BMI View: Owing to favourable economic conditions, the Philippines has successfully managed to elevate a large number of its population out of poverty and also increase overall disposable household incomes, particularly in urban areas. These economic improvements, as well as a relatively young population , are affected by the developments we now see in the Philippines retail market. N ever theless, the country's rural areas have experienced much slower growth, with traditional retail formats prevailing. Pavement vendors and open-air markets will continue to play a crucial role in the rural retail landscape and we foresee less dramatic changes in this area over our forecast period.
We retain our positive outlook for the Philippine economy, with real GDP growth forecasted at 6.0% in both 2015 and 2016, resulting in an increase employment and disposable incomes. However, a large part of the country's population remains employed in low-wage jobs in the agricultural and industrial sectors and will continue to be reliant on remittance inflows from Filipinos working overseas. We expect this to rise further over the coming quarters as more Filipinos move away and seek better job opportunities abroad. These trends will bode well for the retail sector. Not only will poverty in the country decline further over our five-year forecast period, but affluence levels will also increase, resulting in higher spending on the retail sector and strong growth in non-grocery and non-essential segments over the medium term.
Despite these improvements, the vast majority of spending will remain concentrated on essential purchases, particularly food & drink and utilities, which will account for a combined total of 60.2% of total spending in 2016. This is due to significant levels of poverty that persist in the country's rural areas. 53.8% of households still live on less than USD5,000 a year. The food & drink sector will receive additional boosts from the development and modernisation...
The Philippines Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.
BMI's Philippines Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.
- Benchmark BMI's independent retail industry forecasts for Philippines to test other views - a key input for successful budgeting and strategic business planning in the Philippine retail market.
- Target business opportunities and risks in Philippines through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
BMI Industry View
Summary of BMI’s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.
BMI Industry Forecasts
There are four separate 5-year forecast modules in the retail reports. These are:
- Headline Retail Forecast: Total household spending (local currency and USDbn, % growth, % GDP, per capita, per household), spending by retail sector (food & non-alcoholic drink, alcoholic drink, clothing & footwear, housing & utilities, furnishings & home, health, transport, recreation, education, restaurants & hotels, personal care & insurance (local currency and USDbn, % growth, % GDP, % of total spending)
- Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tablewear, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (USDbn, % Growth)
- Household Income and Numbers Forecast: Number of Households (‘000, % growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes – USD5000+, USD10,000+ USD50000+ (‘000, % of total); labour force, employment and unemployment (‘000, % change)
- Demographic Forecast: Total population; Babies 0-12 months; Young Children 0-4yrs; Children 5-9yrs; Young Teens and Older Children 10-14yrs; Older Teens 15-19yrs; Adults 21yrs +; Young Adults 21-29yrs; Middle Aged 40-64yrs (‘000, % growth, male, female); Urban Population (‘000, % population); Rural Population (‘000, % population).
BMI’s Retail Risk Reward Index
BMI’s Risk Reward Indices provide investors looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Provides a detailed country-specific analysis of the key trends and developments in the retail sector as a whole, as well as an assessment of the main drivers affecting the major retail segments including mass grocery retail, fashion, pharmacies, consumer electronics, home improvement and personal care. The market overview also considers the most effective store formats in a given country and the impact of these factors on the main international and domestic players’ development strategies.
This provides a brief overview of the key players in each subsection of the retail sector including MGR, Fashion, Home Improvement, Consumer Electronics, Pharmacies, and Department Store chains.
The Retail Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.