SM open on plan to ease entry of foreign retailers

MANILA, Philippines — The SM Group is open to the expected entry of more foreign brands in the Philippines in line with the administration’s plan to further liberalize retail trade.

SM Investments Corp. vice chair Teresita Sy-Coson said yesterday they welcome the move to drastically lower the foreign capital limit for those who want to compete in the domestic retail market, saying it would bring in more foreign direct investments (FDI).

“Of course there’s always a threat. There’s always a positive and a negative side, but you have to live through it,” Sy-Coson said.

“It’s okay, so many people will partner with them so that’s okay. It’s not easy for many of them to come on their own, they have to partner somehow or at least hire Filipinos as part of their team,” she added.

Even as foreign retail brands come in Sy-Coson said local brands would keep a competitive edge since they know what the Filipino consumer wants.

“It’s just that in our company, our mantra is try to compete as much as you can. But if you cannot compete, if you cannot beat them, then join them,” she said.

Socioeconomic Planning Secretary Ernesto Pernia earlier said the government intends to further open up retail trade to drastically lower the foreign capital limit from the current $2.5 million to $200,000, a move in line with the easing of the Foreign Investment Negative List.

He said allowing greater participation of foreign players in retail trade would increase competition that would push local companies to innovate and create better products.

Sy-Coson said although the $200,000 foreign capital limit “is a bit small,” any additional FDI into the country would be a welcome development.

“I guess it depends upon how the country sees the amount,” she said.

Retailer and franchise groups have argued that the planned $200,000 foreign capital limit should not be the amount which the country should be targeting for as such capital can be made even by small and medium foreign companies.

“We lack foreign direct investments. Then (what we should do is) bring in a $1 billion investment, or tens of millions. So why are you bringing $200,000 investments?” Philippine Franchise Association chairman emeritus and Philippine Retailers Association vice chair emeritus Samie Lim said earlier.

 “This is just for show to say that you have 10 more investors worth $200,000 each. That’s a joke. It is just trying to window dress your scorecard of performance. We need dollars of money so let’s go out there and get the big ticket projects,” he added.