ECCP lauds further easing of foreign limits in retail

MANILA, Philippines — The entry of  more foreign retailers will benefit the Philippine economy as it will create more jobs and boost the spending power of consumers, an official of a top foreign business group said.

In an interview, European Chamber of Commerce of the Philippines (ECCP) president Guenter Taus said the Philippines needs to ease its foreign ownership restrictions to lure more global firms into the country.

“It makes much more sense to bring those companies into the Philippines. It enables Filipinos to spend their money in the Philippines. Therefore you have employment, you have taxes that are being paid,” Taus said.

The government plans to bring down the minimum capitalization for foreign retailers to $200,000 from the current $2.5 million by next year.

Based on the Retail Trade Liberalization Act of 2000 or Republic Act 8762, enterprises with paid-up capital of less than $2.5 million shall be reserved exclusively for Filipino citizens and corporations wholly owned by Filipino citizens.

The ECCP official added there shouldn’t even be a paid-up capital at all, citing other countries where foreign investors who plan to set up their businesses would only need to register their company and start building their businesses from there.

“I think that market forces develop themselves as you go along. At the least it’s setting in the right direction and it would make it easy for smaller companies to come in,” Taus said.

Asked if the entrance of foreign players would threaten local retailers, Taus said competition would not only benefit the market, but the Filipino consumers as well.

“The truth of the matter, isn’t competition what we want? Especially for every ordinary Filipino, that’s what you want,” Taus said.

He added the entrance of foreign retailers would actually create more employment opportunities for Filipinos, as these firms would need to hire people to operate their businesses.

In addition, Filipino consumers would be spending more of their money in the country, rather than going abroad to buy from the foreign brands, said Taus.