Government plans to lower the paid-up capital requirement for foreign retailers — to $200,000 from $2.5 million — have been criticized by the Philippine Chamber of Commerce and Industry (PCCI).
“The best is we stick to that [$ 2.5 million]. We need a baseline. The baseline is in both Europe and America. For small, it’s $ 2.5 million and that is small already for them,” PCCI President George T. Barcelon said during a press conference for the upcoming 43rd Philippine Business Conference.
“[W]e do want to attract investments but let’s be prudent in the sense that we need to attract legitimate companies with substantial capital to come in,” he added.
Socioeconomic Planning Secretary Ernesto Penia earlier this week said that that lowering the minimum capital for foreign retailers would attract investors and force domestic companies to become more competitive.
This would be done via changes to the Foreign Investment Negative List, which identifies economic activities that are closed to foreign investors or where restrictions have been set on foreign ownership by the 1987 Constitution or other laws.
A review of current list, which was released in 2015 by the previous administration, was implemented in May.
Philippine Exporters Confederation, Inc. President and PCCI Honorary Chairman Sergio R. Ortiz-Luis Jr. said the move would particularly affect the small and medium enterprises.
“The $ 200,000 entry from abroad … [will see]micro and small retailers … coming here and probably even borrow their money here and crowd out our SMEs,” Ortiz-Luis said.
“You [should instead]try to attract investors because of the investments they are bringing, the technology they are bringing,” he added.
“ What can you expect from these micro and medium enterprises in terms of technology and capital? … It’s difficult enough that our SMEs have problems in their credit, have problems in their location.