Pending a post-pandemic scenario, the retail sector in the country is a promising part of our journey towards economic recovery.
Before the impact of the global pandemic, the Filipino consumer base was strong, made up of an expanding middle class also with expanding disposable income. The country had a strong economic outlook, mainly thanks to spending by young professionals in the service sector such as the BPO industry, and remittances from foreign Filipinos whose families were grabbing goods from the automotive, real estate and retail.
The economic impact of the pandemic, which is more felt now as record numbers continue to rise daily, would be too huge to trace, with some experts saying the repercussions would be felt for years to come. In the face of this situation, the government must do all it can, within the limits of its powers, to improve the business sector.
One of the “good news” on the economic front is the signing of Republic Law 11595, or the Amended Retail Liberalization Law (RTLA) by President Duterte in December 2021. The Secretary in Finance, Carlos Dominguez III, welcomed the signing and cited the law. as “crucial as the country recovers from the global and financial crises induced by the pandemic”.
“As we continue on our way to recovery, (this) economic liberalization bill… will be crucial in attracting much-needed foreign investment that would energize the economy and create many more jobs for Filipinos,” Dominguez said.
RA # 11595 will simplify and ease restrictions for overseas retailers wishing to locate in the Philippines. For example, the minimum paid-up capital for foreign retail investors has been lowered to 25 million pesos, or about one-fifth of the previous requirement of 125 million pesos. It also removed other previous requirements that discouraged foreign retailers from locating in the Philippines.
From a high of around 41.5 million pesos, the minimum investment per store has been lowered to 10 million pesos for those with more than one physical store. This clearly encourages the establishment of so many points of sale in different places.
“By lowering minimum paid-in capital and simplifying qualification requirements, the changes will help attract foreign retailers to come and create jobs. It will also strengthen competition between businesses, which will benefit our consumers by offering more choice at lower and more competitive prices, ”explained Dominguez. “These are welcome changes from the previous rule which disproportionately favored already large companies and prevented various small investors such as startups from entering the local retail market.”
What is laudable about the law is that reciprocity is invoked. Foreign retailers can only operate in the Philippines if their home country also allows Filipino retailers to open businesses. Hiring “competent, willing and able Filipino citizens” is also a priority; hiring of foreign nationals would only be allowed if there are no qualified Filipinos. The new law also encourages foreign retailers to have a stock of locally produced products.
Once this law is in place, attention must now be focused on its proper implementation and promotion. Our retail industry deserves all the help as it not only provides thousands of decent and permanent jobs, it is an exponential industry teeming with opportunities that could pave the way for our post-pandemic recovery. country.
SUBSCRIBE TO THE DAILY NEWSLETTER
CLICK HERE TO REGISTER