EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE, 1 «
S.B. No.
ol ll)f fe'. crrwrp
•19 OCT-8 P7 21
R K -. ' U B '
Introduced by SENATOR IMEE R. MARCOS
AN ACT AMENDING REPUBLIC ACT NO. 8762, OTHERWISE KNOWN AS THE 
RETAIL TRADE LIBERALIZATION ACT, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Article II, Section 20 of the 1987 Constitution provides that, "the State 
recognizes the indispensable role o f the private sector, 
encourages private 
enterprise, and provides incentives to needed investments."
In 2000, Republic Act (R.A.) No. 8762 or the "Retail Trade Liberalization Act" 
was enacted to promote foreign investments in the retail trade sector. Before the 
passage of R.A. No. 8762, there were no foreign direct investments in the retail 
trade sector. The share of retail in the Gross Domestic Product (GDP), in 1999, was 
only 11.42%, with a Gross Value Added (GVA) of only P 391.5 billion.
The passage of R.A. No. 8762 resulted in foreign direct investments flowing 
into the retail trade sector. The foreign investment in the sector, however, remained 
volatile and minimal, with investments reaching only USD 73.29 million in 2018, 
down from an all-time record of USD 208.19 million in 2016. In comparison, 
Thailand received USD 3.2 billion, Malaysia received USD 2.5 billion, Indonesia 
received USD 2 billion and Vietnam received USD 2 billion in 2016.
Nineteen (19) years since the passage of the law, there were only 43 
prequalified foreign retailers in the country. As such, growth in the retail sector 
remains sluggish, with a GVA of only P 1.22 trillion, or a growth rate of 6.2%.
The principal restrictions to foreign investment in the retail trade sector of the 
country can be found in the minimum paid-up capital requirement and the pre­
screening of qualified foreign retailers. The minimum paid-up capital of USD 2.5 
million is widely seen as too high given the fact that there are initiatives to amend 
the Foreign Investments Act to allow investments with a minimum paid-up capital of
1


USD 100,000. 
Thus, there is a need to lower the minimum paid-up capital 
requirement to harmonize it closer to the Foreign Investments Act while protecting 
the micro and small entrepreneurs of the country.
The qualifications of the foreign 
retailers 
listed 
in the 
Retail Trade 
Liberalization Act also fails to capture the change in dynamics in the international 
retailing industry. The requirement of 5 retailing branches anywhere in the world, 
five years of retailing experience, and reciprocity in the retail trade sector does not 
capture the situation on the emergence of online retailing financed by venture 
capitalists around the world. Therefore, there is a need to relax the requirements for 
foreign retailers in order to facilitate their monitoring and regulation.
Given the abovementioned circumstances, the immediate passage of this bill 
is necessary.
E R. MARCOS


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
S.B. No.
SENATE
1113
of lltf » i cr'.'tiu'}>
*19 OCT-8 P7 2I
RECct'/; OBY;
Introduced by SENATOR IMEE R. MARCOS
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 o f Representatives o f the Philippines in 
Congress assembled.
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Section 1. Section 5 of Republic Act No. 8762 is hereby amended to read as follows:
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"SEC. 
5. 
Foreign 
Equity 
Participation. 
- 
Foreign-owned 
partnerships,
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associations and corporations formed and organized under the laws of the
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Philippines 
may, 
upon 
registration 
with 
the Securities and 
Exchange
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Commission (SEC) and the Department of Trade and Industry (DTI), or in case
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of foreign-owned single proprietorships, with the DTI, engage or invest in the
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retail trade business [,subject to the following categories:] WITH A
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MINIMUM PAID-UP CAPITAL OF THE EQUIVALENT IN PHILIPPINE
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PESO OF ONE HUNDRED THOUSAND US DOLLARS (US$100,000.00).
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PROVIDED THAT, THE FOREIGN ENTITY SHALL COMPLY WITH ANY
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OF THE FOLLOWING:
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(1) 
HIRE FILIPINO EMPLOYEES COMPRISING AT LEAST FIFTY PERCENT
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(5 0 % ) OF THEIR WORKFORCE OR AT LEAST FIFTEEN (15) FILIPINO
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EMPLOYEES, WHICHEVER IS HIGHER;


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(2) 
UTILIZE 
ADVANCE 
MACHINE 
INTELIGENCE 
OR 
AUTOMATED 
WORKFORCE, AS DETERMINED BY THE DEPARTMENT OF SCIENCE 
AND TECHNOLOGY (DOST); OR
(3) 
TRANSACT AT LEAST FIFTY PERCENT (5 0 % ) OF THEIR RETAIL 
BUSINESS ONLINE.
[Category 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) shall 
be reserved exclusively for Filipino citizens and 
corporations wholly owned by Filipino citizens.] [Category B - Enterprises with 
a minimum 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 w 
herein foreign participation shall be limited to not more than sixty percent 
(60% ) of total equity.] [Category C - Enterprises 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 investments 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 maintain in the Philippines the full amount 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 remitted 
[m inim um ] capital [requirem ent] shall be monitored by the SEC. Failure to


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maintain the [fu ll] amount 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 
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 remittance of ITS [the 
minimum required] capital investment."
Section 2. Sections 6 and 7 of Republic Act No. 8762 are hereby deleted and the
succeeding sections renumbered accordingly.
Section 3. Section 8 of Republic Act No. 8762 is hereby amended 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 minimum 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 minimum 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 shall ensure that the 
parent retail trading company 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 Matters of the National Economic 
and Development Authority (NEDA) Board shall formulate and regularly update


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a list of foreign retailers [o f high-end or luxury goods] and render an annual 
report on the same to Congress."
Section 4. Section 9 of Republic Act No. 8762 is hereby amended to read as follows;
"Sec. [9] 7. Promotion of Locally Manufactured Products. - [For ten (10) years 
after the effectivity of this Act, at] AT least [th irty ] TEN percent [(3 0 % )] (10% ) 
of the aggregate cost of the stock inventory of foreign retailers [falling under 
Categories B and C and ten percent (10% ) for Category D] shall be made in 
the Philippines."
Section 5. Repealing Clause. -  Republic Act No. 8762, and all laws, decrees, 
executive orders, letters of instructions and regulations or any part thereof which are 
inconsistent with any provision of this Act are hereby repealed, amended, or modified 
accordingly.
Section 6. Separability Clause. - If for any reason, any selection or provision of his 
Act is declared to be unconstitutional or invalid, the other sections or provisions of this 
Act which are not affected shall continue in full force and effect.
Section 7. Effectivity. - This Act shall take effect after fifteen (15) days following its 
publication in at least two (2) newspapers of general circulation or in the Official 
Gazette.
Approved,