The bicameral body in Congress has approved the amended minimum investment hurdle for foreign retailer at P25 million with per store minimum of P10 million, industry sources said.
The amended Retail Trade Liberalization minimum investment hurdle for foreign retailers is up for formal approval of Congress before signing by President Duterte. Amendment to the 20-year old Retail Trade Liberalization Act is among the priority economic reform bills of the Duterte administration. It is aimed at attracting higher foreign direct investments and creating more jobs.
Earlier, the Senate approved an investment hurdle of P50 million while the House agreed for a lower P10 million minimum investment requirement for foreign retailers. The Philippine Retailers Association (PRA) said the P25 million minimum capital requirement at the bicam was seen as a compromise by both houses.
“With the present economic realities, this is not the right time to implement this,” protested Samie Lim, co-founder and chairman emeritus of the Philippine Franchising Association (PFA) and the Philippine Retailers Association (PRA).
Aside from the legitimate small and micro enterprises that will be affected, Lim, said the smaller medium size retailers will also be most affected. This is because, these retailers have to compete now with new foreign retailers which are equipped with efficient lower cost supply chain and government support.
They will also compete with the other sectors in the retailing industry that are not paying taxes.
For instance, he cited, the underground micro small retailers who do not pay the right taxes and wages. In addition, foreign e-commerce sites who do not even pay for rent, taxes/duties/VAT.
Local small and medium-sized retailers will have to face these foreign e-commerce sites that enjoy all the efficiencies of buying and selling from foreign suppliers.
In addition, the small and medium retailers will have to slug it out with large local retail chains, which have adopted all the modern tools and best practices of modern retailing.