RETAIL TRADE

LIBERALIZATION ACT 2000

R.A. No. 8762 (RTLA2000)

MELINDA ROSE R. FERNANDEZ

RTLA 2000
 Repealed RA 1180

 Signed into law on 07 March 2000

 Liberalized the Philippine retail industry to

encourage Filipino and foreign investors
have an efficient and competitive retail
sector; and

 Empower the Filipino consumers

Declaration of Policy
 To promote consumer welfare in
attracting promoting and welcoming
productive investment
 Bring down price for the Filipino Consumer
 Create more jobs, promote tourism
 Assist small manufacturers
 Stimulate economic growth
 Enable Philippine goods and services to become
globally competitive
Declaration of Policy
 Philippine Retail Industry- liberalized to
encourage Filipino and competitive retail
trade sector in the interest of
empowering the Filipino consumer
 Lower prices
 Higher quality goods
 Better services
 Wider choices
 Definition and Coverage of
“Retail Trade”
* Any act, occupation or calling of habitually
selling direct to the general public
merchandise, commodities or goods for
consumption
Elements:
a. Habitual act or business of selling;
b. Direct to the “general public;”
c. Of “merchandise, commodities or goods for
consumption.”
RETAIL TRADE
 Consumption
 Not the character of the business
conducted by either seller or buyer that
matters; it is rather, whether the
purchaser uses or consumes the goods or
whether he resells the same or passes
them on ultimate consumer
 Exempted Transactions

 Sales by a manufacturer, processor,

laborer, or worker, to the general public
of the products manufactured, processed
or produced by him if his capital does not
exceed P100, 000.00
 Sales by a farmer or agriculturist, of the
products of his farm, regardless of the
capital

 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
 Sales to the general public, through a
single outlet owned by a manufacturer of
products manufactured, processed or
assembled in the Philippines, irrespective
of capitalization
 Sales to industrial and commercial users
or consumers who use the products
bought by them to render service to the
general public and/or produce or
manufacture of goods which are in turn
sold by them.
Special Exemption for Former
Natural-Born Filipinos

 A natural-born citizen of the Philippines

who has lost his Philippine citizenship
shall be granted the same rights as Filipino
citizens for purposes of this Act.
Categories of Retail Trade
Enterprises

 Category A – Enterprises with paid-up

capital of the equivalent of less than US $
2, 500, 000

 Category B – Enterprises with a

minimum paid-up capital of the equivalent
in Philippine Pesos US$2,500,000.00 but
less US$7,500,000.00
 Category C- Enterprises with a paid-up
capital of the equivalent in Philippine
Pesos US$7,500,000.00 or more may be
wholly owned by foreigners, provided that
in no case shall the investments for
establishing a store be less than the peso
equivalent of 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 US$250,000.00 per store
Foreign Retailers
 Prequalification Requirements

a. A minimum of Net Worth of

-US$200M of the registrant corporation
in Catergories B and C
-US$50M of the registrant corporation
in Catergory D
b. Five retailing branches or franchises, in
operation anywhere around the world
unless such retailer has at least one store,
capitalized at a minimum of US$25M;

c. Five- year track record in retailing;

d. They must be nationals, or juridical
entities formed or incorporated in,
countries in which allow the entry of
Filipino retailers
Application for Prequalification
 A request duly signed and acknowledged
under oath by an authorize officer of the
foreign retailer

 Must be submitted to the Board of

Investments before filing a formal
application

 Must be accompanied by a certification

from the home-country or local embassy
Prohibited Activities of Qualified
Foreign Retailers

 Not allowed to engage in certain retailing

activities outside their accredited stores
Penalty Clause
a. Imprisonment of not less than 6 years and
one day but not more than 8 years;

b. Fine not less than P1,000,000.00 but not

more than P20, 000, 000.00

• Offender not a citizen-DEPORTED

• public officer or employee-dismissal and
permanent disqualification from public office.
Implementing Agency

DTI- monitoring and regulation

SEC, NEDA, BSP- issuance of IRR
Questions
Union Carbide was a manufacturer having
two divisions the Consumer Products
Division and the Industrial Products
Division.

W/N the Industrial Products Division is

engaged in retail business
Answer
NO. Retail pertains to direct selling to the
general public of merchandise of goods for
consumption. They pertain to goods for
personal, family and household consumption.
The products sold under this division are
clearly not covered by the term
consumption goods. They are sold to
manufacturers and industries as raw
materials. They are intermediate goods not
consumption goods.
Balmaceda v. Union Carbide Philippines, Inc.
124 SCRA 893
Questions
Goodyear, a corporation not wholly owned
by Filipinos, was engaged in the
manufacturing and sales of rubber
products such as tires, batteries, conveyor
belts soles of shoes etc.

W/N Goodyear is covered by Retail Trade

Law insofar as the prohibition against
aliens from engaging in retail trade is
concerned.
Answer
NO. Retail pertains to direct selling to the
general public of merchandise of goods
for consumption. They pertain to goods
for personal, family and household
consumption. A manufacturer who sells
his products to industrial and commercial
users so that the latter may use the same
to render some general service to the
public is clearly not covered by the
provision.
Answer
But insofar as sale to employees and
officers is concerned this may be
considered retail and comes under this
prohibition

Goodyear Tire v. Reyes, Sr. 123 SCRA 273

Source
 Law on Sales by Villanueva (2009)
 RA 8762