Solon seeks to change trade law

ILOILO CITY, Philippines — Representative Ferjenel Biron of the 4th Congressional District of Iloilo is moving for the amendment of the retail trade law citing various restrictions on foreign retail investors who plan to do business in the country.

Biron, the chairman of the House Committee on Trade and Industry, said he is working with Rep. Arthur Yap of the 3rd district of Bohol for the amendment of Republic Act No. 8762 or the Retail Trade Liberalization Act of 2000.

"Right now, foreign retailers have to overcome the threshold for investment for retail which is $2.5 million," he added.

A few years back, a foreign business group cited that RA 8762 cut off a smooth investment flow. Thus, compared to the country's regional neighbors, the Philippines is deemed to have a competitive snag.

When the law was enacted almost two decades ago, its goal was to encourage and promote bringing in productive investments. By attracting more investment, it was seen to result to more jobs for Filipinos, decrease consumer prices, and the like.

However, foreign investors have seen that some requirement to do retail trade in the country as restrictive. Under Section 5 (A) of RA 8762 "enterprises with paid-up capital of the equivalent in Philippine Peso of less than US$2,500,000 shall be reserved exclusively for Filipino citizens and corporations wholly owned by Filipino citizens."

For some investors, a paid-up capital of at least 2.5 million to $7.5 million is too high for them to wholly own a retail store.

Further, "enterprises specializing in high-end or luxury products with a paid-up capital of the equivalent in Philippine Pesos US$250,000 per store may be wholly owned by foreigners."

Right now, Biron said they are working on around $200,00 to $300,000 so as not also to jeopardize the local retailers.

"This will open the economy and bring in more medium size retailers to improve our retail economy here in the Philippines," he added.

Biron made the announcement following the visit of Ambassador Han Dong-man of the Republic of Korea to Iloilo on Thursday, June 21.

"He visited my office in Congress and appealed for the passage of the amendment of the Retail Liberalization Law," Biron said.

In Iloilo, "there are also many Koreans who would like here to do business but not under their names because the cap is $2.5 million," he added.

Biron said they want to legitimize their operations by solely owning the retail shops that they are operating.

"They are operating but they are not the owners because they have to have a dummy," he said. Sometimes, they ended up being fooled by unscrupulous businessmen.

"But with the propose amendment, it might open the retail economy for medium size retailers," Biron said.

Ambassador's Visit

Han said he visited Iloilo to extend cooperation.

"Iloilo province has many potentials to develop not only economically but also culturally," he added.

Aside from also bringing in Korean culture, he also hoped to bring in investments to Iloilo, Aside from encouraging Korean tourists, Han said that Iloilo has the reputation of a very good educational system and being a very safe city.

The Korean government has also made investment in Iloilo like the funding of the Jalaur Dam. Han also mentioned the development of the Dumangas Port and the potential of exporting mangoes from the Philippines to Korea.