EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
S E N A T E  
S. No. 
1 4
XP TIME:
BILLS 
INDEX
Introduced by Senator FRANKLIN M. DRILON
AN ACT
SETTING THE M IN IM U M  PAID-UP CAPITAL AND LOCALLY PRODUCED 
STOCK INVENTORY REQUIREMENTS FOR FOREIGN RETAIL BUSINESS 
ENTERPRISES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 8762, 
OTHERWISE KNOWN AS THE "RETAIL TRADE LIBERALIZATION ACT OF 
2000 "
EXPLANATORY NOTE
Retail Trade is the act, occupation or calling of habitually selling direct to the 
general public merchandise, commodities or goods for consumption.
Republic Act No. 8762, or the Retail Trade Liberalization Act of 2000, provides 
for the liberalization of the retail trade industry to encourage competitive retail trade 
sectors in the interest of empowering Filipino consumers. Particularly, Section 2 
thereof states that:
"It is the policy o f the State to promote consumer welfare in 
attracting promoting and welcoming productive investment that will 
bring down price for the Filipino consumer, create more jobs, promote 
tourism, assist small manufacturers, stimulate economic growth and 
enable Philippine goods and services to become globally competitive 
through the liberalization o f the retail trade sector."
However, over the years, the law's intention of inviting retail trade investors, 
creating jobs and making goods more competitive has not been realized. The 
Philippines is still lagging behind retail trade investments due to restrictive 
requirements which impede foreign investments in the country.
To truly liberalize the retail trade industry and push local players to be at par 
with our ASEAN neighbors, this measure seeks to further relax foreign restrictions by


removing investment categories and setting an across the board minimum paid up 
capital investment equivalent of US$ 200,000 in Philippine peso. To promote locally 
manufactured products, at least ten percent (10%) of the aggregate cost of stock of 
inventory of foreign retailers shall be made in the Philippines. These proposed 
amendments will no doubt result in greater variety of products, more choices of 
goods for consumers, inflow of new technology and employment of more Filipinos.
In view of the foregoing, the passage of this bill is sought.
Senator


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E  
S. No. 
1 4
TIME
iINDEX
BILLS
Introduced by Senator FRANKUN M. DRILON
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AN ACT
SETTING THE MINIMUM PAID-UP CAPITAL AND LOCALLY PRODUCED 
STOCK INVENTORY REQUIREMENTS FOR FOREIGN RETAIL BUSINESS 
ENTERPRISES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 8762, 
OTHERWISE KNOWN AS THE "RETAIL TRADE LIBERALIZATION ACT OF 
2000 "
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
Section 1. 
Section 5 of Republic Act No. 8762 is hereby amended to read as
follows;
"Sec. 5. Foreign Equity Participation.
Foreign-owned partnerships, associations and corporations 
formed and organized under the laws of the Philippines may, 
upon registration with the Securities and Exchange Commission 
(SEC) and the Department of Trade and Industry (DTI), or in case 
of foreign-owned single proprietorships, with the DTI, engage or 
invest in the retail trade business[, subject to the following 
categoriesf] WITH A MINIMUM PAID-UP CAPITAL OF THE 
EQUIVALENT IN PHILIPPINE PESO OF TWO HUNDRED 
THOUSAND US DOLLARS (US$200,000.00).
[Cotegory-A— Enterprises with paid up capital of the equivalent 
in Philippine Pesos of less than Two million five hundred thousand 
US dollars (US$2,500,000.00) shall bo reserved exclusively for 
Filipino -citizens and corporations wholly owned by Filipino


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[ Category B—Enterprises with-a -minimum poid-up capital of the 
equivolont in Philippine Pesos of Two million five hundred 
thousand— US dollars (US$2,500,000.00) but loss -then Seven 
million five hundred thousond US dollars (US$7,500,000.00) may 
be wholly [owned by foreigners except-for the first two (2) years 
after the offectivity of this Act wherein foreign participation shall 
be limited to not more-than-sixty percent (60%) of total equity.] 
[Category €—Enterprises with a poid up copital of the equivalent 
in Philippine Pesos of Seven million five hundred thousand US 
dollars (US$7,500,000.00) or more may be wholly owned by 
foreigners:—Provided, however, That -in no case shall—the 
investments for establishing a store in Categories B and C be 
less than-the equivalent in Philippine Pesos of—Ei§bt—hundred 
thirty— thousond US dollars (US$830,000.00).]
[Category—D---- Enterprises- speciolizing in high-end or luxury
products with-a-paid-up capital of the- equivolont in Philippine 
Pesos of Two hundred fifty thousand US-dollars (US$250,000.09) 
per store may be wholly owned by foreignorsT]
"The foreign investor shall be required to maintain in the 
Philippines the full amount of [the prescribed minimum] ITS 
PAID-UP 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
capital
operations 
of the 
inwardly 
remitted 
[ requirement] shall be monitored by the SEC."
"Failure to maintain the [fuH] amount of 
minimum] 
PAID-UP 
capital 
REQUIRED 
IN 
THE 
IMMEDIATELY 
PRECEDING 
PARAGRAPH, 
prior 
to 
notification of the SEC and the DTI, shall subject the foreign 
investor to penalties or restrictions on any future trading 
activities/business in the Philippines."


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"Foreign retail stores shall secure a certification from the Bangko
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Sentral ng Pilipinas (BSP) and the DTI, [which-wtti] TO verify or
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confirm THE inward remittance of [the minimum required]
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THEIR capital investment."
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Sec. 2. Sections 6 and 7 of Republic Act No. 8762 are hereby deleted and the
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succeeding sections renumbered accordingly.
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Sec. 3. Section 8 of Republic Act No. 8762 is hereby amended to read as
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follows:
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"Sec. [8] 6. [ Qualifications— o f Foreign— Rctaiicfsl USE OF
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FOREIGN RETAILERS OF HIGH-END GOODS. - [ No foreign
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retailer shall be allowed to engage in retail trade----- in-----the
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Philippines unless— oil the - following qualifications are mefe]
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"[(a) 
A— minimum— of Two— hundred— million—ys—dollars
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(US$200,000,000.00) not worth in its parent corporation for
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Categories— B— and— Or,— and— Fifty— million— US 
dollars
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(US$60,000,000.00) not worth in its parent corporation for
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Category D;]
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"[(b) Five (5) retailing branches or franchises in operation
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anywhere oround the world unless such retailer has at least one
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(1) store capitalized ot a minimum of Twenty five million US
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dollors (US$25,000,000.00)t]
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"[(e)—Five (5)-yoar track record in retailing; and]
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"[(d)] Only nationals from [,] or juridical entities formed or
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incorporated in countries which allow the entry of Filipino retailers
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shall be allowed to engage in retail trade in the Philippines.
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"The DTI is hereby authorized to pre-qualify all foreign retailers,
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subject to the provisions of this Act, before they are allowed to
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conduct business in the Philippines."
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"The DTI shall keep a record of qualified foreign retailers who
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may, upon compliance with law, establish retail stores in the
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Philippines." [ It shall ensure that the parent rctoil trading


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compony of the foreign investor complies with the qualifications
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on capitalization ond track record prescribed in thiG scctiorh]
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"The Inter-Agency Committee on Tariff and Related Matters of
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the National Economic AND Development Authority (NEDA) Board
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shall formulate and regularly update a list of foreign retailers of
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high-end or luxury goods and render an annual report on the
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same to Congress."
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Sec. 4. Section 9 of Republic Act No. 8762 is hereby amended to read as
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follows:
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"Sec. [9] 7. Promotion o f Locally Manufactured Products. - [l=eF
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ten (10) years after the cffcctivity of this Act, at] AT least [thirty]
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TEN percent [(30%)] (1 0% ) of the aggregate cost of the stock
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inventory of foreign retailers [falling under Cotcgorics B ond-C
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and ten percent (10%) for Category D] shall be made in the
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Philippines."
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Sec. 5. Separability Clause. - If any portion or provision of this Act is declared
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unconstitutional, the remainder of this Act or any provision not affected thereby shall
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remain in force and effect.
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Sec. 6. 
Repealing Clause. 
- Republic Act No. 8762, and all laws, decrees,
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orders, rules and regulations or other issuances or parts thereof inconsistent with the
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provisions of this Act are hereby repealed or modified accordingly.
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Sec. 7. 
Effectivity. 
- This Act shall take effect fifteen (15) days after its
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publication in the Official Gazette or in a newspaper of general circulation.
Approved,