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Small foreign retailers rampant in PH, says PRA

A local business group asked the national government and local government units to check the entry and operation of small foreign retailers in the Philippines to make sure these establishments comply with the law.

Philippine Retailers Association chairman Paul Santos said foreign or migrant retailers were unaccounted for and were unfairly competing with local retailers and other legitimate establishments.

“The government should ensure they comply and meet the requirements of the law because these businesses are stifling Filipino entrepreneurs who cannot compete against their well-established supply chain where they can source cheaper supplies,” Santos said at the sidelines of the  26th National Retail Conference and Stores Asia Expo 2019.

“We want DTI [Department of Trade and Industry] and the LGUs to impose the law because the small and medium retailing is reserved for Filipinos,” he said.

The current scenario and the industry’s huge base only allows slight growth for domestic retailing that has been performing with an annual growth of only 2 percent to 4 percent.

Santos said that while some foreign retailers might have secured the required permits from the LGUs, their operations were different from what they declared on paper.

He said the LGUs might be turning a blind eye because these businesses were contributing to the earnings of the LGUs.

Santos said only establishments that conspicuously violated the rules on sanitation, signages, among others were shut down by the LGUs, although most small foreign retailers were violating the Retail Trade Liberalization Act of 2000.

He said there was an influx of foreign SME retailers even if the government had not yet liberalized domestic retailing by amending the Retail Trade Liberalization Act.

A proposed bill seeks to reduce the minimum paid-up capital requirement of foreign firms engaging in retail trade to $200,000 from $2.5 million at present.

Santos said he was anticipating the re-filing of the proposed measure which was passed by the House of Representatives but was thumbed down by the Senate in the previous Congress. 

The bill aims to attract more foreign direct investments into the country.

Santos said that while the further liberalization of the industry would not hurt the big retailers, it would adversely impact on the small and medium ones.

He said while small retailers were entering the Philippines, only a few big foreign retailers were investing in the country.

Santos said these big foreign retailers opposed the required investment per store of $800,000, the 30-percent local content and the IPO requirement after 7 to 8 years of operation in the country. 

Topics: Small foreign retailers , Philippine Retailers Association , PRA , Department of Trade and Industry , DTI , Retail Trade Liberalization Act of 2000
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