Bill seeking to further relax Retail Trade Liberalization Act endorsed
Published Sep 24, 2019 07:30 pm
By Ben Rosario
The House Committee on Trade and Industry on Tuesday voted unanimously to endorse the passage of amendments to the retail trade liberalization that will further clear the way for more foreign investments in the local retail sector.
(MANILA BULLETIN FILE PHOTO)
Chaired by Valenzuela Rep. Wesley Gatchalian, the House panel invoked House Rule No. 10, Section 48 that allows a committee to conduct only one hearing before the passage of priority measures already approved on third and final reading during the previous Congress.
The lawmaker said the bill opens up the Philippine retail industry resulting in a greater variety of products, more choices of goods for consumers, the inflow of new technology and employment of more Filipinos.
The proposed measure consolidates five separate bills seeking to amend the Retail Liberalization Act by setting up the minimum paid-up capital of locally produced stock inventory requirements for foreign retail business enterprises.
“With this liberalizing measure, it is envisaged that foreign participation in retail trade business will increase considerably to create more jobs and better quality products at cheaper prices for Filipino consumers,” said Albay
Rep. Joey Sarte Salceda, chairman of the House Committee on Ways and Means and one of the authors of the bill.
The bill allows a foreign-owned partnership, associations, and corporations formed and organized under the laws of the Philippines, upon registration with the Securities and Exchange Commission and the Department of Trade and
Industry, or in the case of foreign-owned single proprietorships, with the DTI, to engage or invest in the retail trade business with a minimum paid-up capital of the Philippine peso equivalent of $200,000.
The measure removes the requirement under the Republic Act 8762, the Retail Trade Liberalization Act of 2000, for foreign investors acquiring shares of stock of local retailers.
It, however, deletes the requirement under RA 8762 for a public offering of shares of stock by foreign-owned retail enterprises.
The bill also eliminates the required net worth, number of retailing branches, and retailing track record conditions for foreign retailers to engage in retail trade in the Philippines.
The Philippine Retailers Association assailed the committee approval of the bill.
“If it comes into fruition, however, the proposed amendments will instead upset a careful balance first struck 19 years ago between government, the economy, foreign investors, consumers, and especially Filipino entrepreneurs,” the PRA said in a position paper submitted to the trade and industry panel.
“In other words, intends to strip the protection extended by law to micro-, small-, and medium-sized retail enterprises against foreign competition, of which many are unprepared against,” the retailers group said.
The bill permits only nationals from, or judicial entities formed or incorporated in countries which allow the entry of Filipino retailers to engage in retail trade in the Philippines.
It also reduces the required locally manufactured products carried by foreign retailers from 30 percent to 10 percent of the aggregate cost of their stock inventory.
Salceda said the amendments to the Retail Trade Liberalization Act will help boost the foreign direct investment (FDI) performance of the Philippines.
In a position paper, the DTI called for the immediate approval of the measure that will boost foreign investments in the Philippine retail industry.
Citing data of FDI inflow into the retail sector, DTI Undersecretary IreneoVizmonte noted the initial success of the passage of RA 8762 with investment surging to $31.3 million in 2000 from a zero base the previous year.
However, he said inflows saw an abrupt decline the following year at a value of $1.8 million.
“Reforms in the Philippine retail sector are timely given the significant changes in the investment pattern in the Association of Southeast Asian Nations with wholesale and retail trade receiving the largest FDI at $38.9 billion in 2017.
This sharp growth of 75 percent from $22.2 billion allowed this industry to overtake traditional main recipients of FDI, namely finance and manufacturing, which recorded investments of $31.6 billion and $15.6 billion, respectively,” Vizmonte added.
(MANILA BULLETIN FILE PHOTO)
Chaired by Valenzuela Rep. Wesley Gatchalian, the House panel invoked House Rule No. 10, Section 48 that allows a committee to conduct only one hearing before the passage of priority measures already approved on third and final reading during the previous Congress.
The lawmaker said the bill opens up the Philippine retail industry resulting in a greater variety of products, more choices of goods for consumers, the inflow of new technology and employment of more Filipinos.
The proposed measure consolidates five separate bills seeking to amend the Retail Liberalization Act by setting up the minimum paid-up capital of locally produced stock inventory requirements for foreign retail business enterprises.
“With this liberalizing measure, it is envisaged that foreign participation in retail trade business will increase considerably to create more jobs and better quality products at cheaper prices for Filipino consumers,” said Albay
Rep. Joey Sarte Salceda, chairman of the House Committee on Ways and Means and one of the authors of the bill.
The bill allows a foreign-owned partnership, associations, and corporations formed and organized under the laws of the Philippines, upon registration with the Securities and Exchange Commission and the Department of Trade and
Industry, or in the case of foreign-owned single proprietorships, with the DTI, to engage or invest in the retail trade business with a minimum paid-up capital of the Philippine peso equivalent of $200,000.
The measure removes the requirement under the Republic Act 8762, the Retail Trade Liberalization Act of 2000, for foreign investors acquiring shares of stock of local retailers.
It, however, deletes the requirement under RA 8762 for a public offering of shares of stock by foreign-owned retail enterprises.
The bill also eliminates the required net worth, number of retailing branches, and retailing track record conditions for foreign retailers to engage in retail trade in the Philippines.
The Philippine Retailers Association assailed the committee approval of the bill.
“If it comes into fruition, however, the proposed amendments will instead upset a careful balance first struck 19 years ago between government, the economy, foreign investors, consumers, and especially Filipino entrepreneurs,” the PRA said in a position paper submitted to the trade and industry panel.
“In other words, intends to strip the protection extended by law to micro-, small-, and medium-sized retail enterprises against foreign competition, of which many are unprepared against,” the retailers group said.
The bill permits only nationals from, or judicial entities formed or incorporated in countries which allow the entry of Filipino retailers to engage in retail trade in the Philippines.
It also reduces the required locally manufactured products carried by foreign retailers from 30 percent to 10 percent of the aggregate cost of their stock inventory.
Salceda said the amendments to the Retail Trade Liberalization Act will help boost the foreign direct investment (FDI) performance of the Philippines.
In a position paper, the DTI called for the immediate approval of the measure that will boost foreign investments in the Philippine retail industry.
Citing data of FDI inflow into the retail sector, DTI Undersecretary IreneoVizmonte noted the initial success of the passage of RA 8762 with investment surging to $31.3 million in 2000 from a zero base the previous year.
However, he said inflows saw an abrupt decline the following year at a value of $1.8 million.
“Reforms in the Philippine retail sector are timely given the significant changes in the investment pattern in the Association of Southeast Asian Nations with wholesale and retail trade receiving the largest FDI at $38.9 billion in 2017.
This sharp growth of 75 percent from $22.2 billion allowed this industry to overtake traditional main recipients of FDI, namely finance and manufacturing, which recorded investments of $31.6 billion and $15.6 billion, respectively,” Vizmonte added.