Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Eighteenth Congress
First Regular Session

House Bill No. 4554

Introduced by Representative Sharon S. Garin

EXPLANATORY NOTE

Republic Act 8762, otherwise known as Retail Trade Liberalization Act of
2000, was designed to create a market where Filipino consumers can enjoy better
Services and higher quality of goods for cheaper prices, It opened the retail industry
to new players and leveled the playing field among Filipino business owners and
foreign investors

This measure, however, was created 20 years ago and can barely meet the
demands posed by rapid globalization. In terms of retail trade, the Philippines is
struggling to keep up with its ASEAN neighbors due to the country's restrictive
Policies. To usher a more productive retail industry, this bill aims to lower the
minimum paid-up capital for foreign retail business enterprises and require them
create a locally-produced stock inventory. Further, to ensure bilateral cooperation,
only nationals from or juridical entities formed or incorporated in countries where
Filipinos retailers are allowed entry shall be allowed to engage in retail trade in the
Philippines

This representation maintains that the global paradigm shift toward economic
liberalism calls for a policy change. The expected influx of foreign investments upon
the enactment of this bill will increase economic activity and employment for the
benefit of the Filipino consumer.

In view of the foregoing, the urgent passage of this bill is earnestly sought

AAMBIS45WA Party-list


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Eighteenth Congress
First Regular Session

House Bill No. 4554

Introduced by Representative Sharon S. Garin

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

Be it enacted by the Senate and House of Representatives of 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 WITH A MINIMUM PAID-UP CAPITAL OF THE
EQUIVALENT IN PHILIPPINE PESO OF TWO HUNDRED
THOUSAND US DOLLARS (US$ 200,000.00). [, subject to the
following categories:]

[Category A - Enterprises with paid-up capital of the equivalent
in Philippine Pesos of less than Two million five hundred thousand US
dollars (US$2,500,000.00) 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$2,500,000.00) but less than Seven million five hundred
thousand US dollars (US$7,500,000.00) 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 - Enterprises with a paid-up capital 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 les than the equivalent in
Philippine Pesos of Eight hundred thirty thousand US dollars
(US$830,000.00),]

[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$250,000.00) per store may
be wholly owned by foreigners.]

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 operations of the inwardly
remitted [minimum] capital [requirement] shall be monitored by the
SEC.

Failure to maintain the [full] amount of [the prescribed 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

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.


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 amended to read as
follows:

“Sec. 8. Qualification of Foreign Retailers [No foreign retailer
shall be allowed to engage in retail trade in the Philippine unless all the
following qualifications are met

(a) A minimum of Two hundred million US dollar
(US$200,000,000.00) net worth in its parent corporation for Categories
B and C, and Fifty million US dollar (US$50,000,000.00) net worth in
its parent corporation for category D;

(b) (5) retailing branches or franchises in operation anywhere
around the word unless such retailer has at least one (1) store
capitalized at a minimum of Twenty-five million US dollars
(US$25,000,000.00);

(c) Five (5)-year track record in retailing; and

(A)] 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 Philippine
[it shall ensure that 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
Authority under the NEDA Board shall formulate and regularly update a
list of foreign retailers of high-end or luxury goods and render an
annual report on the same to Congress.


SEC. 5. Section 9 of Republic Act No. 8762 is hereby amended to read as
follows:

“Sec. 9. Promotion of Locally Manufactured Products. — [For ten
(10) year after the effectivity of this Act, af] AT least [thirty] TEN
Percent (10%) {(30%)] 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

SEC. 6. Separability Clause. — If any provision of this Act is held invalid or
unconstitutional, the remaining parts or provisions not affected shall remain in full
force and effect,

SEC. 7. Repealing Clause. — All laws, decrees, executive orders and
Proclamations, rules and regulations or parts thereof inconsistent with this Act, are

hereby amended or modified accordingly.

SEC. 8. Effectivity. - This Act shall take effect fifteen (15) days after its
Publication in the Official Gazette or in a newspaper of general circulation.

Approved,