E-commerce Sales in Philippines Poised to Outpace Traditional Retail

MANILA, Philippines — The country’s retailers expect traditional store sales to rise by up to 10 percent this year, but e-commerce sales are likely to grow faster due to lower prices. Philippine Retailers Association (PRA) chairman Roberto Claudio told The STAR that traditional store sales are expected to grow by five to 10 percent this year. However, he said e-commerce sales are expected to grow faster, at 10 to 15 percent this year. He said many consumers are moving to online platforms for purchases because they offer more convenient shopping, wider inventory selection and lower prices due to the de minimis rule. Under the de minimis rule, imported goods valued at P10,000 or lower are exempt from duties and taxes. “Growth has moved to this category of e-commerce where online foreign shipments are not subjected to VAT (value-added tax) and customs duties, creating an uneven playing field in terms of government regulations,” Claudio said. The PRA has long pushed to remove the de minimis rule to promote fair competition between traditional stores and e-commerce. Claudio said the PRA expects overall sales growth to be supported by holiday-season consumption. “Growing population and OFW (overseas Filipino worker) remittances will continue to boost consumers’ confidence for this holiday season,” he said. While PRA expects higher consumption leading up to the Christmas season, he flagged the unfavorable weather as a risk. “Continuing weather disturbances have slowed shopping expenditures,” he said. The local retail industry accounts for about 18 percent of the country’s gross domestic product. It also employs about 12 million to 15 million Filipinos and contributes around P800 billion in annual taxes to the government.