Philippines Retail Report Q2 2012
Business Monitor International, February 2012, Pages: 64
Philippines Retail Report provides industry professionals and strategists, corporate analysts, retail associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Philippines's retail industry.
An expanding population (especially in urban areas), rising consumer spending and the continued development of organised retail infrastructure are key factors behind the forecast growth in the Philippines’ retail sales. We forecast that the country’s retail sales will grow from PHP1.42trn (US$31.88bn) in 2012 to PHP1.59trn (US$35.78bn) in 2016.
The Philippines’ nominal GDP is forecast to reach US$233.6bn in 2012. Average annual GDP growth of 4.3% is predicted by BMI through to 2016, with nominal GDP reaching US$359.9bn. With the population expected to increase from 96mn in 2012 to 103mn by 2016, GDP per capita is forecast to rise by 47.5% by the end of the period, reaching US$3,492.
Although salaries in the Philippines remain low – BMI estimates the 2011 average annual wage at US$1,924 – household incomes are substantially bolstered by contributions from family members working overseas. In 2010, Filipinos overseas sent home a record US$18.8bn.
Filipino workers in the Middle Eastern region contributed around 15.7% of the US$1.6bn total remittance inflows in March 2011, and BMI is concerned about the potential impact of slowing remittance inflows as a result of political instability in the region. However, given that the bulk of remittance income currently originates from relatively stable Arab countries such as Saudi Arabia, we are still confident in the remittance growth story for now.
With the majority of remittances going into consumption rather than investments, the retail industry is one of the beneficiaries. In urban areas in particular there also are increasing numbers of dual-income, middle-class families and young professionals who are boosting retail sales.
The country’s growing youth population represents a key element of future retail spending. According to UN data, 36.7% of the Philippine population was in the 20-44 age range in 2005. This is forecast to increase to nearly 39% by 2015. The proportion of the population classified by the UN as economically active was 60.9% in 2005 and should rise to almost 63% by 2015. The urban population, which accounted for 62.6% of the total in 2005, is predicted to reach nearly 70% by 2015. About 50% of the country’s total retail sales are concentrated in the Manila metropolitan area.
BMI predicts that mass grocery retail will be worth US$13.07bn in 2012, 41.0% of the overall retail market. Internal investment in preparation for multinational arrivals and higher disposable incomes in Manila and major cities will drive sector sales growth; however, the country’s low level of food consumption and vast rural communities will restrict the potential of the mass grocery retail sector.
Consumer electronic sales are forecast to be worth US$4.72bn in 2012, according to BMI data, rising to US$6.0bn by 2016 and registering growth of more than 27%. This sector has significant growth potential because of a relative lack of penetration in key product categories, with PC penetration of less than 10% and LCD TV penetration of less than 1%.
A large and growing population, coupled with low levels of drug consumption, is likely to see sales of over-the-counter pharmaceutical products increase from US$0.88bn in 2012 to US$1.12bn by 2016, a rise of almost 27%.
Vehicle sales should rise by 39.1%, from 184,354 units in 2012 to 256,450 units by the end of forecast period as levels of car ownership slowly increase. The very low level of car ownership in the Philippines (far lower than Indonesia’s 13%) means the market has significant long-term potential.
Retail sales for the BMI grouping of Asian countries in 2012 are a forecast US$3.78trn. China and India are predicted to account for nearly 92% of regional retail sales in 2012, and by 2016 their share of the regional market is expected to be more than 92%. Growth in regional retail sales for 2012-2016 is forecast by BMI at 31.2%, an annual average of 9.0%. India is likely experience the most rapid rate of growth, followed by Singapore. The Philippines’ forecast market share of 0.8% in 2011 is expected to decrease to 0.7% by 2016.
Executive Summary
SWOT Analysis
Philippines Retail Business Environment SWOT
Philippines Political SWOT
Philippines Economic SWOT
Market Overview
Current Trends
Key Players
Industry Forecast Scenario
Consumer Outlook
Table: Retail Sales Indicators
Retail Growth Outlook
Table: Retail Sales Breakdown By Key Segment, 2012f
Macroeconomic Outlook
Table: Philippines – Economic Activity
Regional Retail Outlook
Table: Asia Pacific Retail Sales (US$bn), 2009-2016
Table: Asia Pacific Retail Sales By % Share, 2009-2016
Table: Asia Food Consumption (US$bn), 2009-2016
Table: Asia Pacific Macroeconomic Outlook, 2009-2016
Business Environment Outlook
Asia Pacific Retail Business Environment Ratings
Table: Asia Pacific Retail Business Environment Ratings
The Philippines’ Retail Rating
Limits To Potential Returns
Risks To Realisation Of Returns
Consumer Electronics
Philippines Consumer Electronics Market SWOT
Market Overview
Computers
Table: Computers Demand, 2008-2016
Drivers
Segments
AV
Table: AV Demand, 2009-2016
Mobile Handsets
Table: Mobile Handsets Demand, 2008-2016
Industry Forecast Scenario
Table: Consumer Electronics Overview, 2008-2016
Industry Developments
Automotives
Industry Forecast Scenario
Production And Sales
Table: Auto Production & Sales
Trade
Table: Auto Exports And Imports
Industry Developments
Mass Grocery Retail
Philippines Mass Grocery Retail Industry SWOT
Market Overview
Table: Mass Grocery Retail Market By Estimated Number Of Outlets
Table: Mass Grocery Retail Market – Sales By Format (US$bn)
Table: Mass Grocery Retail Market – Sales By Format (PHPbn)
Table: Average Sales Per Outlet By Format – 2010
Industry Forecast Scenario
Table: Mass Grocery Retail Sales – Historical Data & Forecasts
Table: Sales Breakdown By Retail Format Type
Industry Developments
BMI Methodology
How We Generate Our Industry Forecasts
Sources
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