PHL franchising industry sees growth slowing down due to Persian Gulf crisis
THE Philippine franchising industry is expected to continue posting growth but at a slower pace this year, citing investors caution due to the Middle East crisis.
“The franchising industry will continue to grow, but at a slower pace, because every time there’s a crisis, people are always (turning) cautious,” Philippine Franchise Association (PFA) President Steve D. Benitez told reporters on the sidelines of the Franchise Asia Philippines’ 2026 International Franchise Conference on April 23.
“But it will not stop, especially those franchises that requires little capital. In every crisis, there is an opportunity,” he said.
Mr. Benitez said rising oil prices, may increase demand for specific types of franchises like convenience stores, as consumers reduce their spending on transport and discretionary purchases.
Nearly 70% of PFA’s members are classified as micro-, small-, and medium-sized enterprise franchisors.
The Philippine franchising industry grew by about 8% to 10% in 2025, it said.
Meanwhile, the retail industry is feeling the impact of the Middle East war, with higher fuel prices causing consumers to cut back, Philippine Retailers Association (PRA) President Alice T. Liu said.
“When the crisis started towards March, fuel prices went up. The knee jerk reaction of the consumer is to really cut back on spending, so retailers are all feeling that now,” she told reporters on the sidelines of the event.
“Right now with the fuel prices rolled back twice already, we are hoping that it will encourage a little bit more confidence,” she said.
Meanwhile, the recent easing of foreign investment rules for retail is expected to boost foreign participation and promote competitiveness in the industry, the PRA said.
“I hope we get foreign investors who put in real money to invest in the Philippines, and for our retailers also to be exposed to international trends and innovations, that will help increase their revenue,” PRA Chairman Roberto S. Claudio told reporters.
The Philippines’ 13th Regular Foreign Investment Negative List, which allows overseas investors to own as much as 40% of enterprises with paid-up capital of less than P25 million, “continues to safeguard the interests of Filipino retailers,” the PRA said in an April 18 statement.
It noted that the 13th Negative List retains the same clarificatory footnote contained in the 12th Negative List.
“This footnote reiterates the existing requirements for foreign retailers investing in the Philippines, namely: a minimum paid-up capital of P25 million, reciprocity from their home country allowing Filipino retailers to operate therein, and a minimum investment of P10 million per store,” PRA said.
The group added that the easier foreign ownership rules for retail companies would create jobs and widen consumers’ access to other goods and services. — Beatriz Marie D. Cruz
