Retail Trade Liberalization Act of 2000

Section 1

This Act shall be known as the "Retail Trade Liberalization Act of 2000."

Section 2

It is the policy of the State to promote consumer welfare in attracting, promoting and welcoming productive investment that will bring down price 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 competitive retail trade sector in the interest of empowering the Filipino consumer through lower prices, higher quality goods, better services and wider choices.

Section 3

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 good for consumption, but the restriction of this law shall not apply to the following: (a) Sales by manufacturer, processor, laborer, or worker, to the general public the products manufactured, processed or products by him if his capital dose not exceed One hundred thousand pesos(100,000.00); (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 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 manufactured, processed or assembled by a manufacturer though a single outlet, irrespective of capitalization. (2) "Minimum investment per store” shall include the value of the gross assets, tangible or intangible, including but not limited to buildings, leaseholds, furniture, equipment, inventory, and common use investments and facilities such as administrative offices, warehouses, preparation or storage facilities, as reflected in the financial statements following the accounting standards adopted by the Securities and Exchange Commission (SEC) or the Department of Trade and Industry (DTI), whichever is applicable, shall be prorated among the number of stores being served. The paid-up capital may be used to purchase assets for purpose of complying with the investment requirement per store. (As amended by RA No 11595)

Section 4

A natural-born citizen of the Philippines who resides in the Philippines shall be granted the same rights as Filipino citizens for purposes of this Act.

Section 5

Foreign-owned partnerships, associations, and corporations may, upon registration with the Securities and Exchange Commission (SEC), or in case of foreign-owned single proprietorships, upon registration with the Department of Trade and Industry (DTI), engage or invest in the retail trade business, under the following conditions: (a) A foreign retailer shall have a minimum paid-up capital of Twenty-five million pesos (P25,000,000.00); (b) The foreign retailer’s country of origin does not prohibit the entry of Filipino retailers; and (c) In the case of foreign retailers engaged in retail trade through more than one (1) physical store, the minimum investment per store must be at least Ten million pesos (P10,000,000.00): Provided, That this requirement shall not apply to foreign investors and foreign retailers who are legitimately engaged in retail trade and were not required to comply with the minimum investment per store at the time of the effectivity of this Act: Provided, further, That proof of qualification to engage in retail trade under Republic Act No. 8762 and its implementing rules and regulations is submitted to the DTI.” The foreign retailer shall be required to maintain in the Philippines at all times the paid-up capital of Twenty-five million pesos (P25,000,000.00), unless the foreign retailer has notified the SEC or the DTI, whichever is appropriate, of its intention to repatriate its capital and cease operations in the Philippines. The actual use in Philippine operations of the minimum paid-up capital shall be monitored by the SEC, or by the DTI, whichever is appropriate. Failure to maintain in the Philippines the paid-up capital required in the preceding paragraph, prior to notification of the SEC or the DTI, whichever is appropriate, shall subject the foreign retailer to penalties or restrictions on any future trading activities/business in the Philippines. For purposes of registration with the SEC or DTI, the foreign retailer shall submit a certification from the Bangko Sentral ng Pilipinas (BSP) of the inward remittance of its capital investment, or in lieu thereof, such other proof certifying that is capital investment is deposited and maintained in a bank in the Philippines. (As amended by RA No 11595)

Section 6

The DTI, SEC, and the National Economic and Development Authority (NEDA) shall review the required minimum paid-up capital every three (3) years from the effectivity of this Act. The DTI, SEC, and NEDA shall each report its recommendation to Congress. (As amended by RA No 11595)

Section 7

In all cases, the employment of foreign nationals by foreign retailers shall comply with the applicable provisions of the Labor Code on the determination of nonavailability of a competent, able and willing Filipino citizen before engaging the services of a foreign national, with due regard to the State policy under the Constitution to promote the preferential use of Filipino labor. (As amended by RA No 11595)

Section 8

(As deleted by RA No 11595)

Section 8

Foreign retailers are encouraged to have a stock inventory of products which are made in the Philippines. (As inserted by RA No 11595)

Section 9

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. [10] (As renumbered by RA No 11595)

Section 9

(As deleted by RA No 11595)

Section 10

The monitoring and regulation of foreign retailers allowed to engage in retail trade in the Philippines shall be the responsibility of the SEC, with respect to partnerships, associations, and corporations, or of the DTI, with respect to single proprietorships. Both agencies shall keep a record of the entities engaged in retail trade in the Philippines that are registered with them. Within ninety (90) days after the approval of this Act, the DTI, in coordination with the SEC and NEDA, shall formulate and issue the implementing rules and regulations necessary for the implementation of this Act. (As renumbered and amended by RA No 11595)

Section 11

Violation of any of the provisions of this Act shall be punishable by imprisonment of not less than four (4) years to six (6) years and a fine of not less than One million pesos (P1,000,000.00) but not more than Five million pesos (P5,000,000.00). In the case of partnerships, associations, or corporations, the penalty shall be imposed upon its partners, president, directors, general manager, and other officers responsible for the violation. If the offender is not a citizen of the Philippines, he or she shall be deported immediately after service of sentence. If the Filipino offender is a public officer or employee, he or she shall, in addition to the penalty prescribed herein, suffer dismissal and permanent disqualification from public office. (As renumbered and amended by RA No 11595)

Section 12

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.

Section 13

If any provisions of this Act shall be held unconstitutional, the other provisions not otherwise affected thereby shall remain in force and effect.

Section 14

This act shall take effect fifteen (150 days after its approval and publication in at least two (2) newspapers of general circulation in the Philippines. Approved: March 07, 2000