MANILA -- The Philippine Chamber of Commerce and Industry (PCCI) wants to maintain the USD2.5-million threshold as minimum paid-up capital for foreign investors in retail trade activities in the Philippine mart.
During the media briefing for the 43rd Philippine Business Conference and Expo (PBCE) Friday, PCCI president George Barcelon said lowering the minimum capital for foreign brands to enter retail trade activities here is not really attracting long-term investments and much needed technologies to level up the local sector.
Barcelon added that the country can still attract investors with the government’s initiatives to improve the business climate and infrastructure.
“We want to attract more investments. Let’s be prudent in the sense we want to attract legitimate companies with substantial capital and technology. If the entry point is so low, what will happen is they have nothing to lose, they will just try it. They may not have a vision of staying,” he mentioned.
“The best is that we stick to that (USD2.5-million minimum paid-up capital). Since the country now embarks on improving the business condition, on the infrastructure. That should itself attract legitimate business entities to come,” he noted.
The PCCI chief said if the government would be lowering the minimum capital for foreign investors to USD200,000, as mentioned by Socioeconomic Planning Secretary Ernesto Pernia, this would be among the lowest threshold in Southeast Asia.
“If other country is not doing this, then why we will be opening ourselves in such low threshold for people to come in?”Barcelon asked.
Philippine Exporters Confederation (Philexport) President Sergio Ortiz-Luis Jr. said the business group would like to be more enlightened on what is pushing the government to lower the minimum capital for foreign players to enter the local retail trade market.
“The USD200,000 entry, from abroad it’s a micro and small retailers that are coming in and probably even borrow their own money here and crowd out our MSEs (micro and small enterpises),” added Ortiz-Luis.
“You tried to attract investors because of the investments they would bring in, of the technology they would bring in. What can you expect from these micro and small enterprises to bring in here, with that capital to the Philippines? Why even lower it and crowd out our MSEs?” he said.
He cited that aside from competition, local micro- and small-size businesses are facing challenges like access to finance and location, among others.
Ortiz-Luis also recalled that the original Retail Trade Liberalization Act was pushed by Philexport and has minimum paid-up capital of USD10 million before it was lowered to USD5.0 million and further cutting to the current USD2.5-million threshold. (PNA)
