President Rodrigo Duterte has signed into law a measure that would further open up the Philippine retail sector to more foreign retail businesses by lowering their required paid-up capital.
Republic Act (RA) 11595, which amends RA 8762, also known as the Retail Liberalization Act of 2000, was signed by Duterte on December 10, 2021, but was only released to the media on Thursday.
Duterte earlier certified the bill as urgent as part of efforts to encourage the entry of more investors and further boost economic recovery amid the prevailing coronavirus disease 2019 (Covid-19) pandemic.
Under the law, “a foreign retailer shall have a minimum paid-up capital of PHP25 million.”
The current law sets the required capital at USD2.5 million or PHP119.67 million.
The law also mandates the entry of foreign retailers coming from countries that do not prohibit the entry of Filipino retailers.
In the case of foreign retailers engaged in retail trade through more than one physical store, the minimum investment per store must be at least PHP10 million “provided that this requirement shall not apply to foreign investors and foreign retailers who are legitimately engaged in retail trade and were not required to comply with the minimum investment per store at the time of the effectivity of this Act.”
The Department of Trade and Industry, Securities and Exchange Commission, and the National Economic and Development Authority shall review the required minimum paid-up capital every three years and their recommendations should be submitted to Congress.
Foreign retailers are encouraged to have a stock inventory of products that are made in the Philippines.
As for penalties, violators may face imprisonment of not less than four to six years and a fine of not less than PHP1 million but not more than PHP5 million.
In the case of partnerships, associations, or corporations, the penalty shall be imposed upon its partners, president, directors, general manager, and other officers responsible for the violation.
If the offender is not a citizen of the Philippines, he or she shall be deported immediately after the service of the sentence.
If the Filipino offender is a public officer or employee, he or she shall, in addition to the penalty prescribed, suffer dismissal and permanent disqualification from public office.
RA 11595 is a consolidation of House of Representatives Bill 59 and Senate Bill 1840 passed by the House and the Senate on September 21 and 20 last year, respectively. (PNA)