By Charmaine A. Tadalan
THE BILL seeking to reduce the required minimum paid-up capital for foreign entrants to the country’s retail sector is likely to secure third and final-reading approval at House of Representatives when legislative sessions resume after the May 13 mid-term elections, a senior lawmaker said on Monday.
“The substitute bill was approved on second reading on Feb. 8 without interpellation or objection from any solon. Hence, I am pretty confident that this bill will pass on third reading when session resumes,” Deputy Speaker Arthur C. Yap of Bohol’s 3rd district said via text.
The 17th Congress, now on a Feb.9-May 19 break, will have only May 20-June 7 left to work on proposed laws.
House Bill No. 9057, which has so far secured second-reading approval, will amend Republic Act No. 8762, or the Retail Trade Liberalization Act, by setting the minimum paid up capital to $200,000 and scrap the minimum investment requirement of $830,000 per store. Currently, the law provides a $2.5 million capital requirement for entrants that are wholly owned by foreign entities.
“We must strike down restrictive laws which impede foreign investments. The Philippines allowed foreigners to engage in retail trade in the year 2000 and yet, the we are lagging behind retail trade investments in ASEAN consistently in the last 18 years,” Mr. Yap explained.
“Clearly, the law’s intention of inviting retail trade investors, creating jobs and making goods more price and quality competitive has not been realized.”
The measure will also remove the $250,000 paid-up capital per store for enterprises engaged in high-end or luxury products.
It will also eliminate requirements such as minimum net worth of $200 million for enterprises with paid up capital of $2.5-7.5 million and $50 million for enterprises engaged in high-end or luxury products.
The present law also requires a five-year track record in retailing and five retailing branches or franchises in operation anywhere in the world or at least one store capitalized at a minimum of $25 million.
The bill will also reduce the proportion of locally manufactured products required to be carried by foreign retailers to 10% of the aggregate cost of their stock inventory from the 30% currently.
The bill’s fate in the Senate remains uncertain, however.
Senator Aquilino L. Pimentel III, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship, merely committed to continue deliberation of the chamber’s counterpart measure, Senate Bill No. 1639, to consider concerns of local businesses.
“There’s opposition from our small businesses,” Mr. Pimentel said in a mobile phone message on Monday when asked for updates on the measure.
“I will hear it again. Cause I heard the bill in passing only before.”
Majority Leader Senator Juan Miguel F. Zubiri, for his part, noted in a separate text message: “We only have nine session days left when we get back.”
“It’s going to be tough as the schedule is tight. The debates have not started and that could take a week at the very least.”
Sought for comment, British Chamber of the Commerce Philippines Chairman Chris Nelson said in a telephone interview: “We support the Retail Trade Liberalization Act, which is authored by Arthur Yap.”
“We think this will assist in the development of the trade and, obviously, in terms of competition. Like the other chambers, we support it,” Mr. Nelson said.
“Now we are cognizant of the fact that it’s now election time and when they come back, there’s probably three weeks, then you get a new Congress. Obviously, it’s hard to predict the timing, but if the Retail Trade Liberalization Act was not able to go through this time, then we would still be supporting it in the next Congress.”
American Chamber of Commerce of the Philippines Senior Adviser John D. Forbes, meanwhile, is still “hopeful” the bill will hurdle the 17th Congress.
“We are still hopeful that, despite the crowded schedule of the Senate, it will be able to complete this in the 17th Congress,” Mr. Forbes said by phone.