SC: Retail Trade Liberalization Act constitutional

THE Supreme Court (SC) has declared constitutional Republic Act 8762, or the Retail Trade Liberalization Act signed by then-President Joseph Estrada in March 2000, which allows foreigners to engage in the retail-trade business in the country.

RA 8762 also allows natural-born Filipino citizens, who had lost their citizenship and now reside in the Philippines, to engage in the retail-trade business with the same rights as Filipinos.

 In an 11-page decision written by Associate Justice Roberto Abad, the Court en banc dismissed the petition filed by lawmakers in the 10th Congress, seeking to declare the law unconstitutional.

 Among the petitioners were Magtanggol Guinigundo I, Michael Defensor, Gerardo Espina, Benjamin Lim, Orlando Fua, Prospero Amatong, Sergio Apostol, Robert Barbers, Enrique Garcia, Raul Gonzales, Jaime Jacob, Apolinario Lozada Jr., Leonardo Montemayor, Ma. Elena Palma-Gil, Prospero Pichay, Juan Miguel Zubiri (now senator) and Franklin Bautista.

They said RA 8762 violates Sections 9, 19 and 20 of Article II of the Constitution that enjoins the government to place the national economy under the control of Filipinos in order to protect Filipinos businesses from unfair competition and trade policies.

The law, they said, would lead to alien control of the retail trade and would crush Filipino retailers and sari-sari store vendors, destroy self-employment and push up unemployment rate in the country.

The petitioners warned that if the law was not scrapped, it would result in monopolies or combinations in restraint of trade.

Aside from the legislators’ lack of legal standing to file the petition, the Court held that the petition should be dismissed because of their failure to support their arguments.

The Court said that while the Constitution mandates a bias in favor of Filipino goods, services, labor and enterprises, it does not rule out the entry of foreign investments, goods and services.

The petitioners failed to convince the Court that the implementation of RA 8672 would lead to alien control of the retail trade business, considering that the law itself has provided strict safeguards on foreign participation in the retail business. The Court said.

It also noted that under the law, foreigners can only engage in retail trade subject to four categories: enterprises with paid-up capital of less than $2.5 million shall be reserved exclusively for Filipino citizens and Filipino-owned corporations; enterprises with $2.5 million up but less than $7.5 million may be wholly owned by foreigners except for the first two years of the effectivity of RA 8762; those with $7.5 or more may be wholly owned by foreigners, provided the investment for establishing a store in Categories B and C would not be less than the equivalent in Philippine pesos of $830,000; and $250,000 per store of foreign entprises specializing in high-end or luxury products maybe wholly owned by foreigners.

“While it [the Constitution] does not encourage their unlimited entry into the country, it does not prohibit them either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition that is unfair,” the SC said.

Furthermore, the Court noted that contrary to the claim of the petitioners,  RA 8672 would not amount to the denial of the Filipinos’ right to property and to due process.

“In sum, [the] petitioners have not shown how the retail-trade liberalization has prejudiced and can prejudice the local small and medium enterprises since its implementation about a decade ago,” the Court said.

Concurring with the ruling were Chief Justice Renato Corona and Associate Justices Antonio Carpio, Conchita Carpio Morales, Diosdado Peralta, Lucas Bersamin, Mariano del Castillo, Martin Villarama Jr. and Jose Portugal Perez.

Associate Justices Jose Catral Mendoza, Arturo Brion, Teresita Leonardo-De Castro, Maria Lourdes Sereno, Presbitero Velasco  Jr and Antonio Eduardo Nachura are all on leave. –Joel R. San Juan / Reporter, Businessmirror