The Philippines expects a slew of investments in retail following the liberalization of the sector.
Bien Ganapin, director at the National Economic and Development Authority (NEDA) in a forum hosted by the British Chamber of Commerce of the Philippines on Tuesday said the Board of Investments (BOI) has received leads from companies interested to come in and were just waiting for for the law to be finalized.
These include companies from Japan interested in convenience store expansion and specialty restaurants;
Indonesia in retail pharmaceuticals, China, food service and motor vehicle retail operations.
South Korea for food franchises; from the United Arab Emirates for medical equipment and food retail and for Denmark for footwear.
Republic Act (RA) No. 11595, which amended the Retail Trade Liberalization Act (RTLA), was signed into law by the President in December
Under RA 11595, the minimum paid-up capital requirement for foreign corporations planning to do business here was lowered from P125 million to P25 million.
The qualification requirements were also simplified by removing required net worth, number of retailing branches, and retailing track record conditions.
The Philippine Competition Commission (PCC) meanwhile reported some manufacturers are looking to use compliance with their suggested retail price (SRP) as basis to supply or deny access to resellers which may restrict competition among retailers constituting a possible violation of the Philippine Competition Act.
“Dictating terms in the contract of sale that when you don’t follow the SRP, you will not be supplied with goods, is a red flag for a possible anti-competitive behavior. Retailers should be able to decide their own prices without fear of having their supply refused as it will impair their ability to compete in the market,” said Jasmine Maquiling of the PCC Competition Enforcement Office at a webinar with the Philippine Retailers Association recently.
The PCC promotes industry efficiency by allowing retailers to price goods according to their willingness to capture consumer share instead of issuing SRPs.
“There’s a concept known as resale price maintenance. Once you fix a certain price for a customer, you’re disturbing the equilibrium of prices. You’re stopping a customer who is willing to pay more, and you’re stopping the seller who wants to offer it for less,” said Honorio Buccat Jr. of the PCC Mergers and Acquisitions Office .
Buccat said retailers can also compete in non-price dimensions such as in after-sales service, warranties, and other marketing strategies.
