•GDP Trend

•Consumption Patterns

•Industry Shifts

•Availability of Credit

•Level of Disposable Income

•Import/export factors

•Income differences by region/consumer groups

•Monetary policies

Fiscal policies

• Inflation rate

•Tax rates

•Unemployment trends

ECONOMIC FACTORS

 The decrease in the Gross Domestic Product (GDP) growth rate by 0.2 percent in the first

quarter of 2020 could be considered a threat because it could lead to a recession where

business revenues can decrease.

 A threat has been imposed by the decrease in Household Final Consumption Expenditure

(HFCE) by 0.2 percent in the first quarter of 2020 with a decrease by 4.9 percent in

essential items and the non-essential items by 4.7 percent which may result to limitation

in buying pharmaceutical products to maximize a family’s lessened household budget.

pandemic since people tend to buy more health supplements and medications to avoid

getting sick.

 Availability of credit for payment made via credit cards such as Visa or Master Card is an

opportunity in a way where sales increases when some payments are done through credit.

 The estimated average family income of P267,000 annually in 2015 is a threat because

families can only afford to buy medicines suitable to their limited budget.

 There is a threat in the import of both raw materials and finished goods in Filipino

Pharmaceutical Industry due to the tariffs paid that could result to price increase of

goods.

 A high imbalance level in income differences by consumer groups more focusing on poor

people in younger groups than of rich people in older groups, with an increase in the

retired groups over time is an opportunity since the poor are in focus where enterprise can

base product prices for higher affordability.

 An Inflation Rate of 2.0 by February 2020 is considered an opportunity since prices of

goods could decrease.

 There is a Value-Added Tax (VAT) of 12% on medicines here in the Philippines

exempting prescribed medicines for diabetes, hypercholesterolemia, and hypertension

which is a threat because of the higher price of goods in which poor people cannot afford.

 There is an opportunity in the unemployment rate at about 2.16 percent in our country

since it could mean that more employees are employed and can afford to buy

pharmaceutical goods.
 The increasing Philippine imports in pharmaceutical products serves as a threat for the

company.

Data shows that the number of imported pharmaceutical products are increasing with

the latest record of US$1.82 billion worth in 2019 based to the database on

international trade of United Nations COMTRADE. It is considered a threat since this

could result to an increase in retail prices due to tariff.

 An increase in the demand of generic drugs imposes an opportunity to the company.

Consumers are shifting to generic drugs in treating illnesses due to the increase of

retail prices for imported drugs. A forecasted growth at Compound Annual Growth

Rate (CAGR) of 6.4% during 2019-2023 has been found by Ken Research. The

forecasted increase in demand in generic drugs predicts the growth of sales in

pharmacy retail industry in the country.

 A decrease in US dollar to Philippine peso exchange rate signifies an opportunity to the

company.

The current exchange rate from US dollar to Philippine Peso is P48.60 as of today,

lower than the previous periods. The appreciation of the currency imposes an

opportunity for the company since the strengthening peso makes the import of
 pharmaceutical products and raw materials less expensive. This could result to higher

affordability due to lower consumer prices.

 Decreasing number of unorganized pharmacies opens an opportunity to the company.

Food and Drug Administration (FDA) has been terminating business licenses of

“ghost pharmacies” or unorganized stores that work without a licensed pharmacist.

This is a great opportunity for the company since number of competitors decreases in

the pharmacy retail industry here in the country.

 The implementation of Maximum Retail Price in drugs and medicines is a threat to the

company.

The pharmacy retail industry will be affected by the government’s decision to

implement the second phase of the Maximum Retail Price as it deprives Filipino

consumers to acquire innovator drugs to treat critical illnesses for lower prices while

also causing investors to back out.

Bangko Sentral ng Pilipinas. (2020). Consumer Price Index, Inflation Rate And Purchasing

Power Of The Peso. BSP. https://www.bsp.gov.ph/statistics/spei_pub/Table%2033.pdf

Cruz-Abrenic, M. S. E. (2020, August 10). COVID-19 and Pharmaceutical and Medical

Industry Supply Chains. Lexology. https://www.lexology.com/library/detail.aspx?

g=4201968e-ade1-4d17-b43c-f8713f8a2893

Dias, N. (2017, January 12). The Philippines’ Pharmaceutical Market. Slideshare.

https://www.slideshare.net/NadiaDias5/the-philippines-pharmaceutical-market-70933101

Lambojon, K., et al. (2020, July 1). Prices, Availability and Affordability of Medicines with

Value-Added Tax Exemption: A Cross-Sectional Survey in the Philippines. PubMed

Central (PMC). https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7400398/

Mercury Drug. (n.d.). Mercury Drug - The Leading Drugstore in the Philippines. Retrieved

October 30, 2020, from https://www.mercurydrug.com/terms-and-conditions.html#:

%7E:text=Payment%20for%20your%20order%20shall,card%20(Visa%20or

%20MasterCard).

Philippine Statistics Authority. (2016, October 24). Average Family Income in 2015 is Estimated

at 22 Thousand Pesos Monthly (Results from the 2015 Family Income and Expenditure

Survey) | Philippine Statistics Authority. Psa.Gov.Ph. https://psa.gov.ph/content/average-

family-income-2015-estimated-22-thousand-pesos-monthly-results-2015-family-income
Philippine Statistics Authority. (2020, June 7). GDP declines by 0.2 percent in the first quarter

of 2020; the first contraction since fourth quarter of 1998 | Philippine Statistics

Authority. Psa.Gov.Ph. https://psa.gov.ph/content/gdp-declines-02-percent-first-quarter-

2020-first-contraction-fourth-quarter-1998#:%7E:text=GDP%20declines%20by

%200.2%20percent,of%201998%20%7C%20Philippine%20Statistics%20Authority

Philippine Statistics Authority. (2020, July 20). Consumption Patterns of Resident Households in

the Philippines | Philippine Statistics Authority. Psa.Gov.Ph.

https://psa.gov.ph/content/consumption-patterns-resident-households-philippines-0#:

%7E:text=July%2020%2C%202020-,Consumption%20patterns%20of%20resident

%20households%20in%20the%20Philippines,per%20capita%20income%20decile

%20class.&text=In%20first%20quarter%202020%2C%20Household,percent%20in

%20first%20quarter%202019.

Statista. (2020, October 28). Philippines - Unemployment rate 2020.

https://www.statista.com/statistics/578722/unemployment-rate-in-philippines/#:

%7E:text=In%202020%2C%20the%20unemployment%20rate,from%203.6%20percent

%20in%202014. Valenzuela, M. R., et al. (2017). Income and Consumption Inequality In

The Philippines: A Stochastic Dominance Analysis Of Household Unit Records. ADB.

https://www.adb.org/publications/explaining-filipino-households-declining-saving-rate

Bank of the Philippine Islands. (2020, October 30). Foreign Exchange Rates | BPI. BPI Express

Online. https://www.bpiexpressonline.com/p/2/2091/indicative-exchange-rates
Di Rosa, A. (2020, June 26). Exchange rates against the Dollar [Illustration]. Export Planning.

https://www.exportplanning.com/en/magazine/article/2020/06/26/covid-crisis-and-

philippine-peso/

Manila Bulletin. (2020, February 24). The unappreciated pharmaceutical business.

https://mb.com.ph/2020/02/25/the-unappreciated-pharmaceutical-business/

Research News Today (RNT). (2019, July 24). Philippines Pharmacy Retail Market is driven by

the High Sale of Prescription Drugs Coupled with Growth in the Private Label

Medicines: Ken Research Analysis. Research News Today.

https://www.researchnewstoday.com/philippines-pharmacy-retail-market-is-driven-by-

the-high-sale-of-prescription-drugs-coupled-with-growth-in-the-private-label-medicines-

ken-research-analysis-65108.html

Research, K. (2019, September 4). Philippines Pharmacy Retail Market is Expected to Reach

Around PHP 300.5 Billion by the Year Ending 2023: Ken Research. PR Newswire.

https://www.prnewswire.com/news-releases/philippines-pharmacy-retail-market-is-

expected-to-reach-around-php-300-5-billion-by-the-year-ending-2023-ken-research-

300911337.html#:%7E:text=Expected%20increase%20in%20the%20demand,the

%20forecast%20period%202019%2D2023

Trading Economics. (2020, October). Philippines Imports of Pharmaceutical products - 1996-

2019 Data | 2020 Forecast.

https://tradingeconomics.com/philippines/imports/pharmaceutical-products

(Di din ako sure kung tama APA ko HAHAHAH)