Section
1. Title. - This Act shall be known as the "Retail Trade
Liberalization
Act of 2000."
Sec. 2. Declaration
of Policy. - It is the policy of the State to promote consumer
welfare
in attracting, promoting and welcoming productive investments that will
bring down prices for the Filipino consumer, create more jobs, promote
tourism, assist small manufacturers, stimulate economic growth and
enable
Philippine goods and services to become globally competitive through
the
liberalization of the retail trade sector.
Pursuant to
this policy, the Philippine retail industry is hereby liberalized to
encourage
Filipino and foreign investors to forge an efficient and competitive
retail
trade sector in the interest of empowering the Filipino consumer
through
lower prices, higher quality if goods, better services and wider
choices.
Sec. 3. Definition.
- As used in this Act:
(1) "Retail
Trade" shall mean any act, occupation or calling of habitually
selling
direct to the general public merchandise, commodities or goods for
consumption,
but the restriction of this law shall not apply to the following:
(a)
Sales by a manufacturer, processor, laborer, or worker, to the general
public the products manufactured, processed or produced by him if his
capital
does not exceed One Hundred Thousand Pesos (P100,000.00);
(b) Sales by
a
farmer or agriculturist selling the products of his farm;
(c) Sales
in
restaurant operations by a hotel owner or inn-keeper irrespective of
the
amount of capital: Provided, that the restaurant is incidental
to
the hotel business; and
(d) Sales
which
are limited only to products manufactured, processed or assembled by a
manufacturer through a single outlet, irrespective of capitalization.
(2)
"High-end or luxury goods" shall refer to goods which are
not
necessary
for life maintenance and whose demand is generated in large part by the
highest income groups. Luxury goods shall include, but are not limited
to, products such as: jewelry, branded or designer clothing and
footwear,
wearing apparel, leisure and sporting goods, electronics and other
personal
effects.
Sec. 4. Treatment
of Natural-Born Citizen Who Has Lost His Philippine
Citizenship.
- A natural-born citizen of the Philippines who has lost his
Philippine
citizenship but who resides in the Philippines shall be granted the
same
rights as Filipino citizens for purposes of this Act.
Sec. 5. Foreign
Equity Participation. - Foreign-owned partnerships, associations
and
corporations formed and organized under the laws of the Philippines
may,
upon registration with the Securities and Exchange Commission (SEC) and
the Department of Trade and Industry (DTI) or in case of foreign-owned
single proprietorships, with the DTI, engage or invest in the retail
trade
business, subject to the following categories:
Category
A - Enterprises with paid-up capital of
the
equivalent in Philippine Pesos of less than Two Million Five Hundred
Thousand
US Dollars (US$2,500,000.00) shall be reserved exclusively for Filipino
citizens and corporations wholly-owned by Filipino citizens.
Category B
- Enterprises with a minimum paid-up capital of the equivalent in
Philippine
Pesos of Two Million Five Hundred Thousand US Dollars (US$2,500,000.00)
may be wholly owned by foreigners except for the first two (2) years
after
the effectivity of this Act wherein foreign participation shall be
limited
to not more than (60%) of total equity.
Category C
- Enterprises with a paid-up capital of the equivalent in Philippine
Pesos
of Seven Million Five Hundred Thousand US Dollars (US$7,500,000.00) or
more maybe wholly owned by foreigners: Provided, however, that
in
no case shall the investments for establishing a store in Categories B
and C be less than the equivalent in Philippine Pesos of Eight Hundred
Thirty Thousand US Dollars (US$830,000.00).
Category D
- Enterprises specializing in high-end or luxury products with a paid
up
capital of the equivalent in Philippine Pesos of Two Hundred Fifty
Thousand
US Dollars (US$250,000.00) per store may be wholly-owned by foreigners.
The
foreign investor shall be required to maintain in the Philippines, the
full amount of the prescribed minimum capital. Unless the foreign
investor has notified the SEC and the DTI of its intention to
repatriate
its capital and cease operations in the Philippines. The actual use in
Philippine operations of the inwardly remitted minimum capital
requirements
shall be monitored by the SEC.
Failure retail
stores shall secure a certification from the Bangko Sentral ng
Pilipinas
(BSP) and the DTI, which will verify or confirm inward remittance of
the
minimum required capital investment.
Sec..
6. Foreign Investors Acquiring Shares of Stock of Local Retailers. -
Foreign Investors acquiring shares from existing retail stores whether
or not publicly listed whose net worth is in excess of the peso
equivalent
of Two Million Five Hundred Thousand US Dollars (US$2,500,000.00) may
purchase
only up to a minimum of sixty percent (60%) of the equity thereof
within
the first two (2) years from the effectivity of this Act and
thereafter,
they may acquire the remaining percentage consistent with the allowable
foreign participation as herein provided.
Sec. 7. Public
Offering of Shares of Stock. - All retail
trade
enterprises under Categories B and C in which foreign ownership exceeds
eighty percent (80%) of equity shall offer a minimum of thirty percent
(30%) of their equity to the public through any stock exchange in the
Philippines
within eight (8) years from their start of operations.
Sec. 8. Qualifications
of Foreign Retailers. - No foreign retailer shall be allowed to
engage
in retail trade in the Philippines unless all the following
qualifications
are met:
(a)
A minimum of Two Hundred Million US Dollars (US$200,000,000.00) net
worth
in its parent corporation for Categories B and C, and Fifty Million US
Dollars (US$50,000,000.00) net worth in its parent corporation for
Category
D;
(b)
Five
(5) retailing branches or franchises in operation anywhere around the
world
unless such retailers has at least one (1) store capitalized at a
minimum
of Twenty-Five Million US Dollars (US$25,000,000.00);
(c)
Five
(5)-year track record in retailing; and
(d)
Only
nationals from, or judicial entities formed or incorporated in,
countries
which allow the entry of Filipino retailers, shall be allowed to engage
in retail trade in the Philippines.
The
DTI is hereby authorized to pre-qualify all foreign retailers, subject
to the provisions of this Act, before they are allowed to conduct
business
in the Philippines.
The DTI shall keep
a record of qualified foreign retailers who may, upon compliance with
law,
establish retail stores in the Philippines. It shall ensure that
the parent retail trading company of the foreign investor complies with
the qualifications on capitalization and track record prescribed in
this Sec..
The
Inter-Agency
Committee on Tariff and Related Matters of the National Economic
Development
Authority (NEDA) Board shall formulate and regularly update a list of
foreign
retailers of high-end or luxury goods and render an annual report on
the
same to Congress.
Sec. 9. Promotional
of Locally Manufactured Products. - For ten
(10)
years after the effectivity of this Act, at least thirty percent (30%)
of the aggregate cost of the stock inventory of foreign retailers
falling
under Categories B and C and ten percent (10%) for Category D, shall be
made in the Philippines.
Sec. 10.
Prohibited Activities of Qualified Foreign Retailers. -
Qualified
foreign retailers shall not be allowed to engage in certain retailing
activities
outside their accredited stores through the use of mobile or rolling
stores
or carts, the use of sales representatives, door-to-door selling,
restaurants
and sari-sari stores and such other similar retailing activities: Provided,
that a detailed list of prohibited activities shall hereafter
be
formulated
by the DTI.
Sec. 11.
Implementing Agency; Rules and Regulations. - The
monitoring and
regulation of foreign sole proprietorships, partnerships, associations
or corporations allowed to engage in retail trade shall be the
responsibility
of the DTI. This shall include resolution of conflicts.
The DTI, in
coordination with the SEC, the NEDA and the BSP, shall formulate and
issue
the implementing rules and regulations necessary to implement this Act
within ninety (90) days after its approval.
Sec. 12. Penalty
Clause. - Any person who shall be found guilty of
violation
of any provision of this Act shall be punished by imprisonment of not
less
than six (6) years and one (1) day but not more than eight (8) years,
and
a fine of not less than One Million Pesos (P1,000,000.00) but not more
than Twenty Million Pesos (P20,000,000.00).
In
the case of associations, partnerships or corporations, the penalty
shall
be imposed upon its partners, president, directors, managers and other
officers responsible for the violation. If the offender is not a
citizen of the Philippines, he shall be deported immediately after
service
of sentence. If the Filipino offender is a public officer or
employee,
he shall, in addition to the penalty prescribed herein, suffer
dismissal
and permanent disqualification from public office.
Sec. 13. Repealing
Clause. - Republic Act No. 1180, as amended, is hereby
repealed.
Republic Act No. 3018, as amended, and all other laws, executive
orders,
rules and regulations or parts thereof inconsistent with this Act are
repealed
or modified accordingly.
Sec. 14.
Separability Clause. - If any provision of this Act shall
be
held
unconstitutional, the other provisions not otherwise affected thereby
shall
remain in force and effect.
Sec. 15.
Effectivity. - This Act shall take effect fifteen (15)
days
after
its approval and publication in at least two (2) newspapers of general
circulation in the Philippines.
MANUEL
B. VILLAR, JR.Speaker
of the House of Representatives BLAS F.
OPLEPresident
of the Senate
[This Act,
which is a consolidation of Senate Bill No. 153 and House Bill No.
7602,
was finally passed by the Senate and House of Representatives on
February
15, 2000].
ROBERTO
P. NAZARENOSecretary
GeneralHouse
of
Representatives HEZEL
P.
GACUTANSecretarySenate
Approved:
JOSEPH
EJERCITO ESTRADAPresident
of the Philippines
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