RA 8762
AN ACT LIBERALIZING THE RETAIL TRADE
BUSINESS, REPEALING FOR THE PURPOSE
REALING FOR THE PURPOSE REPUBLIC
ACT NO. 1180, AS AMENDED, AND FOR
OTHER PURPOSES
Be it enacted by the Senate and House of
Representatives of the Philippines of
Representatives of the Philippines in Congress
assembled:
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
investment that will bring down price 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 competitive retail trade sector in the
interest of empower 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 good for
consumption, but the restriction of this
law shall not apply to the following:
(a) Sales by manufacturer,
processor, laborer, or worker, to
the general public the products
manufactured, processed or
products by him if his capital
dose not exceed One hundred
thousand pesos(100,000.00);
(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 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
manufactured, processed or
assembled by a manufacturer
though 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 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.
Section 4. Treatment of Natural Born Citizen
Who Has Lost His Philippine Citizenship. - A
natural-born citizen of the Philippines 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
corporation 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 Peso of the 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 dollar
(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 vestments 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.
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
investments.
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 the 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
Philippine within eight (8) years from their start
of operations.
Section 8. Qualification of Foreign Retailers. -
No foreign retailer shall be allowed to engage in
retail trade in the Philippine unless all the
following qualifications are met:
(a) A minimum of Two hundred million
US dollar (US$200,000,000.00) net
worth in its parent corporation for
Categories B and C, and Fifty million US
dollar (US$50,000,000.00) net worth in
its parent corporation for category D;
(b) (5) retailing branches or franchises in
operation anywhere around the word
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 Philippine.
The DTI shall keep a record of Qualified foreign
retailers who may, upon compliance with law,
establish retail stores in the Philippine. It shall
ensure that 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 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.
Section 9. Promotion of Locally Manufactured
Products. - For ten (10) year 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: Rule 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 regulation necessary
to implement this Act within ninety (90) days
after its approval.
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 that six (2) 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 that 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 of fender 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 (150 days after its approval and
publication in at least two (2) newspapers of
general circulation in the Philippines.
Approved: March 07, 2000
(SGD.) JOSEPH E. ESTRADA
President of the Philippines
PRESIDENTIAL DECREE No. 715 May 28,
1975
AMENDING COMMONWEALTH ACT NO. 108,
AS AMENDED, OTHERWISE KNOWN AS
"THE ANTI-DUMMY LAW"
WHEREAS, there have been conflicting
interpretations as to whether Sec. 2-A of
Commonwealth Act No. 108, as amended,
otherwise known as the Anti-Dummy Law,
allows aliens to become members of the board
of directors or governing body of corporations or
associations engaging in partially nationalized
activities;
WHEREAS, it is fair and equitable and in line
with the constitutional policy expressed in Article
XIV, Sec. 5 of the Constitution, that foreign
investors be allowed limited representation in
the governing board or body of corporations or
associations in proportion to their allowable
participation in the equity of the said entities;
NOW, THEREFORE, I, FERDINAND E.
MARCOS, President of the Philippines, by virtue
of the powers vested in me by the Constitution,
do hereby order and decree:
Section 1. Sec. 2-A of Commonwealth Act No.
108, as amended, is hereby further amended to
read as follows:
"Sec. 2-A. Any person, corporation, or
association, which, having in its name or under
its control, a right, franchise, privilege, property
or business, the exercise or enjoyment of which
is expressly reserved by the Constitution or the
laws to citizens of the Philippines or of any other
specific country, or to corporations or
associations at least sixty per centum of the
capital of which is owned by such citizens,
permits or allows the use, exploitation or
enjoyment thereof by a person, corporation or
association not possessing the requisites
prescribed by the Constitution or the laws of the
Philippines; or leases, or in any other way,
transfers or conveys said right, franchise,
privilege, property or business to a person,
corporation or association not otherwise
qualified under the Constitution, or the
provisions of the existing laws; or in any manner
permits or allows any person, not possessing
the qualifications required by the Constitution, or
existing laws to acquire, use, exploit or enjoy a
right, franchise, privilege, property or business,
the exercise and enjoyment of which are
expressly reserved by the Constitution or
existing laws to citizens of the Philippines or of
any other specific country, to intervene in the
management, operation, administration or
control thereof, whether as an officer, employee
or laborer therein with or without remuneration
except technical personnel whose employment
may be specifically authorized by the Secretary
of Justice, and any person who knowingly aids,
assists, or abets in the planning, consummation
or perpetration of any of the acts herein above
enumerated shall be punished by imprisonment
for not less than five nor more than fifteen years
and by a fine of not less than the value of the
right, franchise or privilege enjoyed or acquired
in violation of the provisions hereof but in no
case less than five thousand pesos: Provided,
however, that the president, managers or
persons in violating the provisions of this section
shall be criminally liable in lieu thereof: Provided,
further, That any person, corporation or
association shall, in addition to the penalty
imposed herein, forfeit such right, franchise,
privilege and the property provisions of this Act;
and Provided, finally, That the election of aliens
as members of the board of directors or
governing body of corporations or associations
engaging in partially nationalized activities shall
be allowed in proportion to their allowable
participation or share in the capital of such
entities.
Sec. 2. This Decree shall take effect
immediately.
DONE in the City of Manila, this 28th day of
May, in the year of Our Lord, nineteen hundred
and seventy-five.
_______________________
COMMONWEALTH ACT No. 108
AN ACT TO PUNISH ACTS OF EVASION OF
THE LAWS ON THE NATIONALIZATION OF
CERTAIN RIGHTS, FRANCHISES OR
PRIVILEGES
Be it enacted by the National Assembly of the
Philippines
Section 1. Penalty — In all cases in which any
constitutional or legal provisions requires
Philippine or any other specific citizenship as a
requisite for the exercise or enjoyment of a right,
franchise or privilege, any citizen of the
Philippines or of any other specific country who
allows his name or citizenship to be used for the
purpose of evading such provision, and any
alien or foreigner profiting thereby, shall be
punished by imprisonment for not less than five
nor more than fifteen years, and by a fine of not
less than the value of the right franchise or
privilege, which is enjoyed or acquired in
violation of the provisions hereof but in no case
less than five thousand pesos.
The fact that the citizen of the Philippines or of
any specific country charged with a violation of
this Act had, at the time of the acquisition of his
holdings in the corporations or associations
referred to in section two of this Act, no real or
personal property, credit or other assets the
value of which shall at least be equivalent to
said holdings, shall be evidence of a violation of
this Act.1
Section 2. Simulation of minimum capital
stock — In all cases in which a constitutional or
legal provision requires that, in order that a
corporation or association may exercise or enjoy
a right, franchise or privilege, not less than a
certain per centum of its capital must be owned
by citizens of the Philippines or of any other
specific country, it shall be unlawful to falsely
simulate the existence of such minimum stock or
capital as owned by such citizens, for the
purpose of evading said provision. The president
or managers and directors or trustees of
corporations or associations convicted of a
violation of this section shall be punished by
imprisonment of not less than five nor more than
fifteen years, and by a fine not less than the
value of the right, franchise or privilege, enjoyed
or acquired in violation of the provisions hereof
but in no case less than five thousand pesos.2
Section 2-A. Unlawful use, Exploitation or
enjoyment — Any person, corporation, or
association which, having in its name or under
its control, a right, franchise, privilege, property
or business, the exercise or enjoyment of which
is expressly reserved by the Constitution or the
laws to citizens of the Philippines or of any other
specific country, or to corporations or
associations at least sixty per centum of the
capital of which is owned by such citizens,
permits or allows the use, exploitation or
enjoyment thereof by a person, corporation or
association not possessing the requisites
prescribed by a the Constitution or the laws of
the Philippines; or leases, or in any other way,
transfers or conveys said right, franchise,
privilege, property or business to a person,
corporation or association not otherwise
qualified under the Constitution, or the
provisions of the existing laws; or in any manner
permits or allows any person, not possessing
the qualifications required by the Constitution, or
existing laws to acquire, use, exploit or enjoy a
right, franchise, privilege, property or business,
the exercise and enjoyment of which are
expressly reserved by the Constitution or
existing laws to citizens of the Philippines or of
any other specific country, to intervene in the
management, operation, administration or
control thereof, whether as an officer, employee
or laborer therein with or without remuneration
except technical personnel whose employment
may be specifically authorized by the Secretary
of Justice, and any person who knowingly aids,
assists or abets in the planning consummation
or perpetration of any of the acts herein above
enumerated shall be punished by imprisonment
for not less than five nor more than fifteen years
and by a fine of not less than the value of the
right, franchise or privilege enjoyed or acquired
in violation of the provisions hereof but in no
case less than five thousand pesos: Provided,
however, That the president, managers or
persons in charge of corporations, associations
or partnerships violating the provisions of this
section shall be criminally liable in lieu thereof:
Provided, further, That any person, corporation
or association shall, in addition to the penalty
imposed herein, forfeit such right, franchise,
privilege, and the property or business enjoyed
or acquired in violation of the provisions of this
Act: And provided, finally, That the election of
aliens as members of the board of directors or
governing body of corporations or associations
engaging in partially nationalized activities shall
be allowed in proportion to their allowable
participation or share in the capital of such
entities.3
Section 2-B. Any violation of the provisions of
this Act by the spouse of any public official, if
both live together, shall be cause for the
dismissal of such public official. 4itc@lawphil
Section 2-C. The exercise, possession or
control by a Filipino citizen having a common-
law relationship with an alien of a right, privilege,
property or business, the exercise or enjoyment
of which is expressly reserved by the
Constitution or the laws to citizens of the
Philippines, shall constitute a prima facie
evidence of violation of the provisions of Section
2-A hereof.5
Section 3. Any corporation or association
violating any of the provisions of this Act shall,
upon proper court proceedings, be dissolved.
Section 3-A. Reward to informer. — In case of
conviction under the provisions of this Act,
twenty-five per centum of any fine imposed shall
accrue to the benefit of the informer who
furnishes to the Government original information
leading to said conviction and who shall be
ascertained and named in the judgment of the
court. If the informer is a dummy, who shall
voluntarily take the initiative of reporting to the
proper authorities any violation of the provisions
of this Act and assist in the prosecution,
resulting in the conviction of any person or
corporation profiting thereby or involved therein,
he shall be entitled to the reward hereof in the
sum equivalent to twenty-five per centum of the
fine actually paid to or received by the
Government, and shall be exempted from the
penal liabilities provided for in this Act. 6
Section 4. This Act shall take effect upon its
approval.
itc-alf
Approved, October 30, 1936.
Footnotes
*As amended by RA 421, RA 134, RA 6084, and
PD 715.
1Words
in bold in the text above are
amendments introduced by RA 134, section 1,
approved June 14, 1947.
Statutory History of section 1:
Original text —
SEC. 1. In all cases in which any constitutional
or legal provision requires Philippine or [United
States] citizenship as requisite for the exercise
or enjoyment of a right, franchise or privilege,
any citizen of the Philippines or [the United
States] who allows his name or citizenship to be
used for the purpose of evading such provision,
and any alien or foreigner profiting thereby, shall
be punished by imprisonment for not less than
[two] nor more than [ten] years, and by, fine of
not less than [two thousand nor more than ten
thousand pesos.]
The fact that the citizen of the Philippines or of
[the United States] charged with, violation of this
Act had, at the time of acquisition of his holdings
in the corporations or association referred to in
section two of this Act, no real or personal
property, credit or other assets the value of
which shall at least be equivalent to said
holdings, shall be admissible as circumstantial
evidence of, violation of this act. (Ed. Note:
Words in brackets were deleted in RA
134, supra)
2Words in bold in the text above are
amendments introduced by RA 134, section 1,
approved June 14, 1947.
Statutory History of section 2:
Original text
SEC. 2. In all cases in which a constitutional or
legal provisions requires that, in order that a
corporation or association may exercise or enjoy
a right, franchise or privilege, not less than a
certain per centum of its capital must be owned
by citizens of the Philippines or [the United
States, or both.] It shall be unlawful to falsely
simulate the existence of such minimum of stock
or capital as owned by such citizens of the
Philippines [or the United States or both,] for the
purpose of evading said provision. The president
or managers and directors or trustees of
corporations or associations convicted of a
violation of this section shall be punished by
imprisonment [for] not less than [two] nor more
than [ten] years, and by a fine of not less than
[two thousand nor more than ten thousand
pesos.] (Ed. Note: Words in brackets were
deleted in RA 134, supra.)
3Words in bold in the text above are
amendments introduced by PD 715, section 1,
promulgated May 28, 1975.
Statutory History of section 2-A:
a) Original text — (inserted by CA 421)
SEC. 2-A. Any person, corporation or
association which, having in its name or under
its control, a right, franchise, privilege, property
or business, the exercise or enjoyment of which
is expressly reserved by the constitution or the
laws [of the Philippines] to citizens of the
Philippines or of [the United States,] or to
corporations or associations at least sixty per
centum of the capital of which is owned by such
citizens, permits or allows the use, exploitation
or enjoyment thereof by a person, corporation or
association not possessing the requisites
prescribed by the Constitution or the laws of the
Philippines; or leases, or in any other way
transfers or conveys said right, franchise,
privilege, property or business to a person,
corporation or association not otherwise
qualified under the Constitution, or the
provisions of the existing [Acts,] any person who
knowingly aids, assists, or abets in the planning,
consummation or perpetuation of any of the acts
herein above enumerated, shall be punished by
imprisonment for not less than [two] nor more
than [ten] years, and by a fine of not less than
[two thousand nor more than ten thousand
pesos:] Provided, however, That presidents,
managers, or persons in charge of corporations,
associations or partnerships violating the
provisions of this section shall be criminally
liable in lieu thereof. (Ed, Note: Words in
brackets were deleted in RA 134, infra.)
b) Words in bold in the next immediately
following are amendments introduced by RA
134, section 2, approved June 14, 1947.
SEC. 2-A. Any person, corporation, or
association which, having in its name or under
its control, a right franchise, privilege, property
or business, the exercise or enjoyment of which
is expressly reserved by the Constitution or the
laws to citizens of the Philippines or of any other
specific country, or to corporations or
associations at least sixty per centum of the
capital of which is owned by such citizens,
permits or allows the use, exploitation or
enjoyment thereof by a person, corporation or
association not possessing the requisites
prescribed by the Constitution or the laws of the
Philippines; or leases, or in any other way
transfers or conveys said right, franchise,
privilege, property or business to a person,
corporation or association not otherwise
qualified under the constitution, or the provisions
of the existing laws; or in any manner permits or
allows any person, not possessing the
qualifications required by the Constitution or
existing laws to acquire, use, exploit or enjoy a
right, franchise, privilege, property or business,
the exercise and enjoyment of which are
expressly reserved by the constitution or existing
laws to citizens of the Philippines or of any other
specific country, to intervene in the
management, operation, administration or
control thereof, whether as an officer, employee
or laborer therein, with or without remuneration
except technical personnel whose employment
may be specifically authorized by the [President
of the Philippines upon recommendation of the
Department Head concerned, if any,] and any
person who knowingly aids, assists or abets in
the planning, consummation or perpetration of
any of the acts hereinabove enumerated shall
be punished by imprisonment for not less than
five nor more than fifteen years and by a fine of
not less than the value of the right, franchise, or
privilege enjoyed or acquired in violation of the
provisions hereof but in no case less than five
thousand pesos: Provided, however, That the
president, managers, or persons in charge of
corporations, associations, or partnerships
violating the provisions of this section shall be
criminally liable in Lieu thereof: Provided further,
That any person, corporation or association
shall, in addition to the penalty imposed herein,
forfeit such right, franchise, privilege, and the
property or business enjoyed or acquired in
violation of the provisions of this Act. (Ed. Note:
Words in brackets were deleted in PD 715,
supra.)
4Inserted by CA 421, section 1, approved May
31, 1939.
5Insertedby RA 6084, section 1, approved
August 4, 1969.
6.
Inserted by RA 134, section 3, approved June
14, 1947.