(By Elijah Felice Rosales, Business Mirror)
Local retailers asked the government to keep their foreign counterparts out of the small and medium enterprise (SME) competition by retaining the minimum paid-up capital for offshore investors at $2.5 million.
In a statement, the Philippine Retailers Association (PRA) said it rallies behind Sen. Panfilo M. Lacson in his appeal to keep foreign firms, particularly those coming from China, out of the SME industry. It also demanded that the government give priority to the interests of small businesses by maintaining the minimum investment for foreign retailers at $2.5 million.
“This is exactly what PRA is fighting for: the retention of the $2.5-million minimum investment for foreign retailers. There [are] moves to repeal this law to bring down the minimum threshold to just $250,000. The existing law protects our Filipino SME entrepreneurs,” the statement read. “We now see the proliferation of Chinese restaurants, Korean groceries, foreign operators in our tiangge [flea markets], even before the repeal of the existing law.
In effect, they are operating in violation of the retail trade law,” it added. Consolidated House Bill (HB) 9057 and Senate Bill (SB) 1639, authored by Sen. Sherwin T. Gatchalian, seek to relax, if not eliminate, minimum capital and requirements in retail trade.
While HB 9057 only intends to bring down minimum capital to $200,000, SB 1639 aims to remove the investment threshold once and for all. In his explanatory note in the bill, Gatchalian argued that further opening up retail trade to foreign participants will create more employment opportunities.
HB 9057 is awaiting plenary deliberations, while SB 1639 is pending committee discussions.
The PRA said in the statement that it is “speaking for the future of our small Filipino entrepreneurs” in calling for the retention of minimum investment for foreign retailers at $2.5 million. Large retailers apparently can hold their own against their foreign competitors, but not small retailers. The group added “it is a win-win situation” for the Philippines if the government keeps the existing investment cap.
“This will encourage foreign retailers to [jointly] venture with Filipino entrepreneurs to pursue if they want to do business in the Philippines. It is a win-win situation to encourage more foreign investment, [while] at the same time, protecting our SME Filipino entrepreneurs,” the statement read.
In a radio interview over the weekend, Lacson called on the Department of Trade and Industry, and local governments to use their authority in shutting China out of the SME industry. He said the government should prioritize the interests of local SMEs. Allowing Chinese SMEs to set up shops in the Philippines, Lacson argued, will deprive homegrown firms of investment and growth opportunities.
The article is originally published HERE on May 7, 2019.