Philippines retail boom looms with eased restrictions

CEBU, Philippines — More foreign retailers are expected to enter the Philippines, including Cebu, this year, capitalizing on the country’s promising retail sector despite the disruptions brought about by the online retail platform.

According to Colliers Philippines, the interest of foreign retailers in entering the Philippines is largely driven by the enactment of the Retail Trade Liberalization Law, which eases restrictions on foreign ownership of retail businesses.

“Experiential retail and unique product offerings will dominate the market,” said Joey Roi Bondoc, director for research at Colliers Philippines.

He added that the efforts of retail giants to renovate and improve their physical mall aesthetics and expand leasable spaces have also caught the attention of global retail names.

Major developers like Ayala Land, SM, and Robinsons are renovating malls, including SM Megamall, SM East Ortigas, Robinsons Forum, and Ayala Center Cebu. Ayala Land has allocated P13 billion for upgrades to key malls, such as Glorietta and Greenbelt in Makati, Trinoma in Quezon City, and Ayala Center Cebu.

Cebu is one of the hotspots for foreign retail brands due to its positive performance in the post-pandemic era, said Robert Go, former president and spokesperson of the Philippine Retailers Association (PRA-Cebu).

Go, who also owns Prince Retail, noted that Cebu’s retail sector is set to benefit from active consumer spending, starting with the Sinulog Festival this January, the upcoming mid-term elections, and continued government support, further bolstered by rising cash remittances from Overseas Filipino Workers (OFWs).

“The retail sector is optimistic about continued growth,” said Go, highlighting the anticipated surge in consumer spending during the May mid-term elections and government assistance programs like the Ayuda Para sa Kapos Ang Kita Program (Akap). The Akap initiative, supported by a P26 billion allocation, will be implemented through the Department of Social Welfare and Development (DSWD) in partnership with the Department of Labor and Employment (DOLE) and the National Economic and Development Authority (NEDA).

Go also noted that low inflation, coupled with sustained overseas remittances, is expected to drive retail sales further.

However, he cautioned that a potential rise in the dollar exchange rate could impact non-food prices, particularly oil.

The January Sinulog Festival and heightened tourism spending have already provided a strong start to 2025, further bolstering Cebu’s retail performance, he added.

Retail trends for 2025 include immersive experiences, family entertainment centers, larger food halls, and pop-up stores designed for market testing.

Shopping mall developers have begun expanding and building more shopping and leisure facilities in Cebu. Ayala Land Inc. (ALI), the developer of Ayala Malls, is set to open the first “Entertainment Mall” in Mandaue City, marking the company’s third Ayala Mall in Metro Cebu.

In an earlier interview, ALI Senior Vice President Mariana Zobel de Ayala said the new mall is one of many projects planned for Cebu in the coming years. “Many global brands are looking to expand in Cebu,” Zobel affirmed.

ALI’s flagship mall, Ayala Center Cebu, is undergoing a major renovation to introduce an experiential shopping and leisure concept. Dubbed the “Capital of Fun,” the new shopping and leisure destination will feature a four-story mall within the 17.5-hectare Gatewalk Central in Mandaue City. The development will also include a nine-story business process management (BPM) tower, among other amenities.

Similarly, Top Line Business Development Corp., the property development arm of Viking Land Corporation, is set to open the first Business Process Outsourcing (BPO) Mall in Cebu.

Located in Liloan, northern Cebu, the P500 million “Bay Mall” is scheduled to open in the first half of 2025. This public-private partnership (PPP) project between Viking Land and the municipality of Liloan broke ground in 2022 and is situated on municipal land in the town center near Liloan’s coastline.

In October 2024, SM Supermalls opened its 87th shopping mall in the Philippines, SM JMall, located in Mandaue City, Cebu. The Japanese-inspired SM JMall is the fifth SM shopping center in Metro Cebu.

With these developments, Cebu’s retail industry is poised for sustained growth in 2025, driven by strong economic fundamentals and evolving consumer preferences.