By Business World
President Rodrigo R. Duterte has signed a law that significantly lowers the minimum investment hurdle for foreign retailers, which the government hopes will attract more foreign direct investments into the Philippines.
Republic Act (RA) No. 11595 reduced the minimum paid-up capital for foreign retailers to P25 million from the previous $2.5 million (around P125 million) under the 20-year-old Retail Trade Liberalization Act of 2000 (RA 8762).
Mr. Duterte signed the law on Dec. 10, 2021 but a copy of the bill was released only on Thursday.
Under the law, the foreign retailer’s country of origin must not prohibit the entry of Filipino retail enterprises.
Foreign retailers that have more than one physical store should also have a minimum investment per store of at least P10 million.
Sought for comment, Philippine Retailers Association (PRA) Vice Chairman Roberto S. Claudio said in an e-mail interview that micro, small, and medium enterprises (MSMEs) involved in the retail sector will be the most affected by the law since they will now have to compete with foreign retailers.
“The rest of the (country’s) retail sector have prepared and adjusted to having foreign retailers since the implementation of RA 8762 in 2000. We already have allowed foreign retailers since 2000… We will offer to assist in the drafting of the implementing rules and regulations of RA 11595 to be able to come up with a clear implementation of this amended law,” Mr. Claudio said.
Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon said in a mobile phone message that the P25-million minimum paid-up capital is “more realistic” compared with the original proposal of just P10 million.
Meanwhile, British Chamber of Commerce Philippines Executive Director Chris Nelson said in a mobile phone interview that the group plans to highlight this development to its network and provide UK-based firms with business opportunities in the Philippines.
“We are very happy to see that it’s been signed into law. We think it will lead to increased investments and increased foreign direct investments,” Mr. Nelson said.
Asian Institute of Management economist John Paolo R. Rivera said the new law will benefit consumers through lower prices and more products.
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