If I were a producer, I should be happy because I will have more market or retail shops to sell products.
Micro enterprises account for 89.59 percent of the country’s employment while small enterprises comprise 9.56 percent.
Micro and small enterprises are still protected under proposed amendments in the Retail Trade Liberalization Act (RTLA) seeking to further open up the country’s retail trade industry to foreign players, the trade agency said.
Department of Trade and Industry (DTI) secretary Ramon Lopez said the measure only opens up competition for medium-sized enterprises, or those with paid-up capital worth over P15 million.
The measure aims to cut down the required minimum paid-up capital of foreign companies entering the local retail industry to $200,000 from $2.5 million. The DTI, on the other hand, is pushing for a higher threshold of $300,000.
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“We have to realize that first, the micro and small level enterprises are still protected — that’s why we set it at the vicinity of $300,000, so that’s about P15 million. Our definition of P15 million is micro and small, that’s below,” Lopez told reporters at the sidelines of a signing in Manila Friday last week.
The bill amending Republic Act 8762, or the RTLA, is revived in the current congress after failing to hurdle the previous one. The proposed changes are seen to boost the flow of foreign investments into the country’s retail industry, as well as create competition enough to encourage the companies’ innovation.
However, objectors to the amendments, including the Philippine Retailers Association (PRA), note that bringing down the minimum requirement to enter the industry could harm the country’s micro, small and medium enterprises (MSME), a sector that makes up more than 99 percent of the country’s total businesses.
But Lopez added that even once medium-size retailers have entered the industry, they would still need to allot a portion of their stock inventory to domestically-produced products.
“If I were a producer, I should be happy because I will have more market or retail shops to sell products. I will have more market access. As long as the product is good — that’s what domestic manufacturers should work on. I’m talking about medium- to large-sized retailers because that’s what will be open up,” he said.
