Philippines Retail Report Q3 2012
Business Monitor International, May 2012, Pages: 65
Business Monitor International's 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 PHP1.43trn (US$32.17bn) in 2012 to PHP1.61trn (US$36.31bn) in 2016.
The Philippines’ nominal GDP is forecast to reach US$233.6bn in 2012. Average annual GDP growth of 4.1% is predicted by BMI through to 2016, with nominal GDP reaching US$359.9bn. With the population expected to increase from 96.5mn in 2012 to 103.1mn by 2016, GDP per capita is forecast to rise 43.1% 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, with remittance inflows making up close to 10.0% of the overall economy. In 2010, Filipinos overseas sent home a record US$18.8bn.
Recent data show that remittances continued to grow strongly in October 2011, expanding by 6.2% from a year earlier to US$1.8bn. Remittances have proven in the past to be resilient in the face of a slowing global economy, and we expect this trend to continue in 2012.
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 (MGR) will be worth US$12.56bn in 2012, 39.0% 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, with sales forecast to reach US$17.97bn in 2016, a rise of 43.1%. While this will take MGR’s share of the overall retail market to 49.5%, the country’s low level of food consumption and vast rural communities will restrict the potential of the sector.
Consumer electronic sales are forecast to be worth US$4.66bn in 2012, according to BMI data, rising to US$6.14bn by 2016 and registering growth of almost 32%. 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 (OTC) pharmaceutical products increase from US$0.77bn in 2012 to US$0.96bn by 2016, a rise of more than 24%. Vehicle sales should rise from 155,140 units in 2012 to 216,717 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$3.77trn. China and India are predicted to account for nearly 92% of regional retail sales in 2012, and by 2016 their share of the regional market is expected to be more than 92%.
Executive Summary
SWOT Analysis
Philippines Retail Business Environment SWOT
Philippines Political SWOT
Philippines Economic SWOT
Philippines Business Environment SWOT
Market Overview
Current Trends
Key Players
Industry Forecast Scenario
Consumer Outlook
Table: Philippines Retail Sales Indicators, 2008-2016
Retail Growth Outlook
Table: Retail Sales Breakdown By Key Segment, 2012f
Macroeconomic Outlook
Table: Philippines – Economic Activity, 2011-2016
Regional Retail Outlook
Asia Pacific Retail Outlook
Table: Asia Pacific Retail Sales, 2009-2016 (US$bn)
Table: Asia Pacific Retail Sales By % Share, 2009-2016
Table: Asia Pacific Food Consumption, 2009-2016 (US$bn)
Table: Asia Pacific Macroeconomic Outlook, 2009-2016
Risk/Reward Ratings
Table: Asia Pacific Retail Risk/Reward 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: Philippines Computers – Demand, 2009-2016
AV
Table: Philippines AV – Demand, 2009-2016
Mobile Handsets
Table: Philippines Mobile Handsets – Demand, 2009-2016
Industry Forecast Scenario
Table: Consumer Electronics Overview, 2009-2016
Industry Developments
Automotives
Industry Forecast Scenario
Production And Sales
Table: Philippines Auto Industry – Production & Sales, 2009-2016
Industry Developments
OTC Pharmaceuticals
Philippines Pharmaceutical And Healthcare Industry SWOT Analysis
Market Summary
OTC Medicine Market Forecast
Table: Philippines OTC Medicine Sales Indicators, 2008-2016
Competitive Landscape
BMI Methodology
How We Generate Our Industry Forecasts
Sources
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