Good afternoon, everyone.  

Thank you, Philippine Retailers Association Chairman, Atty. Paul Santos, and President Rosemarie Bosch-Ong, for having me today. I would like to greet PRA Vice Chairs Jorge Mendiola and Bernie Liu, and the PRA Board of Directors. Thank you to our hosts for bringing us together. 

Retail trade in the Philippines has been vital and dynamic. From 2018 to 2022, and even amid the COVID-19 pandemic, retail trade’s share in our country’s quarterly gross domestic product, or GDP, stood at 14.3 percent on average. Of course, we all know that the retail trade has been adversely affected by the pandemic.   

We feel the repercussions until now. According to Bangko Sentral ng Pilipinas, overall consumer confidence, while it remains low standing at negative 5.2 percent, this signifies a huge improvement relative to a record low of negative 54.5 percent during the height of the pandemic in the 3rd quarter of 2020. We know that the improvement is due in part to the easing of restrictions, availability of more jobs and permanent employment, and additional income to consumers. With the lingering COVID-19 virus,  higher inflation, expected rise in interest rates, and depreciation of the Philippine Peso, our consumers cannot help but be pessimistic.  

But the Department of Trade and Industry (DTI) remains optimistic about retail trade’s future growth. The Philippine Retailers Association (PRA), too, expects a rebound for the rest of the year. And we see positive indications—from a recovery since the second quarter of 2021 has been 8.4 percent, the gross value added of retail from more than 500 billion pesos in early 2018 to more than 600 billion pesos in the first quarter of this year.  

And this growth has surely changed lives for the better. Apart from helping create jobs, your industry gives an important service to the public. You hold the important role of connecting manufacturers to consumers, co-creating an environment where empowered consumers can choose what they need and want for themselves, and helping enable a healthy and fair competition that we hope will bring quality products at good prices to consumers. 

The strength of your presence in the market is remarkable. The database of the DTI’s Business Name Registration System shows that Retail Trade of various commodities includes more than 50 percent of the total business name registrations with 305,058 out of 574,322 new and renewal registrations as of July 5th, excluding of course, those involved in vehicle and vehicle parts trade. Wholesale or Retail Trade of vehicle and vehicle parts. 

Let me share with you the Department of Trade and Industry’s prospects and plans to assist retail businesses in the Philippines.  

Now I know that we will have more conversations about how we can work together. And I would like to listen to you as much as I get to speak like right now. But for now, let me point you in five directions, areas where PRA and DTI can collaborate and where DTI can provide assistance. 

First, I believe that a defining challenge to the retail industry is its capacity to innovate and put digital transformation at the fore, especially that the economy has re-opened and PRA expects a rebound for the rest of the year. How can digital technologies enable your businesses to improve productivity, enhance efficiency, reduce costs, and earn more profit? 

This is an opportunity of great promise to retailers. The COVID-19 pandemic has facilitated the greater adoption of the digital economy in the Philippines. The e-Conomy Southeast Asia 2021 Report cites the Philippines as the fastest-growing digital economy in the region. Strong indications from both the supply and demand side of the internet economy are expected to sustain this. This year, the Philippines leads the way with online sales increasing by more than 25 percent. 

So, I encourage you retailers to continue engaging in digital transformation. The government has been working to ease and widen retailers’ adoption of the digital economy. Government efforts on policy are guided by e-commerce as “easy commerce”—safe, reliable, easy, and efficient everywhere. We don’t want digital platforms to be difficult for all involved, including merchants and consumers.  

The recently launched e-Commerce Roadmap 2022 outlines actions that seek to expand e-commerce by enhancing speed and security, and building enabling structures.  

In line with the roadmap, stakeholders from both the public and private sectors formed the e-Commerce Promotion Council or EPC. We appreciate the PRA’s membership in the EPC, and the participation of Chairman Santos among other PRA representatives in the EPC’s meetings this year. We hope to continue sharing with you updates on government initiatives on e-commerce and are open to hearing your concerns in future meetings. And I hope the PRA would consider carrying the torch for our online retailers.  

As part of the roadmap, we also seek to establish an e-Commerce Bureau, a “go-to” agency for matters to and for stakeholders of e-commerce. 

To promote responsible digital payments by consumers, and acceptance by micro and small merchants, we have created the Public-Private Working Group on the Digitizing Merchant Payments Project, of which the PRA is a member. We aim to reconvene the group this year so that we may pilot options for implementing and enhancing digital payments in your supply chains, and scale the digitization of payments at various points across the merchant value chain. 

This effort will be aligned with the objectives of: 

  1. Increasing the use of digital payments in a responsible manner at both physical and online merchants, particularly by identifying specific adoption and use barriers  
  2. Identifying and agreeing on actor-specific actions to drive merchant payment digitization, including time-bound pilots focused on specific segments of merchants;  
  3. Engaging national strategies and being part of national advocacy campaigns on digital payments; and 
  4. Sharing of experiences and lessons learned, and collaborating on mutual research interests such as merchant segmentation.  

Digitizing merchant payments is of utmost importance and that will be an important instrument for facilitating transactions between consumers and retailers. I urge PRA to recalibrate and accelerate digital transformation, especially of micro, small, and medium enterprises, by the promotion of digital payments, as well as digitalization of processes of retailers. DTI is going to work closely with the Department of Information and Communications Technology (DICT) to come up with platforms to accelerate the digital transformation of MSMEs, including retailers. I think if we are able to digitalize the operations of sari-sari stores or other similar small retailers, we will be able to build up a database that could eventually be the basis for the evaluation of banks of the credit worthiness of small retailers. This is because they will have the record of transactions, the purchase of fresh stocks, and the record of sales to customers through the process of digitalization of operations of small retailers. I really hope to work with our counterparts like in the DICT to help small enterprises achieve this digital transformation that we want to happen. I understand that in your midst is DICT Undersecretary David Almirol, who will be one of our champions and collaborators in this effort.  

Second, we seek the cooperation of retailers in our work for consumer protection and empowerment.  

The DTI will seek to establish more facilities that will protect and empower consumers. As you may know, one of our services is the E-Presyo, an online price monitoring system where consumers can check the prevailing prices of basic necessities and prime commodities. I believe this is an important initiative, and it will be one that we will complement with other efforts as we carry on with the goal of a safe consumer environment, with quality and safe products at reasonable prices. 

We aim to ensure the availability of basic necessities and prime commodities to our fellow Filipinos at affordable prices, and we will do so by closely monitoring prices so that there is no manipulation, there is no profiteering, there is no hoarding, and there is no cartelization, and when needed, negotiating with manufacturers and producers.  

We shall conduct an intensive review and verification process on granting requests for price adjustments. And we will keep track of price shifts from raw materials to finished products through our Consumer Protection and Advocacy Bureau. 

Let me also add that DTI continues to recognize businesses that uphold consumers’ rights and interests through the DTI Bagwis Program. This program recognizes retail establishments that promote and foster the highest level of business ethics and uphold consumer rights through responsible business practices.  

The DTI thanks the PRA for its continued assistance to the Consumer Policy and Advocacy Bureau in promoting responsible business practices, and encouraging PRA members to apply for the Bagwis Award. Members of the PRA who have been awarded the Bagwis Seal help the DTI ensure that consumers have access to establishments that are compliant with Fair Trade Laws, provide quality service, and have appropriate and efficient redress mechanisms. 

Third area of collaboration and assistance of DTI, we move forward with the gains in the amendments to the Retail Trade Liberalization Act, or RTLA, to improve our country’s attractiveness to investors, especially in the retail trade industry.  

We project that five years from its enactment, the amended RTLA will usher in additional foreign investments worth millions of pesosn and this will generate over hundreds of thousands of jobs.  

By simplifying the requirements of foreign entry, the law allows our country to be more competitive, facilitate more foreign equity into the retail trade industry, and generate greater economic and employment benefits. Liberalizing retail trade does not only encourage more investors to the country, but it also helps create a more competitive environment. It helps create more jobs and enables more technology transfer. We expect incoming economic activities to engage our growing middle class even more.  

The process, of course, is not as neat, and part of the efforts should include responding to investment barriers such as infrastructure, which is a major concern for investors. But these concerns have been addressed before and will continue to be addressed by the current administration. 

I hope that retailers will take advantage of the amendments to RTLA and the incoming investments toward their growth. And local investors can partner with foreign companies in this retail with less limits on the participation of our foreign partners. 

For our well-established retailers, I believe that you are competitive enough to be in a Philippine market with foreign entities. You are competitive enough to consider pursuing overseas markets where foreign entities come from. So that’s the quid pro quo, they establish here and we establish in their home countries. 

For our small retailers, don’t worry: there is a threshold for foreign entities’ paid-up capital when they enter the Philippines. We hope that you will find promise in the amendments as we have. You can be potential suppliers to large companies entering the market, and more competition can let you have more sources of inputs—enabling you to take part in both forward and backward linkages. While we want the Philippines to be globally competitive, we want to do what we can to protect our small enterprises.  

Foreign investments will usher in increased economic activity, help create jobs, and stimulate ancillary activities. This I want to keep on repeating. We build on the strong momentum of reforms we have so far pursued to foster a better business environment for all. 

Fourth area and collaboration of DTI with PRA, we ask for the collaboration of the Philippine Retailers Association to look into initiating a Philippine Skills Framework for Retailers, or PSF-Retailers. The proposal is to adopt the Singapore Skills Framework for Retail, with the proposed PSF seeking to help persons who wish to join and advance in the retail sector analyze their career interests, locate relevant training programs to enhance their skills, and prepare for the desired job roles. Such an investment in human capital allows our fellow citizens to engage in jobs and earn more that contributes to the larger economy of the country.  

Employers will be able to recognize these skills and invest in their employees’ training for career advancement and skill enhancement.  

Training programs can obtain insight into sector trends, existing and developing skills in demand, and build programs to meet the industry’s requirements.  

Your organization’s expertise will contribute to the development of retailers that are just starting or aspiring entrepreneurs interested in entering the retail sector.  

Fifth and last area of collaboration and assistance from DTI, we hope to have more conversations with you as we head in the direction of speeding up the recovery of businesses from the COVID-19 pandemic while developing the retail trade sector.  

The DTI has advocated for the reopening of the economy in compliance with minimum public health standards, while also stimulating demand and strengthening production capacities.  

We seek to continue enabling a virtuous cycle wherein the government proactively reduces risks and uncertainties to micro, small, and medium enterprises, as well as large companies. And we aim to provide necessary support and assistance that enables business continuity.  

This will have the effect of keeping jobs and household income that allows consumers to retain their spending behavior, which leads to strong domestic demand that buoys businesses and presents opportunities for businesses to expand.  

We will continue to encourage investments in initiatives that provide for basic necessities, contribute to Industry 4.0, and create more jobs. Our priority sectors previously included agriculture, industry, and services such as telecommunications. To be responsive to our issues on food and energy security, we will work harder in these areas. 

I hope we can have more conversations on what your sector will specifically need as we move forward. 

Let me end by saying that I want to make sure that we are doing everything we can to encourage and foster the growth of retailers across the Philippines.  

Maraming salamat po, mabuhay tayong lahat, at padayon! 

Date of Release: 7 July 2022