Holiday spending not enough to offset losses from lockdowns

by Louise Maureen Simeon – The Philippine Star, 19 Nov 2021

MANILA, Philippines — The holiday season may be around the corner, but consumption remains muted as the pandemic continues to take its toll on cash-strapped Filipinos.

In fact, retail industry players said they are not optimistic the expected spike in the fourth quarter would be able to offset losses incurred from the lockdown measures imposed earlier this year.

In a webinar organized by the Cold Chain Association of the Philippines yesterday, the Philippine Amalgamated Supermarkets Association Inc. (PAGASA) said money remains a concern in driving up demand.

PAGASA president Steven Cua said even as improved sales can be expected this Christmas, it would not be able to compensate for losses over the past months.

“The pocket of Juan dela Cruz has holes right now. And where the money is coming from is very important,” Cua said.

“I don’t think a short period of time will be enough to offset the losses incurred in the on- and-off regulated lockdowns,” he said.

Historically, demand is high in the fourth quarter due to the Christmas season, during which people usually spend their bonuses and 13th month pay.

This was also the premise of business groups when they supported the third round of lockdown in August to immediately bring down the number of COVID cases and ensure the economy is open in the last quarter of the year.

However, job opportunities have yet to return, with unemployment remaining high, and those actually looking for work are declining.

Cua said the May 2022 polls may help alleviate the sales situation once candidates distribute food packages and other grocery items during their campaign.

Royal Cargo Inc. president and CEO Elmer Sarmiento said consumption is increasing amid the pent-up emotion of Filipinos to spend.

“I think that will be good for the industry, for meat processors, for groceries, and meat importers,” he said.

But Sarmiento warned that increasing demand would prompt continued tightness in the shipping industry, leading to port congestion and high freight rates.

Shipping costs are still on the rise, vessel delays remain, and container and equipment shortage persists as the global economy recovers.

“No one is sure when this will normalize at all. This whole sea freight fiasco seems not to be going away soon,” Sarmiento said.

The Philippine Association of Meat Processors Inc. sees demand picking up as the economy reopens, but this will not reach pre-pandemic level until 2023.