THE crowds are back in the malls, and there is “cautious optimism“ in the second half of the year among members of the Philippine Retailers Association (PRA), the group’s chairman said on Friday.
Speaking to reporters covering the 38th National Retail Conference and Expo held July 31 and Aug. 1 at the SMX Convention Center, PRA chairman Roberto Claudio Sr. said 2025 has been a good take-off year for the retail industry.
“We continue to grow. There is cautious optimism. The tariff issues with the United States has [yet] to evolve … We need to see how it will affect our economy and the retail industry,” Claudio said.
The PRA has over 400 member companies, including mall and shopping center operators, traders and suppliers, manufacturers, distributors, wholesalers, and retailers.
“[We’re] a little bit cautious but optimistic for the second half. Optimistic because, for Filipinos, Christmas is never cancelled, so it’s really about preparation,” PRA president Alice Liu added, noting that, aside from the uncertainties of the US tariffs, weather disturbances including flooding also affect the retail industry.
“We were happy with our June performance. We lost [in] July. With nine days of continuous rain, that really brought down revenues. But it’s not a lost sale because people can’t get out of their houses, so they didn’t spend,” Claudio explained.
Flood control, he said, is very important: “We cannot control the weather, but we can prepare well enough to make sure that there is not too much disruption.”
And since more inclement weather is expected for the rest of the year, Liu said she hopes local government officials will step up to President Ferdinand Marcos’ Jr.’s admonition — referring to Marcos’ State of the Nation Address which touched on corruption in flood control projects.
E-commerce
E-commerce is another headwind in the retail sector, Claudio pointed out. “There is an unlevel playing field … which is affecting most of our retailers, specifically the physical stores. Everyone orders at Shopee [and other] online marketplaces. Traditional retailers are losing revenue,“ Claudio said, adding that the problem is compounded by the de minimis rule.
The de minimis rule, which has been in effect since 2016, exempts imported products valued at P10,000 or less from customs duties and taxes.
The PRA, which has raised the issue to the Department of Finance (DOF), as well as Trade and Industry, wants the de minimis rule scrapped, instead of amending the Internet Transaction Act (ITA).
In the ITA, digital services including subscription-based streaming platforms (Netflix, Spotify), online marketplaces and platforms (Lazada, Shopee, Airbnb), cloud services (Google Drive, AWS), digital advertising (Facebook and Google ads), and other services delivered through the internet are subjected to 12 percent value-added tax (VAT), on top of service fees charged to customers.
“They (DOF) are receptive to it, and said they’re going to look at it. But they’re eyeing possible reduction first. We can compromise, but we’d rather want it to be completely abolished because it’s going to affect the future of the retail industry,” Claudio said.
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