Finance Secretary Carlos Dominguez III has lauded President Duterte and the Congress for the enactment into law of a measure backed by the Department of Finance (DOF) that seeks to further liberalize the Philippine economy and open the country to more foreign direct investments (FDIs) and job creation.
“As we continue our path to recovery, the economic liberalization bills either passed or bring considered by our lawmakers will be crucial to bringing in much needed foreign investments that would supercharge the economy and create a lot more jobs for Filipinos, more so at this time when the country is recovering from the pandemic-induced global health and financial crises,” said Dominguez.
Republic Act (RA) No. 11595, which amended the RTLA, was signed into law by the President in December and was released by the Palace last week.
Dominguez said the provisions of this measure will simplify and ease restrictions for foreign retailers that wish to set up shop in the Philippines.
RA 11595 is one of the three investor-friendly measures endorsed by President Duterte and whose passage had been pushed in the Congress by Dominguez and the rest of the Chief Executive’s economic team.
The two others are the amendatory bills to the Public Services Act (PSA) and the Foreign Investment Act (FIA).
The bicameral committee (bicam) report on the amendments to the FIA was ratified by both Houses on December 7, 2021 and is currently pending review by the Office of the President (OP).
Meanwhile, the Senate and House have passed their respective versions of the bill amending the PSA, but still has to go through bicam proceedings before being ratified by both chambers and then submitted to the President for his approval.
In RA 11595, the minimum paid-up capital requirement for foreign corporations planning to do business here was lowered from P125 million to P25 million. The qualification requirements were also simplified by removing required net worth, number of retailing branches, and retailing track record conditions.
“By lowering the minimum paid-up capital and simplifying the qualification requirements for foreign retailers, the amendments will significantly aid in incentivizing foreign retailers to come in and create jobs. This will also enhance competition among enterprises, which will be beneficial to our consumers by providing more choices at lower and more competitive prices,” said Dominguez.
“These are welcome changes from the previous rule that disproportionately favored already-large enterprises, prevented diverse smaller investors such as startups from entering the Philippine retail market, and complicated compliance for foreign retailers,” Dominguez said.
Additionally, the new law also encourages foreign retailers to have a stock inventory of products that are made in the Philippines.
“This will help protect our country’s small local manufacturers and encourage retailers to provide opportunities for locally-made products, despite being foreign-owned. We hope this will also aid in generating much needed employment and income for Filipinos,” said Dominguez.
The Finance Secretary thanked the Congress for writing the law and ensuring its benefits to the country and its constituents.
“We deeply express our gratitude to our legislators for their determination in passing the amendments to the Retail Trade Liberalization Act. We also look forward to continuously working with them on the enactment of the remaining two economic liberalization bills,” said Dominguez.
“We thank Senate President Vicente Sotto III, Speaker Lord Allan Velasco, the chairpersons and members of the Bicameral Conference Committee, and the sponsors and authors in both chambers for their collective efforts behind the passage of RA 11595,” Dominguez added.
Dominguez also thanked the National Economic and Development Authority (NEDA) for pushing the passage of the economic liberalization bills, along with the rest of the Economic Development Cluster (EDC) of the Cabinet.
“We thank President Duterte for his timely approval of the proposed law and our fellow economic managers in the executive branch for leading the push to further liberalize our economy,” said Dominguez.