The Philippine Retailers Association (PRA) is open to a compromise on the minimum paid-up capital of foreign firms entering the retail sector.
PRA president Rosemarie Ong said on the sidelines of the 26th National Retail Conference and Stores Asia Expo ’19 that while the group would prefer to retain the current minimum paid-up capital for foreign firms to be allowed to take part in the country’s retail sector, they are open to a compromise on the new threshold level as government wants to attract more foreign investments.
She said the group would want the country to maintain the minimum paid-up capital for foreign firms under the Retail Trade Liberalization Act of 2000 at $2.5 million as this is lower than the thresholds imposed in other Southeast Asian countries.
PRA chairman emeritus Samie Lim said Thailand, for instance, requires a $4 million capital investment for foreign firms in the retail sector, while Malaysia’s threshold varies depending on the retail format with the investment for a hypermarket at $13 million and a department store at $5.1 million.
Senate Bill 14 filed by Sen. Franklin Drilon last month seeks to amend the Retail Trade Liberalization Act by setting an across the board minimum paid-up capital investment of $200,000 for foreign firms.
Apart from lowering the minimum paid-up capital of foreign retail companies, the bill states that at least 10 percent of the aggregate cost of stock inventory of foreign retailers should be manufactured locally.
“I think everybody is really pushing for bringing it (minimum paid-up capital) down to attract more investors because they believe it will also help the economy in terms of investments coming in, creating more jobs and of course, it’s really a call for everyone to be more competent to improve and shape up. However, if there is really no way for us, we’re willing to compromise but not $200,000,” Ong said.
Source: Philippine Star