Physical or "brick and mortar" stores will continue to have challenging days ahead of them, according to economist-congressman Joey Salceda of Albay's 2nd district.
Salceda gave this assessment in reaction to the June 2022 Labor Force Survey report of the Philippine Statistics Authority (PSA).
"I expect things to continue getting harder for brick and mortar stores as malls have begun to charge previously deferred or reduced rental payments," the House Committee Ways and Means chairman said.
Salceda was referring to the mall owners' earlier decision to defer or reduce rent charged from their tenants as a way to help them recover from the effects of the Covid-19 pandemic.
He said this problem on rental payments on the part of the physical store operators are "on top of the tighter competition due to online shopping networks, which also tend to be tax advantaged as we find it harder to enforce VAT (value-added tax) on online sales".
Salceda said that based on the jobs report, it is the local wholesale and retail industry that suffered the most in terms of job loss.
"The most notable figure from the jobs report is the one on the wholesale and retail trade, which lost 1.2 million jobs. That is almost as much as the jobs gain in agriculture, at 1.26 million," the Bicol solon noted.
"What this could indicate is that inflation is constraining people from spending on more discretionary items. Disposable income remains subdued, as I also stated regarding the July 2022 inflation report," he said
"The major job losers in that sector are supermarkets and department stores (192,000), hardware stores (189,000), and online or direct sales (144,000)," Salceda said, citing the report.
"Overall, I see continuing job weakness until inflation pressures abate," he further said.