Retailers, fast food see Train sales boost
Implementation of the Tax Reform for Acceleration and Inclusion (Train) law boosted consumer demand and sales by retail firms and fast food chains, a Finance official said on Wednesday.
“The significant growth in sales reported by retail establishments and restaurants point to the fact that people now have more money to spend as a result of the hefty PIT (personal income tax) cuts under Train which is now benefiting 99 percent of our taxpayers,” Finance Assistant Secretary Antonio Lambino claimed in a statement.
Passed last December and implemented at the start of 2018, the Train law raised taxes on petroleum products and car sales, among others, in exchange for lower personal income tax rates.
The Finance department estimates that the law gave individual taxpayers, most of them compensation earners, a combined P12 billion in additional income.
Lambino said that since Train’s implementation, retail giants and fast food chains such as Robinsons Retail Holdings, Inc., Philippine Seven Corp., Puregold Price Club and Max’s Group Inc. had all reported more robust sales.
Robinsons Retail was said to have posted 9.6-percent profit growth in the second quarter with net sales rising by 13.5 percent to P31.5 billion, attributed partly to the increased take-home pay of consumers under the Train.
The P533 million in earnings of Philippine Seven, which licenses 7-Eleven convenience stores, was also up 19.4 percent in the first six months of the year despite the increase in commodity prices.
Retail sales in all stores amounted to P22.2 billion during the first half for a 22.7-percent hike from the previous year.
Lambino said that Philippine Seven had also pointed to lower personal income taxes under Train as the the reason behind the increase in sales.
For Puregold’s consolidated net sales, which increased by 13.2 percent to P64.03 billion, he said that these “benefited from higher consumer spending due to increased levels of take-home pay after the implementation of the Train.”
Max’s, which operates brands such as Max’s Restaurant, Pancake House, Krispy Kreme and Teriyaki Boy, saw net income rise by 34 percent.
Citing company disclosures and Bloomberg data, Lambino said first quarter sales of fastfood chains also rose, with McDonald’s and Jollibee reporting growth of 40.6 percent and 18.8 percent, respectively.
Real estate developers also benefited, Sta. Lucia Land reporting sales growth of 25.3 percent; Rockwell Land, 6.5 percent; Ayala Land, 18.8 percent; Megaworld, 8.1 percent; SM Prime, 11.1 percent and Century Properties, 104.5 percent, the Finance official reported.
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