Several foreign business groups lauded the ratification of the bicameral report for the bill liberalizing the retail trade industry of the country.
In a news statement issued on Monday, the Joint Foreign Chambers said that the bill amending the Retail Trade Liberalization (RTL) Act of 2000 could bring in more foreign direct investments (FDI) moving forward.
“The 18th Congress has recognized the potential contribution to Philippine economic growth and job creation of allowing more foreign investment in the dynamic retail trade sector, both as sole owners above $500,000 and potentially as minority owners with Filipino partners below that amount,” they said.
The signatories include the American Chamber of Commerce of the Philippines, Australian-New Zealand Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines and Philippine Association of Multinational Companies Regional Headquarters Inc.
The bill seeks to lower the capitalization requirement for foreign retailers to $500,000 (P25 million) from $2.5 million (P125 million) to attract more companies to set up shop locally. This revision is higher compared to the House proposal of lowering the threshold to P10 million.
Senate Majority Leader Juan Miguel Zubiri, one of the bill’s principal authors, said that higher capitalization requirement—albeit lower than the original version—will protect the local micro, small and medium enterprises.
To recall, Philippine Chamber of Commerce and Industry Chairman Alegria Limjoco, who is also the vice chairman of the Philippine Franchise Association and Philippine Retailers Association, expressed concerns that lowering capital requirement for foreign firms will hurt the local industry.
President Duterte previously tagged the RTL bill as urgent, along with the bills amending Public Service Act (PSA) and Foreign Investment Act (FIA).
“We also thank the Executive branch for its strong support of amendments to the [FIA] and, very importantly, the [PSA]. Together enactment of these reform laws will see higher FDI inflows that will assist post-pandemic economic recovery,” the groups said.
The FIA amendments seek to cut the minimum employment requirement to 15 from 50 direct local hires for small and medium local firms established by foreign firms with at least $100,000 in paid-in capital.
The PSA bill, meanwhile, identifies public utilities subject to 40 percent foreign ownership restrictions, including distribution of electricity; transmission of electricity; and water pipeline distribution systems and sewerage pipeline systems.
As a result, other sectors like transportation and telecommunications may be allowed to be wholly owned by foreign investors. This is why several foreign and local business groups recently urged the government to not tag the mentioned industries as public utilities to allow further liberalization.
By doing so, the business groups said the country would be able to build more infrastructures, improve services and competition and decrease costs for the consumers.
Source: https://businessmirror.com.ph/2021/09/27/jfc-lauds-rtl-ratification/