Department of Tourism weighs next moves for ailing Duty Free Philippines

PHILIPPINES. Duty Free Philippines Corporation’s (DFPC) future operating model and the fate of its Fiesta Mall post-arrivals duty free store are being reviewed by new Tourism Secretary-designate Christina Garcia Frasco.

Frasco met with DFPC officers on Friday 22 July. DFPC is an attached agency of the Department of Tourism and in her new capacity Frasco serves as Chairperson of the DFPC Board.

Pre-pandemic, Fiesta Mall was a hugely popular post-arrivals duty free shopping stop for returning balikbayans (overseas Filipinos)

During the meeting, DFPC Chief Operations Officer Vicente Pelagio Angala discussed the pending closure and possible relocation of the corporation’s custom bonded warehouse and its flagship store – the Fiesta Mall – as a consequence of the COVID-19 crisis. The DFPC lease on Fiesta Mall and the warehouse ends in mid-2023.

Tourism Secretary-designate Christina Garcia Frasco listens to a presentation from Duty Free Philippines Corporation Chief Operations Officer Vicente Pelagio Angala (foreground)

However, Angala told The Moodie Davitt Report today that while relocating Fiesta Mall was the Board’s original plan, the new direction of the Secretary is to renegotiate a lease agreement with the lessor. “It will be very expensive for DFPC to transfer its flagship store and relocate the head office and warehouse,” he said. “Negotiations with the landlord are ongoing.”

According to the Department of Tourism, Secretary Frasco shared some mechanisms to maximise Duty Free Philippines’ revenues. Notably, she touted the idea of public-private partnership ventures to make the DFP stores globally competitive and profitable for the agency.

DFPC revenues have been devastated by the pandemic’s impact on travel and tourism. According to a report by local media Business Mirror, sales fell to UD$35 million in 2021 from US$211 million in pre-pandemic 2019.

Losses increased +47% year-on-year to US$9.93 million, which compared to a 2019 profit of US$8.4 million.

Angala said he was optimistic that sales will return to 2019 levels by 2025 based on International Air Transport Association projections of a global tourism recovery by that year.

In a Viber message, Frasco told BusinessMirror: “Of course, any financial hardships for any government agency are a matter of grave concern and moving forward, I fully intend to ensure that the attached agencies improve both their performance and revenue stream.”

Tourism Secretary-designate Christina Garcia Frasco and Duty Free Philippines Corporation Chief Operations Officer Vicente Pelagio Angala gather with other officials for a photo-shoot after the meeting 
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