Retail transactions expected to fall 2-3% as Iran fighting dents remittances, confidence

By Beatriz Marie D. Cruz, Senior Reporter

THE Philippine retail industry could see the number of transactions processed this year falling 2-3% in response to the fighting in Iran, with activity dampened by higher supply chain costs and weak consumer confidence, analysts said.

“With the rise in crude oil prices… we anticipate a 2% to 3% reduction in expected retail transactions,” Philippine Retailers Association Chairman Roberto S. Claudio said via Viber. 

He said he expects the retail industry to sustain higher costs of doing business immediately.

The Iran crisis “will definitely affect Philippine retail businesses — we might see increased costs in the supply chain, logistics and production,” Mr. Claudio said.

The war in Iran has pushed up global oil and transport prices, putting pressure on household spending as consumers prioritize basic commodities, he said.

“Consumption could greatly reduce due to higher prices” and as consumers tighten their belts, Mr. Claudio noted.

Steven T. Cua, Philippine Amalgamated Supermarkets Association president, said the Middle East conflict adds to the existing uncertainties in the retail market after last year’s public works corruption scandal.

“Business sentiment and consumer sentiment is already down because of that (corruption). The spirits of the consumer are already dampened. And then all of a sudden, these geopolitical uncertainties happen,” he said.

Economic growth slumped to 4.4% in 2025 — the weakest in five years — as the corruption scandal involving government officials and contractors dampened government spending and household consumption.

He said higher oil prices will affect the cost of shipping and trucking for the retail industry, especially those with headquarters outside Metro Manila.

Domestic shipping firms have been cleared to raise boat fares and cargo rates to as much as 30%, the Maritime Industry Authority said last week. 

Last week, the supermarkets association and the Department of Trade and Industry released a joint statement agreeing to keep the prices of basic goods until April 16.

“The next problem is not price but supply. Will raw materials still arrive? Will producers be able to find alternate sources of supply for raw materials?” Mr. Cua said.

He also cited the need for government to explore alternative sources of energy to ensure power supply.