RETAIL TRADE LIBERALIZATION ACT OF 2000
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RETAIL TRADE LIBERALIZATION ACT OF 2000
Republic Act No. 8762
March 7, 2000
Case Overview and Summary
REPUBLIC ACT NO. 8762 - RETAIL TRADE LIBERALIZATION ACT OF 2000Declaration of Policy (Section 2):
- Promote consumer welfare by attracting productive investments that will bring down prices, create 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.
- Empower the Filipino consumer through lower prices, higher quality goods, better services, and wider choices.
Definition of Retail Trade (Section 3):
- Habitually selling directly to the general public merchandise, commodities, or goods for consumption.
- Exclusions:
- Sales by manufacturers, processors, laborers, or workers of their own products with capital not exceeding ₱100,000.
- Sales by farmers or agriculturists of their farm products.
- Restaurant operations by hotel owners or innkeepers, provided it is incidental to the hotel business.
- Sales limited to products manufactured, processed, or assembled by a manufacturer through a single outlet, regardless of capitalization.
Definition of High-end or Luxury Goods (Section 3):
- Goods not necessary for life maintenance and whose demand is generated largely by higher income groups, including jewelry, branded or designer clothing and footwear, wearing apparel, leisure and sporting goods, electronics, and other personal effects.
Treatment of Natural Born Filipino Citizens (Section 4):
- Natural-born Filipino citizens residing in the Philippines shall be granted the same rights as Filipino citizens for purposes of this Act.
Foreign Equity Participation (Section 5):
- Category A: Enterprises with paid-up capital less than US$2,500,000 shall be reserved exclusively for Filipino citizens and corporations wholly owned by Filipino citizens.
- Category B: Enterprises with paid-up capital of US$2,500,000 to less than US$7,500,000 may be wholly owned by foreigners, except for the first two 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 paid-up capital of US$7,500,000 or more may be wholly owned by foreigners.
- Category D: Enterprises specializing in high-end or luxury products with a paid-up capital of US$250,000 per store may be wholly owned by foreigners.
- The foreign investor shall maintain the full amount of the prescribed minimum capital in the Philippines unless notifying the SEC and DTI of intention to repatriate capital and cease operations.
- Foreign retail stores shall secure certification from the Bangko Sentral ng Pilipinas (BSP) and the DTI, confirming inward remittance of the minimum required capital investments.
Foreign Investors Acquiring Shares of Local Retailers (Section 6):
- Foreign investors acquiring shares from existing retail stores with net worth exceeding US$2,500,000 may purchase only up to 60% of the equity within the first two years from the effectivity of this Act and thereafter, they may acquire the remaining percentage consistent with the allowable foreign participation.
Public Offering of Shares of Stock (Section 7):
- All retail trade enterprises under Categories B and C in which foreign ownership exceeds 80% of equity shall offer a minimum of 30% of their equity to the public through any stock exchange in the Philippines within eight years from their start of operations.
Qualification of Foreign Retailers (Section 8):
- Minimum net worth of US$200,000,000 in the parent corporation for Categories B and C, and US$50,000,000 for Category D.
- At least five retailing branches or franchises in operation anywhere around the world, unless the retailer has at least one store capitalized at a minimum of US$25,000,000.
- Five-year track record in retailing.
- Only nationals from, or juridical entities formed or incorporated in countries that allow the entry of Filipino retailers shall be allowed to engage in retail trade in the Philippines.
- The DTI is authorized to pre-qualify all foreign retailers before they are allowed to conduct business in the Philippines.
- The DTI shall keep a record of qualified foreign retailers and ensure compliance with capitalization and track record requirements.
- The NEDA Board shall formulate and regularly update a list of foreign retailers of high-end or luxury goods and render an annual report to Congress.
Promotion of Locally Manufactured Products (Section 9):
- For ten years after the effectivity of this Act, at least 30% of the aggregate cost of the stock inventory of foreign retailers falling under Categories B and C, and 10% for Category D, shall be made in the Philippines.
Prohibited Activities of Qualified Foreign Retailers (Section 10):
- Qualified foreign retailers shall not be allowed to engage in certain retailing activities outside their accredited stores, such as mobile or rolling stores or carts, the use of sales representatives, door-to-door selling, restaurants, and sari-sari stores, and other similar retailing activities, as detailed by the DTI.
Implementing Agency and Rules and Regulations (Section 11):
- 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, including 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 90 days after its approval.
Penalty Clause (Section 12):
- Any person found guilty of violating any provision of this Act shall be punished by imprisonment of not less than two years and one day but not more than eight years, and a fine of not less than ₱1,000,000 but not more than ₱20,000,000.
- 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, suffer dismissal and permanent disqualification from public office.
Repealing Clause (Section 13):
- 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.
Separability Clause (Section 14):
- If any provision of this Act shall be held unconstitutional, the other provisions not otherwise affected thereby shall remain in force and effect.
Effectivity (Section 15):
- This Act shall take effect 15 days after its approval and publication in at least two newspapers of general circulation in the Philippines.
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foreign equity participation
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RETAIL TRADE LIBERALIZATION ACT OF 2000
Republic Act No. 8762
•March 7, 2000
REPUBLIC ACT NO. 8762
AN ACT LIBERALIZING THE RETAIL TRADE BUSINESS, REPEALING FOR THE PURPOSE REALING FOR THE PURPOSE REPUBLIC ACT NO. 1180, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines of Representatives of the Philippines in Congress assembled:
Section 1. Title – This Act shall be known as the "Retail Trade Liberalization Act of 2000."
Section 2. Declaration of Policy. – 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 empower the Filipino consumer through lower prices, higher quality goods, better services and wider choices.
Section 3. Definition. - As used in this...
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