MANILA – The House of Representatives on Wednesday approved on final reading a measure that seeks to open up the country’s retail trade to foreign competition by lowering the capital requirements for foreign retailers.
With 156 affirmative votes, 13 negative votes, and 3 abstentions, the chamber approved on third reading House Bill No. 59, which seeks to set up the minimum paid-up capital and locally produced stock inventory for foreign retail business enterprises.
Marikina City Rep. Stella Quimbo, author of the bill, stressed the need to bring down the minimum paid-up capital for foreign firms engaged in retail trade business to USD200,000 from the current USD2.5 million.
“While this is still higher than income comparators in the Asean, this is a considerable reduction. The proposed threshold of 200,000 USD balances the need to be competitive in the Asean region and at the same time, to continue to protect micro and small establishments from foreign competition,” Quimbo said.
The bill seeks to remove the requirements under Republic Act No. 8762, or the Retail Trade Liberalization Act, for foreign investors acquiring shares of stock of local retailers; as well as for the public offering of shares of stock by foreign-owned retail enterprises.
It also proposes to eliminate the required net worth, the number of retail branches, and retailing track record conditions for foreign retailers to engage in retail trade in the Philippines.
Taguig City Rep. Victor Yap, another author of the bill, said the proposed amendments would “open up the Philippine retail industry, which would result in a greater variety of products, more competitive local players, the inflow of new technology, and more importantly, more jobs for Filipinos.”
Citing Philippine Statistics Authority data, Quimbo said only medium and large establishments would be directly affected by increased foreign competition under these amendments.
“This makes up less than 1 percent of all establishments that will possibly face stiffer competition from foreign retail firms,” she said.
“Kaya’t ang epekto ng pagbaba ng minimum paid-up capital ay dadami at titindi ang kompetisyon na haharapin ng mga dambuhalang kompanya at monopolyo (The effects of lowering the minimum paid-up capital would increase and big companies and monopolies would face tighter competition),” she added. (PNA)