THE Senate has approved on third and final reading a measure that aims to further relax qualifications for foreign retailers to enter the Philippines.
Voting 20-0-0 the chamber, last week, May 19, 2021, passed Senate Bill (SB) 1840, seeking to amend Republic Act (RA) 8762, otherwise known as the Retail Trade Liberalization Act (RTLA) of 2000.
Sen. Aquilino “Koko” Pimentel III, chairman of the committee on trade, commerce and entrepreneurship and sponsor of SB 1840, said the measure aims to encourage foreign investments by removing some barriers for foreign retail investors interested to engage in retail trade in the country.
Under SB 1840, the paid-up capital for foreign retail enterprises will be lowered to P50 million from the current US$2.5 million.
Under the current RTLA, foreigners are allowed to set up enterprises with a minimum paid-up capital of $2.5 million and in no case shall the investment for establishing a store be less than $830,000.
The proposed measure also mandates foreign retailers’ country of origin to allow the entry of Filipino retailers.
To protect the micro and small enterprises in the country, SB 1840 will require foreign retailers who wish to put up more than one physical store to invest at least P25 million for each store.
“It is the policy of the state to promote consumer welfare and protect investments that will bring down the cost of products for Filipino consumers and create a competitive retail environment that encourages innovation,” Pimentel said, in a statement.
The amendatory bill also removes the pre-qualification requirement for foreign retailers to have been in the retailing business for the past five years and to have at least five retailing branches anywhere in the world.
SB 1840 also requires foreign retailers to maintain the P50 million paid-up capital in the Philippines at all times and failure to do so would subject the foreign retailer to penalties and restriction to engage in any future business in the Philippines.
On the hiring of employees, the bill requires all foreign retailers to comply with the applicable provisions of the labor code on the determination of non-availability of competent, able and willing Filipinos before engaging the services of foreign nationals.
The bill also encourages foreign retailers to have a stock inventory of products that are made in the Philippines. (PR)