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Business

Easing of retail trade to recoup pandemic losses

Elijah Felice Rosales - The Philippine Star

MANILA, Philippines — The passage of a law easing the entry of foreign retailers will not only bring in fresh capital, but also create livelihood opportunities that the economy needs to bounce back from the pandemic, according to the Department of Finance.

DOF Secretary Carlos Dominguez III yesterday said measures opening up the economy to foreign participation would bolster the country’s chances of recovering the losses it sustained at the height of the lockdowns.

Dominguez said the signing of Republic Act (RA) 11595 encourages foreign retailers to consider the Philippines as an investment location for their expansion branches.

RA 11595, approved by President Duterte in December, amended RA 8762 or the Retail Trade Liberalization Act of 2000. RA 11595 trims the required capital for foreign retailers to P25 million from RA 8762’s $2.5 million (at least P125 million) to entice global brands to locate their shops here.

The law also simplifies the qualification requirements for foreign retailers by removing conditions on net worth, number of retail branches, and track record.

With operational bottlenecks lifted, the government hopes international firms will locate here to the benefit of an economy pressured to expand by seven to nine percent this year.

Dominguez said the changes to the Retail Trade Law allow small-scale enterprises to compete for buyers, preventing corporations from dominating the market just because they can afford to pay the minimum capital.

“This will enhance competition among enterprises, which will be beneficial to our consumers by providing more choices at lower and more competitive prices,” Dominguez said.

The finance chief added that RA 11595 benefits local makers by encouraging, but not requiring, foreign retailers to maintain an inventory of products made in the Philippines.

“This will help protect our country’s small local manufacturers and encourage retailers to provide opportunities for locally-made products, despite being foreign-owned. We hope this will also aid in generating much needed employment and income for Filipinos,” Dominguez said.

Moving forward, Dominguez said two measures should be approved as well to complement the investment and job generation impact of RA 11595. These reforms are: amendments to the 86-year old Public Service Act (PSA) and the Foreign Investment Act (FIA) of 1991.

In December the Senate and House of Representatives ratified a bicameral committee report on revisions to the FIA and relayed it to the Office of the President for its review.

On the other hand, the Senate and House will convene in a bicameral conference committee to deliberate on their conflicting provisions in the amendments to the PSA.

DEPARTMENT OF FINANCE

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