Philippine companies adjust strategies to combat inflation and weak peso

From switching ingredients to staggering price increases, Philippine companies are rethinking strategies to cover rising costs without losing customers squeezed by inflation and a weak peso.

“Shifts in consumer spending and higher credit costs are weighing on select names across real estate, telecommunication, banking, and consumer discretionary,” said Juan Paolo Colet, managing director at China Bank Capital.

Revenue pressures could intensify later this year if growth remained weak and inflation stayed high, Colet said, making it important for companies to strengthen operational efficiencies to better weather the headwinds.

For now, restaurants are rethinking expansion, food makers are limiting price increases and telecoms companies are leaning on prepaid plans to support consumption.

Food cuts

Shakey’s Pizza Asia Ventures, which saw first-half profit fall by a third, said inflation and surging fuel prices weakened non-essential spending. Aside from promotions, the restaurant operator is slowing expansion and being more selective on investments, while restructuring its Peri-Peri chicken chain.