Philippine Star | Louella Desiderio | May 24, 2021 | 12:00 AM
MANILA, Philippines — The country’s group of retailers see the bill seeking to ease requirements for the entry of foreign retailers through lower paid-up capital approved by the Senate as a win-win for providing protection for local micro, small and medium enterprises (MSMEs).
Foreign business groups, however, want to see the final version of the bill to be signed to get more foreign retail investments in the country to help in economic recovery.
Philippine Retailers Association president Rosemarie Ong said in a text message the group is grateful for the Senate’s move to consider the plea of the retail industry to protect the interest of the MSMEs in its approval of Senate Bill 1840 which aims to amend the Retail Trade Liberalization Act of 2000.
Approved on third and final reading by the Senate last Wednesday, the bill seeks to reduce the minimum required paid-up capital for foreign retail investors to P50 million or about $1 million from the current $2.5 million.
Initially, the bill proposed to bring down the minimum paid-up capital to $300,000.
To protect MSMEs, the approved bill requires foreign retailers intending to have more than one store to invest at least P25 million for every shop to be built.
At present, foreign retailers are required to invest $830,000 or around P40 million per store.
“This is a win-win solution without sacrificing the plight of the micro, small and medium businesses,” Ong said, noting MSMEs account for over 90 percent of the country’s total enterprises.
“This is a milestone and we thank the Senate for recognizing the need to attract the right sort of foreign investments in the retail sector, the kind that will significantly invest in it,” she added.
For his part, British Chamber of Commerce Philippines executive director Chris Nelson said in a telephone interview that while the group is pleased the bill has made progress in the Senate, it wants the final version to bring in a higher amount of foreign direct investments (FDIs) in the country’s retail trade sector.
The Senate’s version would need to be reconciled with the House of Representatives’ counterpart measure approved on third and final reading in March last year before the bill can be transmitted to President Duterte for approval into law.
Under the House of Representatives’ version, the aim is to trim the minimum paid-up capital to $200,000 and remove the per store investment requirement for foreign retail firms.
American Chamber of Commerce of the Philippines Inc. senior advisor John Forbes said in a text message, the group strongly supports the investment requirement under the House of the Representatives’ version as this is seen to entice foreign retailers in the country.
He emphasized that foreign retail investment is very welcome in most countries in Southeast Asia.
In Vietnam, he said foreign retail investments are helping support four million Korean visitors and 5,000 Korean firms there.
“President Duterte prioritized this bill as among pandemic recovery measures. Thus, we do not understand why the Senate is setting an amount that will discourage new FDI in retail and fail to create jobs,” he said.
Nelson said the more the country eases restrictions, the greater the opportunity to attract investments.
“We obviously hope now that the two versions can be reconciled and come up with a final version and that we get further changes. The overarching aim of the British chamber along with other chambers is to have FDI which will be a boost to the Philippine economy,” he said.
