PHILIPPINE RETAILING
1ST QUARTER 2018
Riding on the Wave of this
ASIAN CENTURY
By: Ma. Alegria S. Limjoco
President, Philippine Chamber of Commerce and Industry
Vice Chairman, Philippine Retailers Association
Retailers and businessmen, in
general, are facing exciting times in
the near and far future for we are
now in the ASIAN CENTURY. With
many doors opening for our country,
let us see where we can make
an impact in terms of creating an
uplifted quality of life for our people. Since we are not yet seeing the promises of this new
administration fulfilled, as shown by the Ease of Doing
Business listing where the Philippines is Number 111,
we still have a lot of work to do to address this. Also,
in the 2017 Global Competitive Index, we are No. 56
out of 137, just above South Africa, Brazil, Cambodia,
and Laos.
If we do our job, in 2050, the HSBC report sees the
Philippines in the 16 th slot, a +27 change in rank from
previous HSBC studies.
The Asian CenturY In real GDP, we are the fastest growing in East Asia, a
projected 7% in 2018 says the Eye on Asian Economies
Report of June 2017.
In his latest economic briefing at the University of
Asia and the Pacific (UA&P), renowned economist, Dr.
Bernardo Villegas, revealed that whereas in the last
100 years, the United States, Japan, and Europe led
the way. This century it will be Asia, namely China,
India, and the five ASEAN countries. I was proud to
hear him say that the Philippines is included in the
ASEAN 5 along with Indonesia, Malaysia, Thailand,
and Vietnam.
Take a peek at his Gross Domestic Product (GDP)
statistics from the World Economic Outlook database
of IMF, October 2016:
more disposable income by a young population (95%
are in the age 0-64 age group), domestic consumption
increases.
Professor Roni Balbiera of UA&P also reported an
interesting result of studies that we are the last country
in the world to have a REGULAR POPULATION
PYRAMID, meaning, we are born, we work, and get
old. We have a huge chunk belonging to the working
age population. The young at the bottom and the old
at the top:
In fact, in the “Next 11 Emerging Engines of Growth”,
we are included with 2 other ASEAN countries –
Indonesia and Vietnam.
We have the youngest population wherein most
are 23 years old. From 1952 to 2015, our trend did
not change. That is why all over the world, in most
continents, they are importing Filipino employees
who are young, industrious, always smiling with
superb customer service, English speaking, educated,
family-oriented, and caring. We send off 6,000 OFWs
everyday who contribute to our double digit billion
dollar remittances.
SHIFT FROM AMERICAN TO
ASIAN CENTURY
Aside from food and beverages where 40% of our
family expenditure is concentrated, our people now
travel a lot because of budget airlines, hotels, and
increased tourism infrastructure. From 2017 to 2022,
about 50 million domestic tourists are projected to visit
the country’s popular destinations and discover less
travelled spots.
Compared to Vietnam, our agriculture sector is still in
a sorry state and mismanaged and therefore, more
investments must be infused to invigorate this sector,
but in the right direction. Based from the United
Nations Trademap and UA&P Analytics, we earned
mainly from bananas and pineapples only.
Manufacturing now is growing faster, thanks
to manpower intensive industries whose labor
requirements were previously contracted to China but
are now in ASEAN and Taiwan instead.
The Philippines: Where Are We?
The Philippines has a 6.8% growth as of the last three
quarters of 2017. Villegas’ esteemed colleague, Dr.
Victor Abola, also of the UA&P, attributes this to robust
domestic demand, driven by investments and high
consumption, and largely, on a strong external position
where we have large dollar reserves (we are the 3 rd in
Asia) and low external debt.
He maintains, however, that to sustain faster growth,
we need to strengthen domestic demand further by
spending on infrastructure; building up of capital goods;
going on with residential constructing; job creation
in manufacturing, BPOs, tourism, as well as double
digit growth of Overseas Filipino Workers (OFW)
remittances, which we are still enjoying at present.
14
However, the Asian Development Bank (ADB) still
considers our 2018 growth rate as very conservative
compared to Myanmar’s hefty 8% and, therefore, says
we are still middle class. If we do not reform, Vietnam
will overtake us, especially, because they are doing
extremely well in agribusiness, a sector where we are
underdeveloped and which our policy makers have
neglected.
What Path Do We Take Now?
Since the Philippines has so much savings (23.1 %
in 2015 says ADB), we have capital for business.
Banks have so much cash they can embark on more
investments.
Since other countries are happy to work with us,
judging by the many BPOs in the country and OFWS
employed abroad, infusion of money continues. With
Infrastructure spending by the government is now
bullish. If the Duterte Administration fulfills its BUILD
BUILD BUILD promise, we will benefit from the PPP
projects that will link our archipelago together and with
the rest of the world.
With the “best is yet to come” scenario combined with
safety nets and a keen eye for opportunities in places
and industries mentioned above that are left for us to
explore and develop, there is a lot to rejoice about.
We in our respective business community can help
steer our country to economic heights that will
hopefully and finally eradicate poverty, equitably
distribute wealth and health, and uplift our masses
to new levels of empowerment not seen in the last
century.