Close  

Liberalized retail trade still gov’t priority

/ 05:14 AM August 06, 2020

The Department of Trade and Industry (DTI) wants to make it easier for foreign businesses to set up shop here, easing their burden at a time when the health crisis has left Filipino mom-and-pop stores struggling to even pay rent.

In a recent Zoom conference with foreign business groups, Trade and Industry Secretary Ramon Lopez said the government wanted to improve the investment climate in the Philippines as part of its strategy to recover from the economic impact of the pandemic.

ADVERTISEMENT

To do this, the DTI wanted Congress to pass economic bills, including amendments to the retail trade law and the Public Service Act. The House of Representatives already passed these amendments in March, but the Senate is yet to pass the counterpart bills.

Lopez also reiterated his support for Create, or the Corporate Recovery and Tax Incentives for Enterprises Act, which would give corporate tax cuts and rationalize tax breaks. This, too, has not passed in the Senate. While amending the Public Service Act will open the country to big foreign investors, amending the retail trade law will open it to small ones, and possibly even make an already difficult business environment worse for local micro, small and medium-sized enterprises (MSMEs). Under the retail trade law, foreign retailers can only enter the Philippine if their minimum paid-up capital investment is at least $2.5 million. The law specifically set that requirement to spare Filipino MSME retailers from foreign players that might push them out of competition.

FEATURED STORIES

However, the lower House amended the minimum paid-up capital investment to $200,000, or close to just P10 million. Doing this especially now, according to the Philippine Retailers Association (PRA), would be unfair to local MSMEs.

“In light of the business economics of what this pandemic has created where major retailers worldwide are declaring bankruptcy or downsizing, very few foreign retailers will venture into the Philippines even if the threshold is reduced,” PRA vice chair Roberto Claudio said in a Viber message on Wednesday.

“We will only subject our Filipino MSME retailers to unfair competition. Also, this will negate [the] program of “Buy Local” initiative [which was] launched to help our local industries recover from the negative economic effects of this pandemic. What good will prioritizing this bill do for our economy?” he said.It remains to be seen if the bills would be passed this year, but Lopez said these would be given top priority.

“If you ask the economic managers, [these are] at the top of the list, but of course, [that’s] aside from the Create tax reform [bill],” he said.

“We’ll continue to push for [these], hopefully, within the year,” Lopez said.

ADVERTISEMENT
Subscribe to Inquirer Business Newsletter
Read Next
EDITORS' PICK
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Department of Trade and Industry (DTI), Retail Trade, Trade and Industry Secretary Ramon Lopez
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.