Corrective legislation approved by Congress updating the 22-year-old retail law that President Duterte signed this week was supposed to propel the country’s rapid economic recovery.
Even the leader of the opposition senatorial minority, Franklin M. Drilon, has shown optimism as the lead author of the new Republic Act (RA) 11595, predicting that it “will pave the way for the country’s economic recovery ”.
Hailing its “timely enactment”, Drilon described it as “a game-changing law the country needs today to accelerate our economic recovery.”
“I have no doubts that our amendments to the 2000 Retail Trade Liberalization Act will provide the necessary impetus for our foreign direct investment. “
“This will remove a number of obstacles to foreign investment,” Drilon said, stressing that the prompt enactment of the measure “will strengthen the country’s chances of returning to the level of economic growth before the pandemic.”
This, as the minority leader acknowledged in a press release, that the country’s economy has become one of the weakest in Southeast Asia due to the pandemic.
He noted on Monday that the newly signed Republic Law 11595 had lowered the paid-up capital required in the retail business to 25 million pesos from its previous limit of $ 2.5 million, or about 125 million pesos.
Drilon added that the new law “also eases restrictions on foreign investment” by removing investment categories and setting a general minimum paid-up capital investment equivalent to 25 million pesos.
Recalling that the threshold was designed to “protect small and medium-sized enterprises in the country”, explained Drilon, “it will strike a balance between encouraging foreign investment and stimulating the development of the local retail sector”.
The senator claimed that 22 years after the adoption of RA 8762, “the Philippines still has a very poor retail investment portfolio”, recalling that in 2021 there were only about 46 Foreign retail companies registered with the Department of Trade and Industry (DTI), growing by two retailers per year since 2000.
At the same time, the opposition lawmaker has lamented since the enactment of the law, the share of wholesale and retail trade in total net foreign direct investment indicates that net investment inflows in the Philippines have been “ very minimal ”with an average annual growth of only 5 percent.
Drilon regretted that over a five-year period from 2012 to 2016, Southeast Asian countries received an average of $ 17 billion in foreign investment in the retail sector while, a- He noted, the Philippines’ share of the total over the same period averaged $ 107 million or 0.006%.
Earlier, the Senate Minority Leader said that in 2016 alone, the Philippines received just $ 101 million in foreign investment in the retail sector, while Thailand received 3.2. billion, Malaysia 2.5 billion, Indonesia 2 billion and Vietnam 2 billion.
Further, he added that Singapore has received over $ 8 billion, almost more than all other ASEAN economies combined, adding that Singapore has no restrictions on foreign investment in retail and benefits from ‘a per capita income of 88,000 dollars.