THE Senate unanimously passed Wednesday the bill updating the Retail Trade Liberalization Act of 2000, lowering the required paid-up capital for foreign retail enterprises.
With 20 affirmative votes, zero objection and no abstention, the Senate approved on second and third reading in one sitting Senate Bill 1840 amending the existing Retail Trade Liberalization Act of 2000 (RA 8762).
The Senate approval paves the way for the bill’s speedy passage as the House has already passed its version, inching closer for submission to Malacañang for signing into law by President Duterte. The second and third reading approvals were made possible by Duterte’s earlier move to certify the bill as urgent.
Senate Bill 1840 lowers the existing $2.5-million paid-up capital investment required for foreigners putting up retail business, such as convenience stores, down to $1 million or P50 million.
In the original proposal, the amount was pegged down to $300,000 but Senate President Pro Tempore Ralph Recto moved to amend the amount, saying this was too low and would make it easy for large foreign retailers to beat the local businessmen. As the bill on Retail Trade Liberalization Law was certified by Malacañang as an urgent measure it was included in the list of priority legislation adopted by the Senate in its priority agenda.
Hontiveros warning
Earlier, Sen. Risa Hontiveros warned against removing restrictions to widen foreign ownership of domestic retail trade, saying it is “not the wisest option” amid an economic crisis.
She aired apprehensions that the proposed amendments to the Retail Trade Liberalization Law, which senators continued deliberating on, “would only put at a disadvantage” Filipino owners of mom-and-pop shops, sari-sari stores, carinderias, and even public market stalls, effectively making them “second class citizens.”
“They [Filipino traders] will become second-class citizens in our own business sector if the Retail Trade Law is amended,” the lawmaker lamented. Hontiveros added: “Right now, this not our wisest option. Instead of our businessmen and sellers being able to recover, they will instead be hit with this.”
She cited key provisions of Senate Bill 1840 proposing to “remove all capital restrictions to foreign ownership of retail trade” by amending the Retail Trade Liberalization Act (RTLA) of 2000.
Moreover, the senator added that while the proposed RTLA of 2000 still imposes a $2.5-million minimum capital requirement on 100 percent foreign ownership of retail businesses in the country, a smaller requirement ($250,000) is imposed on 100-percent foreign ownership for retailers of luxury goods.
Stressing that she is not against foreign investments, Hontiveros noted, however, that the Philippine Retailers Association aired concerns that once the minimum capital requirement for foreign investors is lowered, “it will defeat the local MSMEs,” adding that “these amendments will not help Filipinos.”
Hontiveros added: “More than ever, the wholesale and retail sector should feel the government’s support now. That’s why we continue to call for more ayuda and support for them, like wage subsidy and soft loans.”
The senator stressed that “we must listen to and support our MSMEs, who are actually keeping the country afloat despite being one of the hardest hit by the economic downturn.”