By Bernie Cahiles-Magkilat
SM Group, which owns the largest chain of department stores and supermarkets in the country, favors the further opening up of the domestic retail trade to full-foreign ownership.
“It’s okay, if you can’t beat them, join them,” said Tessie Sy-Coson, vice chairman of SM Investments Corp. (SMIC), when asked on her opinion on the government’s plan to further liberalize domestic retail trade to foreign retailers during a huddle at the launch of the ASEAN Business & Investment Summit.
The National Economic and Development Authority is planning to reduce from $2.5 million to $200,000 the minimum paid up capital requirement for fully-owned foreign retailer.
Coson, however, has expressed reservation on the planned $200,000 minimum investment that maybe required for a fully-owned foreign retail operation.
“$200,000 is a bit small,” said Coson, who also does not think that the current $2.5-million investment threshold under the Retail Trade Liberalization Act of 2000 also poses as a problematic barrier to the entry of foreign retailers.
She, however, hastened to add that it is up for the country and legislators to work on the investment requirement. “Even if we say that it is low, with the how the world is turning right now anything can happen,” she said.
Coson, however, said that for big retailers like them, “If you can’t beat them, join them and I guess it should be for everyone. In our company, the mantra is that if we cannot beat them, then join them as well.”
She also believes that the further liberalization of retail trade will bring in more foreign direct investments into the country.
She even downplayed the impact of further opening up of the domestic retail trade even as she also acknowledged threats from this move.
According to her, opening up domestic retail trade should not scare local retailers because these foreign retailers will always partner with the locals.
While said also acknowledged of threats, Coson stressed that the number one strength of the local retailers is they know what the market wants. This will force the foreign retailers to partner with the locals or hire Filipinos as part of the team because it will not be easy for them to come on their own.
“Of course there is always threat, there’s always the positive and negative. You have to live through it,” she stressed.
In addition, she cited the advent of the digital economy has also made it more important to open up the economy further.
“I guess at this point we’re all on digital economy, we should encourage this now,” she said.
Coson also said that will really facilitate businesses into the country is improved business processes of government regulators.
“That will help a lot of Filipino businesses. Like in ASEAN, the world out there – join them or we have to improve ourselves,” she said.
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