Wholesale & Retail Trade

The retail and the wholesale trade industries in the Philippines remained to be a crucial driver of the economy. In 2012, the industry is the second major contributor to the country’s GDP. Trade accounts for the 17.7 percent of the country’s total output which was preceded by manufacturing sharing 20.5 percent. The same economic structure is true in Central Visayas where Cebu is the center of trade.

Cebu’s strong and growing economy that led to increased consumers’ purchasing power pushed the retail trade industry to expand further. Despite the intense competition in the industry, major industry projects are underway across the province. Very visible are the aggressive expansions of SM, Robinsons and the Gaisano companies.

The strength of the retail industry of Cebu is buoyed by the dynamism of the Philippine Retailers Association – Cebu Chapter (PRA-Cebu). With the aim of making the retail industry of Cebu a significant driving force of the country’s development, PRA-Cebu guides its members to become globally competitive that meet international trade standards. The industry, however, faces a challenge on how to drive the non-PRA members, who are mostly micro and even ultra-micro in scale, towards competitiveness and standards. The retail industry in Cebu is largely characterized with trading of nondurable goods; and is dominated by micro enterprises (Sari-Sari Stores) estimated to be around 60 percent of the total retail trade of the province.

Wholesale trade in Cebu is as significant as its retail trade industry. The operation of various local and multi-national manufacturing companies in Cebu is central to its high volume of wholesale trade. Textiles, footwear, processed food, vegetable oil, chemicals and furniture are the top wholesale trade products of Cebu. Other important products in the province’s wholesale trade that are consistent in the trade list are cosmetics, candles, electronics, costume jewellery and guitars. Cebu has always provided a conducive environment for wholesale trade to thrive as infrastructures and facilities crucial to the industry are almost always available. These include warehousing facilities, international standard sea port, shipping/transport services, and Cebu’s intra/inter-regional and international transport connectivity. Commodity flow data compiled by the National Statistics Office reveals that the value of goods/products (mostly, if not all, are wholesale) moved from Cebu is among the country’s highest, suggesting a gainful wholesale trade industry in Cebu.

Further, despite the stability and growth of the entire industry, it is also worth noting that a significant number of retail and wholesale trade operations are unaccounted. These are those who belong to the underground economy. With the size of operation of most industry players, registering, accounting and reporting their outputs were, most often, not of interest to these micro businesses. While there is no data that shows the magnitude of unaccounted trade in Cebu, the Philippine total underground economy is estimated to be around 40 percent of the country’s total based on a study conducted by the World Bank. Looking at Cebu’s economic profile and trend, which is akin to that of the country totals, it is in all likelihood that the province’s underground economy is also about that size.

Nonetheless, trade in Cebu, whether accounted or not, remains to be a major economic driver of the country. The prospect for the industry’s stable growth has never weaned; thus, Cebu shall always be the center of trade in the Visayas.

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