NextGen Day

President Rodrigo Duterte has signed a bill into law that will make the Philippine retail sector more accessible to international retailers by decreasing the needed paid-up capital.

Duterte signed Republic Act (RA) 11595 on Dec. 10, 2021, amending RA 8762, popularly known as the Retail Liberalization Act of 2000, and it was disclosed to reporters on Thursday.

The law was previously classified as urgent by Duterte as part of his efforts to promote more investors and aid economic recovery amid the ongoing coronavirus disease 2019 (Covid-19) pandemic.

“A foreign retailer shall have a minimum paid-up capital of PHP25 million,” according to the law.

The existing law stipulates a capital requirement of USD2.5 million (PHP119.67 million).

The law also requires international shops from nations that do not prevent Filipino retailers from entering.

The minimum investment per store for foreign retailers operating multiple physical stores must be at least PHP10 million, “provided that this requirement shall not apply to foreign investors and foreign retailers who are legitimately engaged in retail trade and were not required to comply with the minimum investment per store at the time of the effective date of this Act.”

Every three years, the Department of Trade and Industry, the Securities and Exchange Commission, and the National Economic and Development Authority will evaluate the required minimum paid-up capital and provide recommendations to Congress.

Foreign retailers are encouraged to keep a stock inventory of Philippine-made goods on hand.

Violators may face a sentence of four to six years in prison and a fine of not less than PHP1 million but not more than PHP5 million if they violate the law.

The punishment shall be imposed on the partners, president, directors, general manager, and other officers responsible for the breach in the case of partnerships, associations, or companies.

If the perpetrator is not a Philippine citizen, he or she will be deported as soon as the sentence is served.

If the Filipino offender is a public officer or employee, he or she will face dismissal and permanent disqualification from public office in addition to the penalty imposed.

RA 11595 is a merger of House Bill 59 and Senate Bill 1840, which were passed by the House and Senate on September 21 and 20, respectively, last year.

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