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I remember the days when I would look forward to fetching a relative arriving from abroad because that would mean a chance to visit the duty-free store at the Ninoy Aquino International Airport (NAIA).

This was a rare chance to buy imported items that could not be found at local stores here and at affordable prices.

Returning or visiting overseas Filipinos were of course the main customers of Duty-Free Philippines, which offer tax-free items like appliances, liquor, perfumes, groceries and apparel.

But then world trade liberalization happened and so did retail trade liberalization. Many imported items that were a rarity back then in the Philippines became easily accessible. I used to enjoy visiting Hong Kong because that would mean another chance to buy stuff from Watsons. The opening of retail trade to foreign outfits saw Watsons partnering with the SM Group to set up stores here. Going to Singapore meant getting to shop at Giordano which was perennially on sale there. But now Giordano stores are all over the country.

Almost every famous foreign brand item can now be bought in the Philippines. There was nothing in our duty-free stores operated by Duty Free Philippines Corp. (DFPC) that cannot be bought even at cheaper prices at our malls.

One lawmaker pointed out that while DFPC made sense way back in the 1980s because of the foreign exchange crisis back then, this set-up no longer makes economic and business sense now. Aside from calls for its privatization as early as 2018, DFPC also had to navigate through severe financial challenges in 2020 due to the pandemic as travel restrictions in many countries led to a sharp decline in tourist arrivals.

DFPC was organized into a corporation in 2009 and was tasked to operate the duty and tax-free merchandising system in the Philippines. Its flagship store, Fiestamall opened in 1997.

DFPC, however, has undergone significant restructuring and modernization to recover from pandemic-era losses and declining sales.

Last month, it opened its newest store at NAIA Terminal 3 as part of its broader modernization strategy which includes future projects like additional outlets in the arrival areas of Terminals 1 and 3.

In January, DFPC highlighted a strategic shift toward high-traffic travel locations and cited closer alignment with global duty-free retail trends that increasingly focus on digital upgrades and updated store formats.

It has been observed that the transition is also prompted by the ageing layout and growing maintenance needs of its flagship Fiesta Mall as well as the redevelopment of NAIA which has been renovating its stores and enhancing its services to advance its ambition to become world-class.

DFPC is upgrading its Terminal 1 store and expanding its Terminal 3 location to 6,000 square meters, establishing the largest duty-free space in Philippine airport retail.

The new store at Terminal 3 carries a curated selection of liquor, wines, chocolates and cigarettes, including travel retail exclusives and other items not found in regular stores.

DFPC officials said that they want to grow the footprint of Duty Free and revive its glory days through expansion and new offerings.

Meanwhile, the agency is also opening its outlets to more concessionaires and brand partners to create a more diverse retail environment as it builds stores that reflect how travelers move, shop and expect service today.

The recent opening of DFPC at Terminal 3 is more than a retail expansion. Positioned for easier access at one of the country’s busiest gateways, the new store signals something more fundamental: a government retail corporation recalibrating itself to remain competitive, visible and relevant. It is modernization made visible and a reminder that reform, properly understood, is not instability. It is responsibility.

Duty Free Philippines was never designed to function as a private clubhouse for long-entrenched commercial interests. It is a government-owned and -controlled corporation under the Department of Tourism, tasked with one thing above all: serve travelers and generate revenue for the country.

If that requires recalibration, then recalibration it must be.

Today’s leadership decision to open its concessionaire ecosystem to new players is a welcome market correction.

Travelers are not naïve. They compare prices instantly. They know when a bottle of liquor or a luxury fragrance costs the same, or even less, in domestic retail chains.

The duty-free advantage cannot rely on nostalgia. It must rely on competitiveness.

Retail pricing is influenced by global supplier negotiations, sourcing scale, distribution structures and corporate strategy. DFPC does not dictate how private chains price their products. But it does control who operates inside its own commercial spaces and how productive those spaces should be.

If concession performance no longer aligns with market realities, leadership has not only the right but the obligation to review and diversify. Anything less would be complacency.

Resistance to reform is predictable. Long-standing operators naturally prefer continuity. Stability is profitable. Competition is uncomfortable. But public corporations are not mandated to protect comfort. They are mandated to protect public value.

Opening the door to new concessionaires does three things immediately: first, it introduces competitive pressure; second, it expands product diversity and third, it signals that performance is measured, not assumed.

The alternative is far more dangerous: stagnation disguised as stability.

Around the world, competitive duty-free environments rotate brands, refresh concession contracts and recalibrate retail mix constantly. The Philippines cannot expect different results while operating under older assumptions.

If DFPC is to remain relevant, especially in an era of aggressive domestic retail expansion, it must modernize not only its storefronts, but its internal ecosystem. The more visible and accessible footprint now seen at Terminal 3 is proof that DFPC is recalibrating outwardly.

That same discipline must apply inwardly — to concession structures, performance standards and commercial partnerships. Expansion without reform is cosmetic. Reform without expansion is incomplete. Sustainable competitiveness requires both. That includes reassessing who operates within it.

Reform does not target individuals. It targets inefficiencies. The DFPC leadership is not dismantling the institution. It is strengthening it, aligning it with its mandate to drive tourism revenue and improve the traveler experience.

No public corporation should be immune from review. No concession structure should be permanent by default. No retail environment should assume competitiveness without testing it.

It is the basic discipline of governance.

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