(Photo Courtesy: Rep. Stella Quimbo's Facebook page)
MANILA –A lawmaker at the House of Representatives on Wednesday said it is high time to open the retail trade sector to foreign competition by lowering the capital requirements for foreign retailers.
Marikina Rep. Stella Luz Quimbo said despite a law that was passed in 2000 to liberalize retail trade, only 43 foreign retail investments have been recorded in the last 19 years generating approximately 22,000 jobs, equivalent to only 0.6 percent of the total jobs in wholesale and retail within that period.
Quimbo stressed the need to bring down the minimum paid-up capital for foreign firms engaged in retail trade business to USD200,000 from the current USD2.5 million.
The lawmaker backed the proposal to amend the Retail Trade Liberalization Act by reducing the thresholds for paid-up capital to USD200,000.
“While this is still higher than income comparators in the Asean, this is a considerable reduction. The proposed threshold of 200,000 USD balances the need to be competitive in the Asean region and at the same time, to continue to protect micro and small establishments from foreign competition,” she said.
Citing Philippine Statistics Authority data, Quimbo said only medium and large establishments would be directly affected by increased foreign competition under these amendments.
“This makes up less than 1 percent of all establishments that will possibly face stiffer competition from foreign retail firms,” she said.
“Kaya’t ang epekto ng pagbaba ng minimum paid-up capital ay dadami at titindi ang kompetisyon na haharapin ng mga dambuhalang kompanya at monopolyo (The effects of lowering the minimum paid-up capital would increase and big companies and monopolies would face tighter competition),” she added.
With the anticipated greater competition, Quimbo urged the Department of Trade and Industry (DTI) to formulate and implement a roadmap for the retail sector.
She said the DTI must identify retail market niches where possibly disenfranchised retail firms could redeploy their labor and capital.
“Our government must also ensure that both skills training and credit are made available for purposes of helping local retail firms re-shape their businesses, so they can be fully capacitated to face growing international competition,” she added.
She also urged other government agencies to ensure that existing anti-competitive structures in the retail sector be dismantled.
“Hindi dapat katakutan ang kompetisyon (We should not fear competition). Let us embrace competition particularly in the retail sector as this will discipline the huge retail firms and conglomerates,” she added. (PNA)
