Atty. Alfonso F. Villahermosa

September 24, 1990 Atty. Alfonso F. Villahermosa E.P. Gabriel, Jr. & Associates 2nd Floor Gotiaoco Bldg. M.C. Briones St.,Cebu City S i r : This refers to your letter dated August 24, 1990 requesting opinion of the Commission on the following queries: 1. Does a foreign investor wanting to invest in an existing trading business need prior approval from BOI if the investment equity does not exceed 40% of the subscribed capital stock of a corporation? 2. Does business activity of selling feeds to poultry and piggeries constitute retail activity, given the fact that poultry produces eggs or meat and piggeries produce meat? Relative to your first query, please be advised that in permitted investments, the maximum percentage of interest allowable to foreign investors under Section 46 of the Omnibus Investments Code of 1987 without need of prior authority from the Board of Investments is forty percent (40%) of the outstanding capital stock. It has to be emphasized, however, that if the client referred to in your letter is engaged in "retail" trading, foreigners are barred from investing therein pursuant to R.A. No. 1180, otherwise known as the Retail Trade Nationalization Law. Foreign investors are allowed only in "wholesale" trading. Relative to your second query, Section 4 of R.A. 1180, as amended by P.D. 714, provides as follows: "SECTION 4. As used in this Act, the term " retail business " shall mean any act, occupation or calling of habitually selling direct to the general public, merchandise, commodities or goods for consumption, but shall not include : (a) a manufacturer, processor, laborer or worker selling to the general public the products manufactured, processed, or produced by him if his capital does not exceed five thousand pesos. (b) a farmer or agriculturist selling the products of his farm. (c) a manufacturer or processor selling to industrial and commercial users or consumers who use the products bought by them to render service to the general public and/or to produce or manufacture goods which are in turn sold by them . (d) a hotel-owner or keeper operating a restaurant, irrespective of the amount of capital, provided that the restaurant is necessarily included in, or incidental to, the hotel business." (Emphasis supplied) While it is true that the "trader" mentioned in your letter sells feeds to poultry or piggeries who use them to produce eggs or meat which are in turn sold by them, said business does not fall within the purview of the third exception quoted above. It is to be noted that said exception explicitly refers only to "manufacturers" or "processors" and does not include a mere "trader".In this connection, it is worth mentioning the principle of "Expressio Unius Est Exclusio Alterius".The rule means that the mention of one thing implies the exclusion of another. Likewise, it is settled in statutory construction that exceptions in a statute are to be strictly construed. Thus, it was held that "where a statute enumerates the subjects or things on which it is to operate, it is to be construed as excluding from its effects all those not expressly mentioned. (Martin, Statutory Construction, citing Daves Place vs. Liquor Control Comm.,269 N.W.,p. 594) In the light of the foregoing, if the firm mentioned in your letter is only a "trader",not a "manufacturer",its business of selling feeds to poultry or piggeries is considered a retail activity. LexLib (SGD.) RODOLFO L. SAMARISTA Associate Commissioner