Retail sector to account for 20% of GDP in 10 years

MANILA, Philippines - The Philippine retail sector is poised to grow and account for a fifth of the country’s total economic output in 10 years as the business process outsourcing (BPO) industry continues to expand and consumption spending rises.

Philippine Retailers Association chairman emeritus Samie Lim told reporters the retail sector has the potential to grow its contribution to the country’s gross domestic product (GDP) to 20 percent in 10 years from last year’s 13 percent.

This, as he noted that the BPO sector which employs young individuals with purchasing power, is expected to continue growing.

“It (retail sector’s GDP contribution) could grow because as you know the BPO sector is still growing…A lot of them (BPO workers) are single and still living with their parents. They have excess money,” he said.

He also said more foreign retail brands are expected to come to the country on expectations of rising consumption spending as the economy continues to grow.

“Foreign retailers have been coming in the last three years. We can expect influx this year and much much more after this year,” he said.

Trade Secretary Gregory Domingo said during the 18th Outstanding Filipino Retailers and Shopping Centers of the Year Awards Night he is also optimistic on the growth of the retail sector.

“The future looks very bright for retail,” he said noting that while several foreign retail brands have already set up shop in the country, many are still planning to enter the Philippine market.

The increasing GDP per capita of the country is also seen to benefit the retail sector.

The country’s GDP per capita reached the $3,000 level as of the end of last year.

“From an economist’s standpoint, that area $2,500 to $3,000 GDP per capita is really the takeoff point where in you will see tremendous increases in consumer spending and where do they spend it? In stores, restaurants and your brands,” Domingo said.

He said the retail sector is likewise set to continue to post gains as the country is expected to sustain its strong economic performance over decades.

“The GDP growth pattern of the Philippines, clearly, it appears, will be multi-decade,” he said.

The economy grew by 6.1 percent last year, after expanding by 7.2 percent in 2013.