1. Title. - This Act shall be known as the "Retail Trade
Act of 2000."
Sec. 2. Declaration
of Policy. - It is the policy of the State to promote consumer
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
Philippine goods and services to become globally competitive through
liberalization of the retail trade sector.
this policy, the Philippine retail industry is hereby liberalized to
Filipino and foreign investors to forge an efficient and competitive
trade sector in the interest of empowering the Filipino consumer
lower prices, higher quality if goods, better services and wider
Sec. 3. Definition.
- As used in this Act:
Trade" shall mean any act, occupation or calling of habitually
direct to the general public merchandise, commodities or goods for
but the restriction of this law shall not apply to the following:
Sales by a manufacturer, processor, laborer, or worker, to the general
public the products manufactured, processed or produced by him if his
does not exceed One Hundred Thousand Pesos (P100,000.00);
(b) Sales by
farmer or agriculturist selling the products of his farm;
restaurant operations by a hotel owner or inn-keeper irrespective of
amount of capital: Provided, that the restaurant is incidental
the hotel business; and
are limited only to products manufactured, processed or assembled by a
manufacturer through a single outlet, irrespective of capitalization.
"High-end or luxury goods" shall refer to goods which are
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
wearing apparel, leisure and sporting goods, electronics and other
Sec. 4. Treatment
of Natural-Born Citizen Who Has Lost His Philippine
- A natural-born citizen of the Philippines who has lost his
citizenship but who resides in the Philippines shall be granted the
rights as Filipino citizens for purposes of this Act.
Sec. 5. Foreign
Equity Participation. - Foreign-owned partnerships, associations
corporations formed and organized under the laws of the Philippines
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
business, subject to the following categories:
A - Enterprises with paid-up capital of
equivalent in Philippine Pesos of less than Two Million Five Hundred
US Dollars (US$2,500,000.00) shall be reserved exclusively for Filipino
citizens and corporations wholly-owned by Filipino citizens.
- Enterprises with a minimum paid-up capital of the equivalent in
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
the effectivity of this Act wherein foreign participation shall be
to not more than (60%) of total equity.
- Enterprises with a paid-up capital of the equivalent in Philippine
of Seven Million Five Hundred Thousand US Dollars (US$7,500,000.00) or
more maybe wholly owned by foreigners: Provided, however, that
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).
- Enterprises specializing in high-end or luxury products with a paid
capital of the equivalent in Philippine Pesos of Two Hundred Fifty
US Dollars (US$250,000.00) per store may be wholly-owned by foreigners.
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
its capital and cease operations in the Philippines. The actual use in
Philippine operations of the inwardly remitted minimum capital
shall be monitored by the SEC.
stores shall secure a certification from the Bangko Sentral ng
(BSP) and the DTI, which will verify or confirm inward remittance of
minimum required capital investment.
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
of Two Million Five Hundred Thousand US Dollars (US$2,500,000.00) may
only up to a minimum of sixty percent (60%) of the equity thereof
the first two (2) years from the effectivity of this Act and
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
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
within eight (8) years from their start of operations.
Sec. 8. Qualifications
of Foreign Retailers. - No foreign retailer shall be allowed to
in retail trade in the Philippines unless all the following
A minimum of Two Hundred Million US Dollars (US$200,000,000.00) net
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
(5) retailing branches or franchises in operation anywhere around the
unless such retailers has at least one (1) store capitalized at a
of Twenty-Five Million US Dollars (US$25,000,000.00);
(5)-year track record in retailing; and
nationals from, or judicial entities formed or incorporated in,
which allow the entry of Filipino retailers, shall be allowed to engage
in retail trade in the Philippines.
DTI is hereby authorized to pre-qualify all foreign retailers, subject
to the provisions of this Act, before they are allowed to conduct
in the Philippines.
The DTI shall keep
a record of qualified foreign retailers who may, upon compliance with
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
Committee on Tariff and Related Matters of the National Economic
Authority (NEDA) Board shall formulate and regularly update a list of
retailers of high-end or luxury goods and render an annual report on
same to Congress.
Sec. 9. Promotional
of Locally Manufactured Products. - For ten
years after the effectivity of this Act, at least thirty percent (30%)
of the aggregate cost of the stock inventory of foreign retailers
under Categories B and C and ten percent (10%) for Category D, shall be
made in the Philippines.
Prohibited Activities of Qualified Foreign Retailers. -
foreign retailers shall not be allowed to engage in certain retailing
outside their accredited stores through the use of mobile or rolling
or carts, the use of sales representatives, door-to-door selling,
and sari-sari stores and such other similar retailing activities: Provided,
that a detailed list of prohibited activities shall hereafter
by the DTI.
Implementing Agency; Rules and Regulations. - The
regulation of foreign sole proprietorships, partnerships, associations
or corporations allowed to engage in retail trade shall be the
of the DTI. This shall include resolution of conflicts.
The DTI, in
coordination with the SEC, the NEDA and the BSP, shall formulate and
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
of any provision of this Act shall be punished by imprisonment of not
than six (6) years and one (1) day but not more than eight (8) years,
a fine of not less than One Million Pesos (P1,000,000.00) but not more
than Twenty Million Pesos (P20,000,000.00).
the case of associations, partnerships or corporations, the penalty
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
of sentence. If the Filipino offender is a public officer or
he shall, in addition to the penalty prescribed herein, suffer
and permanent disqualification from public office.
Sec. 13. Repealing
Clause. - Republic Act No. 1180, as amended, is hereby
Republic Act No. 3018, as amended, and all other laws, executive
rules and regulations or parts thereof inconsistent with this Act are
or modified accordingly.
Separability Clause. - If any provision of this Act shall
unconstitutional, the other provisions not otherwise affected thereby
remain in force and effect.
Effectivity. - This Act shall take effect fifteen (15)
its approval and publication in at least two (2) newspapers of general
circulation in the Philippines.
B. VILLAR, JR.
of the House of Representatives
of the Senate
which is a consolidation of Senate Bill No. 153 and House Bill No.
was finally passed by the Senate and House of Representatives on
of the Philippines