers navigate a changing market landscape

Retailers adapt to inflation, e-commerce challenges, and evolving consumer trends while pushing for fair competition and policy support.

The Philippine retail industry is facing significant challenges, from rising operational costs to increasing competition from e-commerce platforms. According to Roberto Claudio, President of the Philippine Retailers Association and Chairman Emeritus of Quorum Holdings Corp., inflation remains one of the biggest concerns.  

"The inflation factor is a very big issue as far as being able to be competitive in the market, and very difficult to maintain when the inflation rate is going up, which is affecting oil, power, salaries, cost of doing business, transportation," Claudio said. He emphasised that these rising costs are making it harder for retailers to remain profitable.  

Beyond inflation, the growth of e-commerce has created an uneven playing field for traditional retailers. "The total retail industry is supposed to be both the brick-and-mortar traditional retailer and the online players," he explained. "But for us, the existence of the two formats must be equal or level the playing field." Claudio called for stronger regulation, fair taxation, and consumer protection measures to ensure that both physical and online retailers operate under the same rules. "We don’t mind competition for as long as it is a fair competition," he said.  

The Philippine government has begun addressing these concerns with the recent passage of the Internet Transactions Act and the VAT on digital services. "We are getting the government to listen on this," Claudio noted, expressing optimism that these policies will help traditional retailers maintain competitiveness.  

To support small and medium-sized retailers, the Philippine Retailers Association (PRA) focuses on advocacy and membership development. "We have a very strong membership development program," Claudio said, highlighting initiatives such as the National Retail Conference and Exhibition (NRCE). "This is participated in by retailers all over the Philippines, and we do get some foreign attendance," he added. PRA also organises forums and retail circles to keep members informed about industry developments and to push for favourable policies.  

Looking ahead, Claudio remains optimistic about the Philippine retail market. "The Philippine market will continue to grow by sheer population, affluence," he said, adding that overseas Filipino worker (OFW) remittances will continue to support consumer spending. He also pointed to the implementation of the tourist VAT refund as a potential boost for retailers. "The VAT refund for tourists is going to be implemented starting this year towards the middle of this year," he said.  

Beyond domestic factors, Claudio sees regional trends shaping the industry. "We see tourists and movements of shoppers all over Asia," he noted, pointing to increased cross-border shopping among Asian consumers, particularly from India, Singapore, and Vietnam. However, global uncertainties, such as potential tariff policies under a new U.S. administration, could impact retail prices and economic conditions. "We don’t know what President Trump will do with tariffs, and how much retaliations will happen from one country to another," Claudio said.  

Despite these challenges, the Philippine retail industry remains poised for growth, with continued adaptation to digital trends, policy support, and regional market expansion.