Despite the seemingly positive effect of the increasing purchasing power of Cebuanos to the retail industry, the sector is troubled with negative factors brought about by the surging oil price increase, rice crisis, and wage hike issues.
Philippine Retailers Association (PRA-Cebu-Chapert) president Jonathan Jay P. Aldeguer said retailers are now very cautious and are constantly monitoring developments on the oil price, rice shortage issues, among others pose as growth barrier to Cebu’s dynamic retail sector.
“It has been a ‘crazy-happily’ years for the retailers. We thought that the economy was going to be stable as indicators last year were in good shape such as the stock market and active IPOs. But this year, we have encountered a curve ball with so many issues affecting the economic landscape,” Aldeguer said.
He said the retail industry will not be spared by the threatening effects of the negative issues that surfaced, which includes the US economic recession.
“Until these issues are fixed, the retail industry is facing a rough road ahead,” said Aldeguer, who is also the president of Island Souvenirs Inc. (ISI).
On the other hand, amid these threats, Aldeguer is confident that Cebu’s retail industry will be able to withstand the threat saying “Cebuanos are very resilient, there’s something about Cebu that we thrive during crisis.”
He mentioned that even during the economic crisis in 1997 which lingered for so many years, he said there were a lot of new shops that opened in Cebu, while the region is experiencing economic recession.
This time, Aldeguer said the vibrant retail industry in Cebu may expect a downtrend in the next few months as an effect of negative issues hounding the country’s economy, he said those retailers who are resilient enough, and are prepared to brave the obstacles, will still win the fight.
In fact, he said that high-end brand retailers are still enjoying a “good ride” these days, still benefiting the good and improving purchasing power of the Cebuanos.
Economists projected earlier that the strengthening of the peso to the US dollar could trigger “consumer finance crisis” especially for real estate and retail.
A decline of consumer demand was expected as OFWs are bound to keep their money, instead of spending, because of the lower value of their hard-earned dollars.
Economists Cayetano Paderanga and Rolando Avante earlier warned that a possible slowdown in the retail sector is expected, while value of OFWs salaries has decreased because of the strengthening peso.
The strong peso, although an indication of a good economic landscape in the Philippines in the macro level, could also trigger a slight decline in the consumer demand—especially to the dollar-earning consumer base.
In Cebu however, aside from the OFWs, increasing number of highly paid Outsourcing and Offshoring (O&O) workers have also fueled the dynamic retail trade here.