In the minutes of its annual general meeting which were posted on the Stock Exchange of Thailand, Thai retail group Siam Global House disclosed that the Philippines appeared attractive for Global House, which also operates – either via affiliates or subsidiaries – in Cambodia, Laos, Myanmar, and Indonesia.
The Thai company, which hinges its growth strategy on the expansion of its store network, is set to open its first branches in the Philippines by 2024 with its local partner, top supermarket operator Cosco, gaining a foothold in the country of 110 million people whose home improvement industry is expected to grow 8.9 per cent annually to 385 bn Philippine pesos (EUR 6.6 bn) by 2023. The resulting company, Global House Philippines Inc., is 55 per cent owned by the Thai powerhouse.
Two sites have been identified on the outskirts of the capital region of Metro Manila for the maiden outlets with construction set to start this quarter.
“The executives take an interest in store expansion to [the] Philippines … because the GDP growth rate is quite high, as well as the demand of construction materials increasing,” the minutes read.
The Philippine economy expanded 7.6 per cent in 2022, exceeding the official target of 6.5-7.5 per cent after finally shedding off pandemic restrictions that were deemed among the most stringent in the world two years after the onset of Covid-19. The national elections held last year, as well as revenge spending, also helped to boost economic activity.
Data from the Philippine Statistics Authority (PSA) likewise indicate a jump in the price of construction materials in the country in the same year. The construction materials retail price index show that prices of building supplies accelerated 5.6 per cent in December 2022, much faster than the 2.7 per cent growth it recorded in the same month the previous year.
However, signs of a slowdown – both in the economy and in the price of construction materials – are visible. The Philippine government itself has kept its GDP target this year at 6-7 per cent “in consideration of the risks posed by geopolitical and trade tensions, possible global economic slowdown, as well as weather disturbances in the country,” the country’s budget minister, Amenah Pangandaman, said.
In a February 2023 note, ING senior economist Nicolas Mapa also observed that key support for spending is set to "fade" this year as households tighten on expenses to rebuild savings. The spiralling inflation in the country – expected…