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REVIEWER
(2013-2014)
B.
Public
Policy
under
RTLA
2000:
A
reversal
of
paradigm;
focus
from
the
protecting
the
retailers
to
promoting
the
interests
of
consumers.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
and
commodities
needed
for
daily
life
are
placed
within
the
easy
reach
of
consumers.
Retail
dealers
perform
the
functions
of
capillaries
in
the
human
body,
thru
which
all
the
needed
food
and
supplies
are
ministered
to
members
of
the
communities
comprising
the
nation.
...
The
retailer,
therefore,
from
the
lowly
peddler,
the
owner
of
a
small
sari-sari
store,
to
the
operator
of
a
department
store
or
a
supermarket
is
so
much
a
part
of
day-to-
D.
Meaning
of
Consumption
(DOJ
Opinion
No.
325,
series
of
1945;
IRR
of
Law).
B.
Elements:
1. Seller
habitually
engaged
in
selling;
2. Selling
direct
to
the
general
public;
and
3. Object
of
the
sale
is
limited
to
merchandise,
commodities
or
goods
for
consumption.
C.
Meaning
of
Habitually
Selling
Engaging
in
the
sale
of
merchandise
as
an
incident
to
the
primary
purpose
of
a
corporation
[e.g.,
operation
of
a
pharmacy
by
a
hospital;
sale
of
cellphones
by
a
telecommunication
company]
does
not
constitute
retail
trade
within
the
purview
of
the
Retail
Trade
Nationalization
Law,
as
this
is
taken
from
the
provision
thereof
excluding
form
the
term
retail
business
the
operation
of
a
restaurant
by
a
hotel-owner
or
-keeper
since
the
The
Law
limits
its
application
to
the
sale
of
items
sold
for
domestic
or
household,
or
properly
called
consumer
goods;
whereas,
when
the
same
items
are
sold
to
commercial
users,
they
would
constitute
non-consumer
goods
and
not
covered
by
the
Law.
Balmaceda
v.
Union
Carbide
Philippines,
Inc.
124
SCRA
893
(1983).2
Balmaceda
v.
Union
Carbide
Philippines,
Inc.
Facts:
Union
Carbide
was
a
manufacturer
having
2
divisions:
the
Consumer
Products
Division
and
the
Industrial
Products
Division.
Issue:
Whether
or
not
the
Industrial
Products
Division
is
engaged
in
the
retail
business
Held:
NO.
Retail
pertains
to
the
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.
day existence. 1
Marsman
&
Co.,
Inc.
v.
First
Coconut
Central
Co.,
Inc.,
162
SCRA
206
(1988);
B.F.
Goodrich
Philippines,
Inc.
v.
Reyes,
Sr.,
121
SCRA
363
(1983).
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
Sale
to
the
general
public
must
mean
that
the
activities
of
the
seller
must
be
such
that
the
target
clientele
or
customers
must
not
only
be
a
particular
person
or
group
of
persons.
This
is
not
Goodyear
Tire
v.
Reyes,
Sr.
Facts:
Goodyear,
a
corporation
not
wholly
owned
by
Filipinos,
was
engaged
in
the
manufacturing
and
sale
of
rubber
products
such
as
tires,
batteries,
conveyor
belts,
soles
of
shoes,
etc.
Issue:
Whether
or
not
Goodyear
is
covered
by
the
Retail
Trade
Law
insofar
as
the
prohibition
against
aliens
from
engaging
in
retail
trade
is
concerned.
Held:
NO.
Retail
pertains
to
the
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
prohibition.
The
enterprise
of
Goodyear
clearly
falls
within
this
category.
The
sale
to
proprietary
planters
and
persons
engaged
in
the
exploration
of
natural
resources
is
also
included
in
the
said
classification
and
cannot
be
considered
retail
as
to
come
within
the
ambit
of
the
prohibition.
But
insofar
as
sale
to
employees
and
officers
is
concerned,
this
may
be
considered
retail
and
comes
under
the
prohibition.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
Doctrine:
(CLV
Book)
This
ruling
that
even
limited
sales
to
the
companys
own
officers
and
employees
would
fall
under
the
prohibition
of
the
Law,
effectively
debunk
the
stance
taken
whereby
sale
to
a
limited
class
and
number
is
considered
as
non-retail
since
they
consider
them
not
sales
to
the
general
public
or
sales
confined
only
to
a
few
and
not
to
the
general
public.
However,
the
ruling
reason
of
fraud.
Pioneer
Glass:
denied
liability
to
Yu
on
the
ground
that
by
virtue
of
the
dacion
en
pago
in
favor
of
DBP,
the
bank
assumed
liability
to
its
creditors
including
Yu
under
a
payment
scheme,
which
is
under
pending
implementation
DBP:
denied
liability
to
Yu
on
the
ground
that
there
being
no
proof
that
the
unpaid
merchandise
purchased
by
Pioneer
Glass
were
among
those
transferred
to
it
Union
Glass:
denied
liability
to
Yu
on
the
ground
that
there
was
no
privity
of
contract
between
them,
or
assuming
applicability
of
the
Bulk
Sales
Law,
no
liability
attached
to
Union
Glass.
MTC
denied
the
motions
to
dismiss
filed
by
Union
Glass
and
DBP
and
DBP
v.
Honorable
Judge
of
the
RTC
of
Manila
Facts:
In
1978,
Pioneer
Glass
Manufacturing
Corp.purchased
from
Yu
(under
Ancar
Equipment
Parts
and
Tonicar)
equipment
parts
worth
P7,000.
However,
Pioneer
failed
or
refused
to
pay
upon
demand.
Without
informing
Yu,
Pioneer
Glass
transferred
all
its
assets
to
DBP
in
a
"deed
of
cession
of
property
in
payment
of
obligation"
or
dacion
en
pago.
In
turn,
DBP
sold
these
assets
to
Union
Glass
that
same
year.
In
1983,
Yu
instituted
an
action
against
Pioneer
Glass,
DBP,
and
Union
Glass,
asserting
that
the
transfer
of
the
assets
to
DBP
was
void
by
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
B.
Category
B
E.
Exempted
Areas:
Although
all
three
(3)
elements
of
retail
trade
may
be
present,
the
following
transactions,
or
series
of
transactions,
are
expressly
exempted
from
the
coverage
of
retail
trade
under
RTLA
2000,
thus:
1. Sales
by
a
manufacturer,3
processor,4
laborer,
or
worker,
to
the
general
public
of
the
products
manufactured,
processed
or
produced
by
him
if
his
capital
does
not
exceed
5100,000.00;
2. Sales
by
a
farmer
or
agriculturist,5
of
the
products
of
his
farm,
regardless
of
capital;6
3. Sales
in
restaurant
operations
by
a
hotel
owner
or
inn-keeper
irrespective
of
the
amount
of
capital,
provided
that
the
D.
Category
D
Luxury
Items
C.
Category
C
Paid-up
Capital
means
the
total
investment
in
a
business
that
has
been
paid-up
in
a
corporation
or
partnership
or
invested
in
a
single
proprietorship,
which
may
be
in
cash
or
in
property.
It
shall
also
refer
to
assigned
capital
in
the
case
of
foreign
corporations.
Sec.
1(l),
Rule
I,
IRR.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
IV.
Foreign
Investment
or
Engage
in
Retail
Trade
in
the
Philippines
A.
Requirements
for
Foreign
Investors
B.
Grandfather
Rule
on
100%
Filipino
Ownership
of
Corporate
Entity:
SEC
Opinions,
dated
20
March
1972
and
22
April
1983;
DTI
Opinion
to
Tanada,
Teehankee
&
Carreon
Law
Office,
dated
3
August
1959.
Both
the
SEC
and
the
DTI
have
applied
the
so-called
grandfather
rule
which
is
a
process
of
characterizing
the
citizenship
of
shares
in
one
corporation
held
by
another
corporation
by
attributing
the
controlling
interest
of
individual
stockholders
in
the
second
layer
of
corporate
ownership.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
2. Acquiring/Investing
in
Existing
Retail
Stores
only.2
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
For ten (10) years after the effectivity of RTLA 2000, at least
E.
Binding
Effect
of
License
to
Engage
in
Retail
on
Private
Parties
VII.
Applicability
of
the
Anti-Dummy
Act
(Comm.
Act.
108,
as
amended
by
P.D.
715)
A.
VI.
Penalty
Provisions:
Any
person
who
shall
be
found
guilty
of
violation
of
any
provision
of
RTLA
2000
shall
be
punished
by:
1. Imprisonment
of
not
less
than
six
(6)
years
and
one
(1)
day
but
not
more
than
eight
(8)
years;
and
2. Fine
of
not
less
than
51.0
Million,
but
not
more
than
520.0
Million.
C.
Promotion
of
Locally-Manufactured
Products
B.
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
Later, Pres. Decree 715 was enacted amending the law by the
The
DTI,
in
coordination
with
the
SEC,
the
NEDA
and
the
BOI
shall
formulate
and
issue
the
implementing
rules
and
regulations
necessary
to
implement
RTLA
2000
within
ninety
(90)
days
after
its
approval.
B.
Role
of
DOJ
and
SEC
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)
VIII.
IMPLEMENTING
AGENCY
A.
DTI
as
Implementing
Agency
C.
Also,
the
SEC,
as
the
agency
charged
with
the
supervision
and
control
of
partnerships,
associations
and
corporations
should
be
NOTES
BY
RACHELLE
ANNE
GUTIERREZ
(UPDATED:
MAY
21,
2014)