Domestic retailers are balancing speed and cost as they continue to navigate the country’s rising logistics expenses, while remaining cautiously optimistic about closing the year on a positive note, according to Alice T. Liu, president of the Philippine Retailers Association (PRA).
Speaking to reporters during the opening Thursday of the 32nd National Retail Conference and Stores Asia Expo (NRCE) 2026, which gathered the country’s largest retailers as well as micro, small, and medium enterprises (MSMEs), Liu underscored the significant impact of logistics costs on the retail industry as businesses distribute products nationwide.
“My joke to the my team is the next trillionaires in the Philippines will be those who are able to figure out how to move goods,” she said, noting the challenges of transporting goods across an archipelagic country. She added that it is encouraging that the government is making efforts, such as expanding the roll-on/roll-off (Ro-Ro) port network, to improve inter-island connectivity.
While there is no official figure, Liu said logistics costs account for a significant share of retailers’ overall operating expenses.
To illustrate the high cost of logistics in the Philippines, Liu pointed out that it is cheaper to ship goods from China to Manila than from Manila to Mindanao.
As a result, she said, retailers have to strike a balance between speed and cost. Faster deliveries come at a higher price, while slower deliveries are generally more economical.
Meanwhile, Liu expects the retail industry to post single-digit growth this year, although some companies could still achieve double-digit growth.
She said larger retailers have been hit hardest this year because they shoulder higher overhead costs, including utilities, rent, and wages. In contrast, MSMEs are generally more agile and can adjust more quickly to changing market conditions.
“I think food is still a little bit okay. The other retailers, the only way you can grow right now is really to excel in your own store operation’s efficiency, product product development. so that you can continue to grow,” added Liu, who is also president and CEO of the country’s leading clothing retailing chain Golden ABC Inc..
Liu also cited the continued growth of e-commerce, which she said is steadily taking market share and revenues from traditional brick-and-mortar retailers. While legitimate retailers pay taxes, she noted that much of the informal online market remains underground, adding that it has become very easy for anyone—including students—to sell products through various social media platforms.
In addition, Liu said the recent wage increase has dealt a significant blow to retailers, an industry that accounts for 18 percent of the country’s total workforce. While the PRA supports both the wage increase and the government’s objectives, she said the group hopes the government will consult with the industry to ensure that future wage hikes remain affordable for employers and allow domestic businesses to continue thriving.
