Senator Risa Hontiveros has warned lawmakers that eliminating all restrictions to foreign ownership of the country’s domestic retail trade would not be a wise option, especially amid an economic crisis due to the coronavirus (COVID-19) pandemic.
Hontiveros said Senate Bill No. 1840 or the proposed Retail Trade Liberalization Act would only put local owners of “mom-and-pop shops, sari-sari stores, carinderias,” and even public market stalls at a disadvantage, and render them second class citizens in the Philippine business sector.
“Right now, this is not our wisest option. Imbes na makabawi at maka-recover an gating mga negosyante at manininda, ito ang bubulaga sa kanila (Instead of allowing our businessmen to recover from their losses, this would be a burden to them),” Hontiveros said in a statement.
The bill, which the Senate discussed during the plenary deliberations on Tuesday, seeks to lower the required paid-up capital investment for foreign retail enterprises to $300,000.
Hontiveros said that while she is not against foreign investments, lowering the minimum capital requirement for foreign businesses would defeat the micro, small and medium enterprises (MSMEs) in the country.
“These amendments will not help Filipinos…For now we have so many workers and small businesses who are part of the MSMEs. Let’s prioritize them,” she said in Filipino.
“We should provide them with protective shields in the free market, instead of pitting them against (those with) deeper pockets,” she stressed.
Senate Majority Leader Juan Miguel “Migz” Zubiri agreed with Hontiveros as he stressed the need for lawmakers to agree on a compromise amount in the minimum paid up capital requirement for foreign retail trade enterprises.
Zubiri said guaranteeing that the paid up capital for foreign entities “won’t be too low” prevents unfair competition.
“The meat of it all is iin that amount. Once we get that sweet spot among our colleagues, and we agree on that amount, then everything else is moot and academic, if I may use the phrase,” said Zubiri during the plenary deliberations.
Senate President Pro Tempore Ralph Recto also stressed the need to protect the MSMEs but said he has “no problem with expanding what retail is to include services” including restaurants, motor repair shops, or other trade services “subject to certain capital requirements.”
Sen. Aquilino “Koko” Pimentel III, sponsor of the measure, however, assured that the minimum threshold amount requirement in the measure will protect the MSMEs and the small business segment of the country.
“But should the amount be found not to be sufficient by the majority of our colleagues then we can adjust it. We can adjust it upwards…to make sure it will not contravene our intention to protect our micro and small businesses,” Pimentel said.