More opportunities in our retail sector: A step toward economic recovery

Published January 12, 2022, 12:05 AM

by Manila Bulletin

E CARTOON JAN 12, 2022

Looking forward to a post-pandemic scenario, the retail sector in the country poses a promising part in our journey to economic recovery.

Prior to the dent inflicted by the global pandemic, the Filipino consumer base was robust, which was composed of an expanding middle class also with an expanding disposable income. The country exhibited a strong economic outlook, driven mainly by spending of young professionals from the services sector such as the BPO industry, and from the remittances of overseas Filipinos whose families were snapping up goods from the automotive, property, and retail sectors.

The economic impact of the pandemic, which is more felt now as record-breaking numbers continue to rise on a daily basis, would be too enormous to chart, with some experts saying that repercussions would be felt for years to come. Given this situation, the government must do all it can, within the ambit of its powers, to uplift the business sector.

One of the “good news” in the economic front is the signing of Republic Act No. 11595, or the amended Retail Trade Liberalization Act (RTLA) by President Duterte last December 2021. Finance Secretary Carlos Dominguez III lauded the signing and cited the law as “crucial at this time when the country is recovering from the pandemic-induced global and financial crises.”

“As we continue our path to recovery, (this) economic liberalization bill…will be crucial to bringing in much needed foreign investments that would supercharge the economy and create a lot more jobs for Filipinos,” Dominguez said.

RA No. 11595 will simplify and ease restrictions for foreign retailers that wish to set up shop in the Philippines. For example, the minimum paid up capital for foreign investors in retail trade has been lowered to P25 million, or about one-fifth of the previous requirement of P125 million. It also removed other previous requirements that discouraged foreign retailers from setting up shop in the Philippines.

From a high of about P41.5 million, the minimum investment per store has been lowered to P10 million for those that have more than one physical store. This clearly encourages the setting up of as many retail outlets in different locations.

“By lowering the minimum paid-up capital and simplifying the qualification requirements, the amendments will aid in incentivizing foreign retailers to come in and create jobs. This will also enhance competition among enterprises, which will be beneficial to our consumers by providing more choices at lower and more competitive prices,” explained Dominguez. “These are welcome changes from the previous rule that disproportionately favored already-large enterprises and prevented diverse smaller investors such as startups from entering the local retail market.”

What is commendable with the law is that reciprocity is invoked. Foreign retailers may operate in the Philippines only if their country of origin also allows Filipino retailers to open businesses. The hiring of “competent, willing, and able Filipino citizens” is also prioritized; hiring of foreign nationals would be allowed only if there are no qualified Filipinos. The new law also encourages foreign retailers to have a stock inventory of products that are locally made.

With this law in place, attention must now be focused on its proper implementation and promotion. Our retail sector deserves all the help as it doesn’t only provide thousands of decent jobs and permanent employment, it is an exponential industry brimming with opportunities that may pave the way for our country’s post-pandemic recovery.

 
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