March 7, 2000

REPUBLIC ACT NO. 8762

AN ACT LIBERALIZING THE RETAIL TRADE BUSINESS, REPEALING FOR

THE PURPOSE REPUBLIC ACT NO. 1180, AS AMENDED, AND FOR OTHER
PURPOSES

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 investments that will bring down prices 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 foreign investors to forge an efficient
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. Definition. — 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 goods for consumption, but the restrictions
of this law shall not apply to the following:

(a) Sales by a manufacturer, processor, laborer, or

worker, to the general public the products
manufactured, processed or produced by him if his
capital does not exceed One hundred thousand pesos
(P100,000.00);
(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 of 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
manufacturer through a single outlet, irrespective of
capitalization.
(2) "High-end or luxury goods" shall refer to goods which are
not necessary for life maintenance and whose demand is
generated in large part by the higher income groups. Luxury
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 goods shall include, but are not limited to, products such as:
jewelry, branded or designer clothing and footwear, wearing
apparel, leisure and sporting goods, electronics and other
personal effects.cdtai

SECTION 4. Treatment of Natural-Born Citizen Who Has Lost His

Philippine Citizenship. — A natural-born citizen of the Philippines who has
lost his Philippine citizenship but who resides in the Philippines shall be
granted the same rights as Filipino citizens for purposes of this Act.
SECTION 5. Foreign Equity Participation . — Foreign-owned
partnerships, associations and corporations formed and organized under the
laws of the Philippines may, upon registration with the Securities and
Exchange Commission (SEC) and the Department of Trade and Industry
(DTI), or in case of foreign-owned single proprietorships, with the DTI,
engage or invest in the retail trade business, subject to the following
categories:
Category A — Enterprises with paid-up capital of the equivalent in
Philippine Pesos of less than Two million five hundred thousand US dollars
(US$2,500,000.00) shall be reserved exclusively for Filipino citizens and
corporations wholly owned by Filipino citizens.
Category B — Enterprises with a minimum paid-up capital of the
equivalent in Philippine Pesos of Two million five hundred thousand US
dollars (US$2,500,000.00) but less than Seven million five hundred thousand
US dollars (US$7,500,000.00) may be wholly owned by foreigners except for
the first two (2) years after the effectivity of this Act wherein foreign
participation shall be limited to not more than sixty percent (60%) of total
equity.
Category C — Enterprises with a paid-up capital of the equivalent in
Philippine Pesos of Seven million five hundred thousand US dollars
(US$7,500,000.00) or more may be wholly owned by foreigners: Provided,
however, That in no case shall the investments for establishing a store in
Categories B and C be less than the equivalent in Philippine Pesos of Eight
hundred thirty thousand US dollars (US$830,000.00).
Category D — Enterprises specializing in high-end or luxury products
with a paid-up capital of the equivalent in Philippine Pesos of Two hundred
fifty thousand US dollars (US$250,000.00) per store may be wholly owned by
foreigners.
The foreign investor shall be required to maintain in the Philippines the
full amount of the prescribed minimum capital, unless the foreign investor
has notified the SEC and the DTI of its intention to repatriate its capital and
cease operations in the Philippines. The actual use in Philippine operations of
the inwardly remitted minimum capital requirement shall be monitored by
the SEC.
Failure to maintain the full amount of the prescribed minimum capital
prior to notification of the SEC and the DTI, shall subject the foreign investor
to penalties or restrictions on any future trading activities/business in the
Philippines.
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 Foreign retail stores shall secure a certification from the Bangko
Sentral ng Pilipinas (BSP) and the DTI, which will verify or confirm inward
remittance of the minimum required capital investment.
SECTION 6. Foreign Investors Acquiring Shares of Stock of Local
Retailers. — Foreign investors acquiring shares from existing retail stores
whether or not publicly listed whose net worth is in excess of the peso
equivalent of Two million five hundred thousand US dollars
(US$2,500,000.00) may purchase only up to a maximum of sixty percent
(60%) of the equity thereof within the first two (2) years from the effectivity
of this Act and thereafter, they may acquire the remaining percentage
consistent with the allowable foreign participation as herein provided.
SECTION 7. Public Offering of Shares of Stock. — All retail trade
enterprises under Categories B and C in which foreign ownership exceeds
eighty percent (80%) of equity shall offer a minimum of thirty percent (30%)
of their equity to the public through any stock exchange in the Philippines
within eight (8) years from their start of operations.
SECTION 8. Qualifications of Foreign Retailers . — No foreign retailer
shall be allowed to engage in retail trade in the Philippines unless all the
following qualifications are met:
(a) A minimum of Two hundred million US dollars
(US$200,000,000.00) net worth in its parent corporation for
Categories B and C, and Fifty million US dollars
(US$50,000,000.00) net worth in its parent corporation for
Category D;
(b) Five (5) retailing branches or franchises in operation
anywhere around the world unless such retailer has at least
one (1) store capitalized at a minimum of Twenty-five million
US dollars (US$25,000,000.00);
(c) Five (5)-year track record in retailing; and
(d) Only nationals from, or juridical entities formed or
incorporated in countries which allow the entry of Filipino
retailers shall be allowed to engage in retail trade in the
Philippines.
The DTI is hereby authorized to pre-qualify all foreign retailers, subject
to the provisions of this Act, before they are allowed to conduct business in
the Philippines.
The DTI shall keep a record of qualified foreign retailers who may, upon
compliance with law, establish retail stores in the Philippines. It shall ensure
that the parent retail trading company of the foreign investor complies with
the qualifications on capitalization and track record prescribed in this
section.
The Inter-Agency Committee on Tariff and Related Matters of the
National Economic and Development Authority (NEDA) Board shall formulate
and regularly update a list of foreign retailers of high-end or luxury goods
and render an annual report on the same to Congress.
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 SECTION 9. Promotion of Locally Manufactured Products. — For ten
(10) years after the effectivity of this Act, at least thirty percent (30%) of the
aggregate cost of the stock inventory of foreign retailers falling under
Categories B and C and ten percent (10%) for Category D shall be made in
the Philippines.
SECTION 10. Prohibited Activities of Qualified Foreign Retailers . —
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.
SECTION 11. Implementing Agency; Rules and Regulations . — 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. This shall include 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 ninety (90) days after its approval. Cdpr

SECTION 12. Penalty Clause. — Any person who shall be found

guilty of violation of any provision of this Act shall be punished by
imprisonment of not less than six (6) years and one (1) day but not more
than eight (8) years, and a fine of not less than One million pesos
(P1,000,000.00) but not more than Twenty million pesos (P20,000,000.00).
In the case of associations, partnerships or corporations, the penalty shall be
imposed upon its partners, president, directors, manager 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 herein, suffer dismissal and permanent disqualification from
public office.
SECTION 13. Repealing Clause . — 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 14. Separability Clause. — If any provisions of this Act

shall be held unconstitutional, the other provisions not otherwise affected
thereby shall remain in force and effect.
SECTION 15. Effectivity. — This Act shall take effect fifteen (15)
days after its approval and publication in at least two (2) newspapers of
general circulation in the Philippines.cdasia

Approved: March 7, 2000

Published in The Manila Times and Malaya on March 10, 2000.
Published in the Official Gazette, Vol. 96 No. 24, page 3695 on June 12,
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 2000.

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