THE SENATE on Monday ratified the Bicameral Conference Committee report on a measure that seeks to lower the minimum investment hurdle for foreign retailers to P25 million.
Senators approved the Bicameral Conference Committee report on the conflicting provisions of Senate Bill No. 1840 and House Bill No. 59, which amends the 20-year-old Retail Trade Liberalization Act. This is one of the three priority economic measures being pushed by the government and foreign business groups.
The House of Representatives has yet to ratify the bicameral report as of Monday. Once approved, it will be sent to Malacanang for President Rodrigo R. Duterte’s signature.
Under the reconciled version, the minimum paid-up capital requirement for foreign retailers was set at P25 million or around $500,000, with a per store requirement of P10 million. This is lower than existing law’s minimum paid-up requirement of $2.5 million or P125 million for foreign retailers.
The House version originally proposed lowering the minimum paid-up capital requirement to P10 million, while Senate version had approved a P50-million requirement.
Senator Aquilino Martin de la Llana Pimentel III, a primary sponsor, said these amendments could hopefully attract more investments and create more jobs.
Mr. Pimentel said the lawmakers introduced changes in the existing law that would allow Philippine corporations with not more than 40% foreign equity to engage in retail trade, even below the minimum threshold amount.
Among the retained provisions from the Senate version were the preferential use of Filipino labor and foreign retailers’ use of local products in their stock inventory, the senator said.
Penal provisions, imprisonment and fines were also amended, making them more “reasonable,” said Mr. Pimentel, without providing details.
“We are not after charging persons criminally, we are after their investments and providing jobs in the Philippines,” he added.
“The passage of the amendments of this 21-year-old law comes at the most opportune time when the country needs all the support to help our economy recover because of the pandemic,” Minority Leader Franklin M. Drilon told the upper chamber. “I am confident that this key trade reform bill will create more jobs for our people, improve our competitiveness and ease our FDI restrictiveness,” he added.
The country is currently ranked as the third-most restrictive out of the 83 economies on the foreign direct investment regulatory restrictiveness index, according to the Organisation for Economic Cooperation and Development. — A.N.O.Tan