Opening up the economy

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How do we promote a more attractive investment climate in the country? For starters, we could remove barriers to foreign investors’ entry in the country’s retail trade.

That’s the main objective of Senate Bill 1639, which seeks to remove existing equity and capitalization requirements under the existing retail trade liberalization law. The measure wants to stimulate market competition, create more jobs and offer lower prices for quality goods.

The Retail Trade Liberalization Act of 2000 requires a minimum paid-up capital of $2.5 million for a 100-percent foreign ownership of a retail business. But since then, a scant 22 foreign retail firms have invested in the retail sector. By comparison, Singapore and Indonesia impose no minimum capital requirements or limits on foreign equity participation in the retail-trade sector.

It is true that such requirements, as well as other restrictive provisions in the 1987 Constitution, have made us lag far behind our neighbors in attracting foreign direct investments. We should now take bold steps in sustaining the momentum of our economic growth, starting with the passage of bills such as this.

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