The law liberalizing further the retail industry of the Philippines has yet to attract new nor significant investments, according to Paul Santos, chairman of the Philippine Retailers Association (PRA).
Santos told Retail Asia magazine the new investment hurdle set by the Retail Trade Liberalization Act (RTLA) “will invite not the big foreign retailers that the law presumably wanted to invite into the country.”
Santos said it has been the established foreign retailers present in the country that continue to pursue expansion.
In 2021, the Philippines passed the amendments to the RTLA which lowered the minimum investment for foreign retailers to enter the local market from $2.5 million to P25 million.
The minimal investment requirement, Santos said, makes the Philippines attractive to small and medium-scale foreign retailers which would compete with the country’s own small and medium players.
Santos said foreign retailers are not too concerned about capitalization requirements and that liberalization is not a guarantee that businesses would invest in the Philippine market.
Retailers, he added, would want to see how the retail economy and the consumers could support or buy the goods and services that they will be selling.
When asked how the law changed the retail landscape in the Philippines, Santos said: It has not yet actually happened.”
Citing industry observers, Santos said retail sales in 2023 will likely match if not surpass pre-pandemic but that inflation and political and economic uncertainties brought about by the war in Ukraine pose as a setback.
