Through Jenina P. Ibañez, Journalist
THE MEASURE which seeks to Lowering the minimum investment barrier for foreign retailers to 25 million pesos would likely lead to competition that could hurt many small local businesses, a group of retailers said.
Congress approved the report of the Bicameral Conference Committee on the Conflicting Provisions of Senate Bill 1840 and House Bill 59, which amends the Retail Liberalization Act (RTLA) 20 years old. It will be forwarded to Malacañang for signature by President Rodrigo R. Duterte.
In the close-up version, the minimum paid-up capital requirement for foreign retailers is now set at 25 million pesos or approximately $ 500,000, with a per store requirement of 10 million pesos. This amount is lower than the existing law’s minimum payment requirement for foreign retailers of 125 million pesos or $ 2.5 million.
“With the small minimum amounts, our MSME (micro-, small and medium-sized enterprises), will be the most affby foreign competition, foreigners already in the country and small informal retailers outside the country, ”said the vice-president of the Philippine Retailers Association, Roberto S. Claudio, on Wednesday.
There were 957,620 business enterprises operating in the country in 2020, of which 952,969 or 99.5% are MSMEs, according to the Philippine Statistics Authority (PSA) survey.
Foreign business groups have supported RTLA changes aimed at increasing foreign direct investment.
Foreign business groups had supported the House version setting a minimum paid-up capital of $ 200,000 or 10 million pesos, calling the Senate version that set the minimum 1 million pesos or 50 million pesos as an obstacle. new foreign direct investment needed in the context of the global economic slowdown.
Mr. Claudio said 25 million pesos, or the limit on small investments, will mean the economy will not gain substantial foreign investment, especially during the global health crisis.
“But a decision has been (taken) and we understand that the liberalization bills are ready to be signed by the president,” he said.
“While the Philippine Retailers Association has agreed to remove other limitations from the original bill, we continue to stress that the minimum investment of 25 million pesos is too low to benefit.Fit from any significant foreign investment and may just cause damage to our micro, small and medium enterprises! We hope that our business leaders and legislators will achieve the goals of liberalization laws.
Deputy leader of the parliamentary minority and representative of Marikina, Stella Luz A. Quimbo, who was on the committee of the bicameral conference, expressed optimism that the new version of RTLA will succeed in boosting foreign investment in trade Retail.
In a statement, she said the minimum requirement of 10 million pesos per store is “consistent with the objective of protecting MSMEs and opening medium and large enterprises to foreign competition.”
Quimbo also noted that the measure orders the Department of Commerce, the Securities and Exchange Commission and the National Economic and Development Authority to review the minimum required paid-up capital which has been set at 25 million pesos each. every three years.
“This is to ensure that the threshold respects the spirit of liberalization of the retail sector,” she said, noting that this will help create more jobs and lead to better quality and to more than oneffinexpensive products.
The modification of the RTLA is one of the priority economic measures advocated by the government, alongside the modifications of the Civil Service Law and the Foreign Investment Law. – with entries from Russell Louis C. Ku