The Philippine Retailers Association (PRA) is pushing to keep the minimum required investment per store for foreign retailers to allow small Filipino entrepreneurs to compete.
PRA vice chairman Roberto Claudio said in a text message the group is against the removal of the per store investment requirement of $830,000 for foreign retail firms under the proposed amendments to the Retail Trade Liberalization (RTL) Act.
“This provision will give a chance to Filipino entrepreneurs to exploit opportunities without unfair competition from foreigners,” he said.
Aside from removing the $830,000 minimum investment per store, the PRA also opposes the lowering of the $2.5 million minimum paid-up capital for foreign retailers.
A bill which seeks to reduce the minimum paid up capital to $200,000 has been approved by the House of Representatives on third and final reading.
Meanwhile, the measure pending at the Senate aims to lower the minimum paid-up capital to $300,000.
“What will prevent a foreign retailer from investing just $200,000 and open 30 sari-sari stores or 10 carinderias? What will stop foreigners (legal or with dummies) from engaging in sidewalk vending, owning public market stalls and opening eateries?” Claudio said.
While PRA has large retail firms as members, the group also represents the micro, small and medium enterprises, particularly the mom-and-pop stores in the countryside, public markets and eateries.
“These small Filipino retailers cannot withstand foreign competition,” he said.
To open up the retail sector, he said the PRA supports the proposed removal of the following provisions: the 60 percent equity limit to foreign retailers; public offering of shares of stocks; $200 million net worth of mother company; five-year track record of retailing business; reciprocity; and the pre-qualifying requirement process of the Department of Trade and Industry (DTI) before being allowed to conduct business.
“We feel the 60 percent equity provision will not matter anymore now that 100 percent foreign ownership is allowed,” he said.
Claudio said the public offering of shares is purely a business consideration, while having a $200 million net worth for the mother company would not be necessary if the minimum investment of $2.5 million is maintained.
“The high minimum investment ensures the credentials of the foreign retailer,” he said.
In terms of reciprocity, he said this is already widely practiced as there are Philippine retailers with presence overseas.
He also said the DTI’s pre-qualifying requirement process is no longer needed if the minimum investment is complied with.