Zubiri on Retail Trade Amendment: Foreign Investors Welcome, but Protect MSMEs

On Monday, the Senate ratified the bicameral conference committee report for the amendments to the Retail Trade Liberalization Act. The bill seeks to lower the capitalization requirement for foreign retailers from USD 2.5 million to USD 500,000, or roughly from PHP 125 million to PHP 25 million. This is in order to attract more foreign direct investments into the country, thereby fostering competition, lowering market prices, and creating more local jobs.

Senate Majority Leader Juan Miguel Zubiri, one of the original authors of the bill, fought to keep the capitalization level at PHP 25 million, against the House version's proposed PHP 10 million.

"We did this to protect our micro-, small-, and medium enterprises," Zubiri said. "Because while we gladly welcome foreign investors, we must always prioritize the interests of our local business sector, particularly our MSMEs who make up 99 percent of our corporate taxpayers. Lalo na ngayong patuloy pa rin and pandemya at marami pa sa kanila ang hindi nakaka-recover mula dito."

The ratified bicameral conference report also mandates a per-store amount requirement of PHP10 million for foreign retailers with more than one physical store. This is seen to prevent foreign retailers from breaking up their investment to create smaller shops that will compete with MSMEs.

"We really had to find a balance between attracting foreign investors and also protecting our local sectors," Zubiri added. "And overall I think we have hit a good compromise. I think this is a landmark bill that will do wonders for our economy, particularly as we recover from the pandemic. I am especially hopeful about all the employment opportunities that this will open up for our people."