Duterte certification for bill relaxing foreign retailer rules eyed

MANILA, Philippines — A presidential certification for bills that would further open up the economy to foreign investments will be sought by officials to speed up their passage, especially for the proposed legislation lowering the minimum investment that foreign retail investors are required to meet.

The plan, bared on Friday by National Economic and Development Authority (NEDA) Assitant Secretary Carlos Bernardo Abad Santos in an online forum organized by the American Chamber of Commerce (AmCham) on Friday, is in response to foreign business groups' clamor to ease restrictions on foreign investments.

Specifically, AmCham renewed their push for the relaxation of the Retail Trade Liberalization Act (RTLA), which allows foreign retailers to set up shop in the country only if they have a minimum paid-up capital investment of $2.5 million.  

There are two options to have the bills certified as urgent by President Rodrigo Duterte, Abad Santos said. Economic officials can either directly ask Duterte to certify the bills or  just include them in the list of priority measures that the Legislative-Executive Development Advisory Council (LEDAC) will endorse to the president for his approval and certification, he explained.

"Basically, LEDAC will deliberate on this and then make a shorter list and combine the priority list of LEDAC with the SONA list of the president," Abad Santos said. "So two things: we could have these bills certified again as urgent or make it part of the process of LEDAC."

The certification from the Palace is crucial considering how busy Congress is with budget hearings and other deliberations. Should Duterte tell lawmakers that a measure is needed urgently, they can proceed with the third reading of the bill once approved on second reading without having to wait for at least three days in between.

As it is, the House of Representatives has already approved amendments to the RTLA, while counterpart bills are pending before the Senate. From the current $2.5 million, the House version reduced the required minimum paid-up capital for foreign retail firms to $200,000 while the Senate version slashed it to $300,000.

Other groups, including the Philippine Retailers Association (PRA), have opposed the bill, arguing that easing the RTLA will open local micro, small and medium-sized enterprises (MSMEs) to "unfair" foreign competition. But Rep. Stella Luz Quimbo (Marikina City - 2nd district) disagreed, saying competition would benefit consumers.

"Under the current law, in order for a large foreign entity to do business in the country, it must partner with a local firm which is likely already a participant in the market," Quimbo said in the same forum on Friday.

"So when this bill becomes a law, foreign entities can participate without a local partner, thus challenging existing local players," she added.