Question & AnswerQ&A (Republic Act No. 8762)
The official title is the "Retail Trade Liberalization Act of 2000."
The policy is to promote consumer welfare by attracting investments that lower prices, create jobs, promote tourism, assist small manufacturers, stimulate economic growth, and enable Philippine goods and services to be globally competitive through liberalization of the retail trade sector.
Retail trade means any act or occupation of habitually selling directly to the general public merchandise or goods for consumption, but excludes certain sales such as those by small manufacturers with capital not exceeding P100,000, farmers selling farm products, restaurant sales incidental to hotels, and sales of products by manufacturers through a single outlet regardless of capitalization.
There are categories: Category A (less than US$2.5 million) reserved for Filipinos; Category B (US$2.5M to less than US$7.5M) allows foreign ownership up to 60% for first 2 years then 100%; Category C (US$7.5M or more) allows full foreign ownership; Category D covers high-end or luxury goods stores with at least US$250,000 capital per store, fully foreign owned.
Yes, natural-born Filipino citizens who lost their Philippine citizenship but reside in the Philippines are granted the same rights as Filipino citizens for purposes of this Act.
Violators face imprisonment of six years and one day to eight years, and a fine ranging from One million to Twenty million pesos. For corporations, penalties apply to responsible officers. Foreign offenders may be deported after sentence. Filipino public officers shall be dismissed and disqualified permanently from public office.
They must have a minimum net worth of US$200 million (Categories B and C) or US$50 million (Category D) in their parent corporation; five retail branches or franchises worldwide or one store with at least US$25 million capital; a five-year track record in retailing; and must be from countries that allow Filipino retailers in return.
DTI monitors and regulates foreign sole proprietorships, partnerships, corporations; resolves conflicts; pre-qualifies foreign retailers; issues implementing rules and regulations; and ensures compliance with the law alongside SEC, NEDA, and BSP.
Qualified foreign retailers cannot engage in mobile or rolling stores, sales representatives, door-to-door selling, restaurants, sari-sari stores, and other similar retail activities outside their accredited stores.
For ten years, Categories B and C must have at least 30% of their stock inventory cost made in the Philippines; Category D must have at least 10%.