EIGHTEENTH CONGRESS OF THE 
]
REPUBLIC OF THE PHILIPPINES 
]
F irst R e g u la r S ession 
j
SENATE
S.B. No. 921
Senate:
'19 
AUG 19 
P3 0 3
RECEIVED BY.
In tro d u ced  by SEN. WIN GATCHALIAN
AN ACT
AMENDING REPUBLIC ACT NO. 8762, OTHERWISE KNOWN AS THE 
RETAIL TRADE LIBERALIZATION ACT, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
In the year 2000, the Philippines passed Republic Act No. 8762, 
otherwise known as the Retail Trade Liberalization Law, to allow the entry of 
foreign investm ents in the retail sector to stim ulate economic growth, create 
more job opportunities, and provide Filipino consum ers with better choices 
and higher quality goods and services at lower prices.
Eighteen years into the passage of the law, the reforms m ade under RA 
No. 8762 have not resulted in substantial foreign investm ents in the retail 
trade sector. Based on the list of foreign retailers pre-qualified by the DTI- 
BOI, only 22 foreign retailer firms have invested in the country’s retail sector 
since 2000.1 While a robust retail trade industry could have been a vehicle for 
job creation, the opportunity for employm ent is lessened w ithout such 
investm ents.
There is a need to revisit the 
requirem ents of the Retail Trade 
Liberalization Law to truly liberalize and incentivize investm ents in the retail
1See http://www.boi.gov.ph/files/laws/List%20of%20Foreign%20Retailers%20Prequalified 
%20as%20of%20December%202016.pdf.


sector. Currently, the law requires a m inim um  paid-up capital of $2.5M for a 
100% foreign ownership of a retail establishm ent. These requirem ents, along 
with other barriers, have resulted in the Philippines lagging behind other 
Asian countries in term s of developing a regulatory regime favorable to foreign 
investm ent. In other jurisdictions, countries like Cambodia, Indonesia, and 
Singapore allow foreign direct invesm ents in the retail trade sector without 
setting m inim um  capital requirem ents and w ithout limits on foreign equity 
participation.
Considering th at m arket competition benefits the Filipinos, especially 
the poor, through job creation m ade possible by the entry, growth, and 
expansion of efficient firms, and through lower prices th at result from greater 
variety and higher quality of goods and services, this bill proposes to do away 
with these barriers to foreign investm ents by requiring lower m inim um  equity 
and capitalization requirem ents under the Retail Trade Liberalization Law to 
create a more favorable investm ent climate in the country.
This proposed bill is in keeping with the governm ent’s legislative agenda 
under PDP 2017-2022 to “align guidelines for foreign investm ents with the 
Foreign Investm ents Act and lower capital requirem ents for foreign 
enterprises and harm onize with those observed in Asian countries”2 towards 
increased local and foreign investm ents. Its immediate passage is earnestly 
sought.
2Philippine Development Plan 2017-2002 (October, 2016), Chapter 9, Expanding Economic 
Opportunities in Industry and Services through Trabaho at Negosyo, p. 134.


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
F irst R e g u la r S ession
1
SENATE
S.B. No. 921
#aiff
• If 
AUG 19 
P 3 « 3
R K E IV ID B V :
In tro d u ced  by SEN. WIN GATCHALIAN
AN ACT
AMENDING REPUBLIC ACT NO. 8762, OTHERWISE KNOWN AS THE 
RETAIL TRADE LIBERALIZATION ACT, AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assem bled:
1 
SECTION. 1. Section 5 of Republic Act No. 8762 is hereby am ended to
2 
read as follows:
3 
“SEC. 
5. Foreign 
Equity 
Participation. - 
Foreign-owned
4 
partnerships, associations and corporations formed and organized
5 
under the laws of the Philippines may, upon registration with the
6 
Securities and Exchange Commission (SEC) and the D epartm ent
7 
of Trade and Industry (DTI), or in case of foreign-owned single
8 
proprietorships, with the DTI, engage or invest in the retail trade
9 
business [, subject to the following categories:] WITH A MINIMUM
10 
PAID-UP CAPITAL OF THE EQUIVALENT IN PHILIPPINE PESO
11 
OF TWO HUNDRED THOUSAND US DOLLARS (U S$200,000.00).
12 
[Category A - E nterprises with paid-up capital of the
13 
equivalent in Philippine Pesos of less than Two million five hundred
14 
thousand US dollars (US$2,500,000) shall be reserved exclusively
15 
for Filipino citizens and corporations wholly owned by Filipino
16 
citizens.]


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[Category B - Enterprises with a m inim um  paid-up capital 
of the equivalent in Philippine Pesos of Two million five hundred 
thousand US dollars (US$2,500,000) but less than Seven million 
five hundred thousand US dollars (US$7,500,000) may be wholly 
owned by foreigners except for the first two (2) years after the 
effectivity of this Act wherein foreign participation shall be limited 
to not more than sixty percent (60%) of total equity.]
[Category C - E nterprises with a paid-up capital of the 
equivalent in Philippine Pesos of Seven million five hundred 
thousand US dollars (US$7,500,000) or more may be wholly owned 
by foreigners: Provided, however, That in no case shall the 
investm ents for establishing a store in Categories B and C be less 
than the equivalent in Philippine Pesos of Eight hundred thirty 
thousand US dollars (US$830,000).]
[Category D - Enterprises specializing in high-end or luxury 
products with a paid-up capital of the equivalent in Philippine 
Pesos of Two hundred fifty thousand US dollars (US$250,000) per 
store may be wholly owned by foreigners.]
The foreign investor shall be required to m aintain in the 
Philippines the full am ount of ITS [the prescribed minimum] 
capital, OR, IN CASE ANY PART OF THE CAPITAL IS SOLD TO 
A CITIZEN OF THE PHILIPPINES, OR TO A PARTNERSHIP, 
ASSOCIATION OR CORPORATION OWNED AND CONTROLLED 
BY CITIZENS OF THE PHILIPPINES, THE UNSOLD AMOUNT OF 
ITS CAPITAL, unless the foreign investor has notified the SEC and 
the DTI of its intention to repatriate its capital and cease 
operations in the Philippines. The actual use in Philippine 
operations 
of 
the 
inwardly 
rem itted 
[minimum] 
capital 
[requirement] shall be m onitored by the SEC.
Failure to m aintain the [full] am ount of [the prescribed 
minimum] 
capital 
REQUIRED 
IN 
THE 
IMMEDIATELY 
PRECEDING PARAGRAPH, prior to notification of the SEC and 
the DTI, shall subject the foreign investor to penalties or


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restrictions on any future trading activities/business in the 
Philippines.
Foreign retail stores shall secure a certification from the 
Bangko Sentral ng Pilipinas (BSP) and the DTI, which will verify or 
confirm inward rem ittance of ITS [the m inim um  required] capital 
investm ent.”
Sec. 2. Section 6 of Republic Act No. 8762 is hereby deleted.
Sec. 3. Section 7 of Republic Act No. 8762 is hereby deleted.
Sec. 4. Section 8 of Republic Act No. 8762 is hereby am ended to read 
as follows:
“SEC. 8. Qualifications of Foreign Retailers. -  [No foreign retailer 
shall be allowed to engage in retail trade in the Philippines unless all 
the following qualifications are met:
a. 
A 
m inim um  
of Two 
hundred 
million 
US 
dollars
(US$200,000,000) net worth in its parent corporation for Categories B 
and 
C, 
and 
Fifty 
million 
US 
dollars 
(US$50,000,000)
net worth in its parent corporation for Category D;
b. 
Five (5) retailing branches or franchises 
in operation
anywhere around the world unless such retailer has at least one (1) 
store capitalized at a m inim um  of Twenty-five million US dollars 
(US$25,000,000);
c. 
Five (5)-year track record in retailing; and
d. 
] Only nationals from, or juridical entities formed or
incorporated in countries which allow the entry of Filipino retailers 
shall be allowed to engage in retail trade in the Philippines.
The DTI is hereby authorized to pre-qualify all foreign retailers, 
subject to the provisions of this Act, before they are allowed to conduct 
business in the Philippines.
The DTI shall keep a record of qualified foreign retailers who may, 
upon compliance with law, establish retail stores in the Philippines. [It


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shall ensure th at the parent retail trading com pany of the foreign 
investor complies with the qualifications on capitalization and track 
record prescribed in this section.]
The Inter-Agency Committee on Tariff and Related M atters of the 
National Economic and Development Authority (NEDA) Board shall 
form ulate and regularly update a list of foreign retailers of high-end or 
luxury goods and render an annual report on the sam e to Congress.”
SEC. 5. R ep ealin g  C lause. -  Republic Act No. 8762, and all laws, 
decrees, executive orders, proclam ations, rules and regulations, and 
issuances, or parts thereof which are inconsistent with the provisions of this 
Act, are hereby repealed, am ended or modified accordingly.
SEC. 6. S e p a ra b ility  C lause. -  If any provision of this Act is held 
invalid or unconstitutional, the other provisions not affected thereby shall 
rem ain in full force and effect.
SEC. 7. E ffectivity. -  This Act shall take effect fifteen (15) days after 
its publication in the Official Gazette or in at least two (2) new spapers of 
general circulation in the Philippines.
Approved,