Some P15 billion investments in retail are pending at the Department of Trade and Industry (DTI) and could multiply “a couple of times over” if equity thresholds are lowered.
This was announced yesterday by Sen Aquilino Pimentel III at the Joint Advocacy Webinar: Unlocking the Economy to Create Jobs and Investments hosted by the European Chamber of Commerce of the Philippines yesterday.
“We are not really targeting any amount but we foresee that if we lessen the threshold amount, plus the fact that below the threshold amount foreign equity will now be allowed…there will be an increase in the level of foreign direct investments in retail trade, “ Pimentel said who sponsored Senate Bill (SB) 1840 or An Act Amending the Retail Trade Liberalization Act (RTLA) of 2000.
The measure was approved on May, 19 2021 on third reading by the Senate and is pending in the bicameral conference committee.
Pimentel said the pending applications have been filed under the “more stringent, existing law. “
“The proposed amendments revisit the requirements of the RTLA to truly liberalize and incentivize investments in the retail sector, to allow the entry of more foreign investments to stimulate economic growth and to create more job opportunities and to provide Filipino consumers with better choices, higher quality goods and services, hopefully lower prices,” he said.
Pimentel said the Senate version lowers the capitalization requirement from the present $2.5 million to P50 million or $1 million.
The first store requirement in the existing law of $830,000 was also changed to P25 million
Pimentel said to further liberalize the law , Senate removed most of the pre-qualification and other requirements in the current law but retained the reciprocity provision, “with a very liberal interpretation that for as long as the country of the nationale wants to engage in retail trade here in the Philippines does not prohibit a Filipino from engaging in retail trade in his own country, then that is reciprocity. “
SB 1840 also removed retail exclusivity to Filipinos
“The rule now is that below the threshold amount, retail trade is reserved to 100 percent Filipino equity , zero percent foreign equity. But now, the rule will be below the threshold amount.. with foreign equity, up to 40 percent to be allowed to engage in retail trade in the Philippines,” Pimentel added
The amendment provided for a review of the minimum paid up capital, every three years Pimentel said Congress is on track of having the bill passed although both Houses were not able to reconcile their versions at the first bicameral conference committee last May 31.
Pimentel said he has reached out to the House panel to continue meetings.
The House has pegged its threshold at is $200,000 versus Senate’s $1 million.
