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Manila Market Intelligence: December 22, 2020


NEDA reviews 26 infra projects


National Economic and Development Authority (NEDA) Acting Secretary Karl Kendrick Chua said that 26 out of 104 infrastructure projects are under review to ensure that the projects are ready for implementation. For the 2021 General Appropriations Act, infrastructure accounted for PHP1.1 trillion (USD22.9 billion) or 5.4% of Gross Domestic Product (GDP). Acting Secretary Chua mentioned that they project the creation of 1.7 million direct and indirect jobs under the infrastructure program in 2021. NEDA Undersecretary Jonathan Uy added that they hope to finalize the list of projects by the end of 2020.



Data from the Department of Budget and Management (DBM) show that infrastructure spending as of 10M 2020 reached PHP508.5 billion (USD10.6 billion), down 18.4% YOY. This is also lower than the government’s target of about PHP824.9 billion (USD17.2 billion) or 4.5% of GDP by the end of 2020. Colliers believes that higher infrastructure spending for 2021 should help support the country’s economic recovery  and benefit the property sector. In our view, the continued construction of public projects such as roads and bridges is likely to stoke the property segment and help developers plan their new projects in the next 12 to 24 months. The timely approval and implementation of the 2021 national budget should also support the construction of infrastructure across the country. Among the projects likely to be completed between 2021 and 2022 are the LRT-2 East Extension, Cavite-Laguna Expressway (CALAX), Skyway SLEX Extension, MRT Line 7, BGC-Ortigas Link Bridge and the NLEX-SLEX connector road. Once completed, we see these projects benefitting Cavite, Laguna, Batangas, Bulacan, Rizal and key cities within Metro Manila.The implementation of more projects outside the capital region should also help landlords and tenants planning to diversify and build more offices and residential units outside of Metro Manila

PHL finishes in lower half of rankings for digital readiness


In a study by Tufts University and Mastercard Inc. entitled Digital in the Time of COVID, the Philippines ranked in the lower half out of 90 countries surveyed in terms of digital infrastructure. The country ranked 64th in digital evolution and 52nd in digital momentum. On the other hand, the Philippines fared better in terms of fostering digital trust and user experience at 28th and 10th place, respectively. The rankings were determined based on more than 350 indicators.

Both mall operators and retailers adopted omnichannel retailing strategies as a response to the pandemic-induced interruptions in the retail market. Consumers have started to rely more heavily on online shopping given the limited mobility and implementation of health and physical distancing measures within malls.. As of the end of August 2020, the total value of InstaPay transactions reached PHP141.2 billion (USD2.9 billion) with a monthly average growth of 31% from April to August 2020. As retailers continue to shift online, we expect e-commerce competition to intensify. We recommend that retailers maximize mobility maps to track consumer behavior. Further adoption of digital transformation in retail should also help retail businesses recover and tap pent up demand once consumer confidence recovers in the latter half of 2021.In our view, improving digital infrastructure and readiness should play a crucial role in retailers’ shift to online commerce.

Nielsen expects FMCG sales growth this holiday season


Nielsen Philippines projects sales of fast-moving consumer goods (FMCG) to rise during the 4th quarter of 2020, led by food and baking products.. Nielsen also sees consumer behavior changing due to the increased utilization of online shopping and single-serve purchases. From 2017 to 2019, holiday sales reached PHP96.7 billion (USD2 billion), higher than the PHP91 billion (USD1.9 billion) recorded in July and August from the back-to-school season. Meanwhile, the Philippine Retailers Association (PRA) projects sales to remain subdued this holiday season but believes that December will likely remain as the top sales month for 2020, particularly driven by online shopping.
Prior to the pandemic, consumer spending usually increases every fourth quarter of the year driven by holiday-induced spending. Results of the Q3 2020 Consumer Expectation Survey (CES) of the Bangko Sentral ng Pilipinas (BSP) or central bank showed that household spending outlook on basic goods and services in Q4 2020 declined to a record low 26.4%. This is likely due to the impact of the pandemic on household income and employment. Despite the subdued spending outlook this Q4 2020, the projected slight increase in sales will likely be driven by fast-moving consumer goods such as food and beverages given the holiday festivities. Both retailers and mall operators should continue to innovate to capture pent up retail demand. Retail players should ramp up the promotion of online platforms and  take advantage of the lockdown economy. In our view, retailers should also firm up partnerships with logistics providers and front distribution centers to offer same-day delivery services.



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Joey Bondoc

Associate Director



Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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