Foreign retailers are very interested to invest in the Philippines following the relaxation in the capital requirements and other conditions for investors in the domestic retail trade sector, the National Economic and Development Authority (NEDA) said.
In a presentation at the British Chamber of Commerce of the Philippines (BCCP) webinar that tackled the newly enacted Republic Act No. 11595 (“RA 11595“), otherwise known as “An Act amending Republic Act No. 8762 or the Retail Trade Liberalization Act of 2000 (RTLA), NEDA Director Bien A. Ganapin said foreign retailers are just waiting for the law to be finalized with the issuance of its Implementing Rules and Regulations (IRR).
According to Ganapin, Japanese retailers are interested in convenience store expansion and specialty restaurants while Indonesians are keen on pharmaceuticals and China in food service and motor vehicle retail operations. Retailers from South Korea are looking at investing in feeds and food franchises while UAE retailers are looking at setting up medical equipment as well as food detailing.
“These are just some of the potential investment themes that signify their interest to explore opportunities here in the Philippines,” said Ganapin.
Ganapin also expressed confident that the IRR of the newly amended law will be approved this month.
President Rodrigo Duterte signed into law RA 11595 on Dec. 10, 2021, lowering the paid-up capital requirement for foreign retail enterprises.
RA 11595 sets a single minimum paid-up capital requirement of P25 million for all foreign-owned retail trade enterprises, and lowers the minimum investment requirement per store to P10 million.
The new minimum paid-up capital requirement is subject to review by the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), and the NEDA every three years from the law’s effectivity.
RA 11595 also removes the requirement for a Certificate of Prequalification and the need to show compliance with the criteria for prequalification under the old Retail Trade Liberalization Act of 2000 to the Philippine Board of Investments, before a foreign retailer can invest in or engage in a retail trade business in the Philippines.
The law also removes requirement of public offering of shares, encourages foreign retailers to have a stock inventory that are made in the Philippines.
RA 11595 also mandates compliance with the provisions of the Labor Code of the Philippines on the determination of non-availability of a competent, able, and willing Filipino citizen before engaging the services of a foreign national.
The law also reduces the penalties provided in the RTLA for violation of its provisions from imprisonment of six to eight years to four to six years, and a fine from P1 million to P20 million to P1 million to P5 million.