PH signs new law that lowers investments for foreign enterprises
President Rodrigo R. Duterte recently signed a law that lowers the minimum investment of foreign retailers from P125 million ($2.5 million) to P25 million (US$488,000), in hopes of attracting more Foreign Direct Investments (FDI) into the Philippines.
Under the newly amended Retail Trade Liberalization Act of 2000, the foreign retailer’s country of origin must allow the entry of Filipino retail enterprises in their markets, and foreign investors with more than one physical store should invest at least P10 million (US$195,000) per store.
British Chamber of Commerce Philippines Executive Director Chris Nelson said that they are planning to highlight this development to bring in more UK-based firms in the country.
Meanwhile, Asian Institute of Management Economist John Paolo R. Rivera said that the new amendment will be beneficial to consumers as it will present more products at lower prices.
However, Philippine Retailers Association (PRA) Vice Chairman Roberto S. Claudio noted that this could affect micro, small, and medium enterprises (MSMEs) as they will now have to compete with foreign businesses.
To safeguard the interest of local retailers, the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), and the National Economic and Development Authority (NEDA) are mandated to review the capitals of foreign businesses every three years.
Violations will be punishable by up to six years of imprisonment and a fine of at most P5 million.
