THE Senate ratified on Monday a bicameral conference committee report endorsing amendments to the Retail Trade Liberalization Act, seeking to lower the capitalization requirement for foreign retailers from $2.5 million to $500,000 or from P125 million to P25 million.
Passing the remedial legislation for the 1991 Act, said Senate Majority Leader Juan Miguel Zubiri, was intended to attract more foreign direct investments into the country, “thereby fostering competition, lowering market prices, and creating more local jobs.”
As one of its principal authors, Zubiri had batted for keeping the capitalization level at P25 million, against the House version’s much lower proposal of P10 million. “We did this to protect our micro, small, and medium enterprises,” Zubiri explained.
“Because while we gladly welcome foreign investors,” he added, “we must always prioritize the interests of our local business sector, particularly our MSMEs who make up 99 percent of our corporate taxpayers. Lalo na ngayong patuloy pa rin and pandemya at marami pa sa kanila ang hindi nakaka-recover mula dito [Especially now that the pandemic still rages and many of them have not recovered].”
Zubiri affirmed the ratified bicameral conference report also mandates a per-store amount requirement of P10 million for foreign retailers with more than one physical store. This is seen to prevent foreign retailers from breaking up their investment to create smaller shops that will compete with MSMEs.
“We really had to find a balance between attracting foreign investors and also protecting our local sectors,” Zubiri added. “And overall I think we have hit a good compromise. I think this is a landmark bill that will do wonders for our economy, particularly as we recover from the pandemic. I am especially hopeful about all the employment opportunities that this will open up for our people,” the Majority Leader added.