Foreign investment curbs to be eased

Neda chief says restrictions on ownership can be relaxed without Charter change

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The Aquino administration shall push for laws that will lift restrictions on foreign investments in various domestic industries, with its economic team and allies in Congress agreeing that opening the economy up further to investors is long overdue.

“President Aquino and some members of Congress understand that it makes sense to now change the rules of the game,” said Arsenio Balisacan, director general of the National Economic and Development Authority.

Balisacan, who also serves as the country’s socioeconomic planning secretary, said the President is keen on opening up domestic industries to foreigners, but without having to amend the Constitution.

He said this is possible, noting that a review of existing laws covering several industries has begun to determine which ones can be replaced without having to touch the country’s charter.

“We [economic team] believe a big part of current restrictions can be amended only by issuance of laws and without amending the Constitution. We want to make a strong case in Congress for changing some laws,” Balisacan said Friday in a forum organized by the Foreign Correspondents Association of the Philippines.

The country’s chief economist said lifting restrictions to foreign ownership and investments is vital to preparing the Philippines for the economic integration of the Association of Southeast Asian Nations, which is scheduled to take place in 2015. Under the plan, Asean members shall become one economic bloc where cross-border investments are can be made with ease.

Although some economists believe actual implementation of the Asean economic integration may extend beyond 2015, Balisacan said it would pay to be prepared. He said that if the Philippines retains existing restrictions to foreign ownership and investments, the country would be left out of reaping the economic benefits of easier investment flows.

Balisacan said restrictions contribute to the low levels of foreign direct investments (FDIs) being cornered by the Philippines compared with its neighbors. The primary reasons include questions about the sustainability of economic growth and inadequate infrastructure.

He said the Philippines, which grew year on year by 6.8 percent in 2012 and 7.8 percent in the first quarter of this year, should be able to keep registering rapid growth rates, invest more in infrastructure, and lift restrictions to foreign ownership and investments in order to catch up with its neighbors in terms of FDIs.

Balisacan said attracting FDIs is crucial in helping trim the relatively high underemployment rate and poverty incidence in the Philippines. Underemployment stood at 19.2 percent in April this year and 27.9 percent in June 2012.

He added that FDIs are needed to generate high-quality jobs for Filipinos.

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  • Porky Caberoy

    It’s a start, I guess. This is the ‘admitting there’s a problem’ stage. But we need to go all the way with concrete changes. For certain, there will be a lot of opposition from the leftists with their kneejerk (and anachronistic) reaction of ‘Yankee Go Home’ but who have no idea how to improve the economy. (Why should they when they want a poor populace to overthrow democracy?) Lawmakers must not misinterpret their stridency as vox populi. The other trick would be keeping those foreign investors here once they get in, and that can only be done by fixing infrastructure like electricity, flood control and traffic.

  • Joseph20112012

    Overhauling the Foreign Investment Negative List Act or RA 7042 like allowing 100% foreign investment in large-scale mining below $50 million, medium-scale, and small-scale; oil and gas extraction; agriculture; public utilities; telecom; power distribution, generation, and transmission; banking; light and heavy manufacturing; tourism; education; health care; media; and advertising is unconstitutional as the 1987 constitution clearly states that only 40% foreign investment is allowed with those key sectors.

    They have to accept the fact that we need to scrap the 40/60 forced equity sharing in Article XII, Sections 2-3 and 10-14; Article XIV, Section 4; Article XVI, Section 11 so that our future foreign direct investment law will not have any constitutional contradictions that can be exploited by left-leaning lawyers through litigation, thus, turning off many foreign investors from investing in our economy more if constitutional restrictions are still there.

  • mamamiamia

    Suggestion lang mga hija, bakit di ninyo bigyan ng wider rights to invest also (and protection from manloloko ano) ang mga former Pinoy na naging citizen of a foreign country ( offcourse, ayaw i-avail and Dual Citizenship Law) and are prohibited to invest because of nationality restrictions? Bet you, their busting with lots of mullah and di maka tulog and they don’t know where to put it or invest it. Why not give them more incentives (and protection sa manloloko ano) to invest in Pinas? Oh diba! Suggestion lang ito mga hija Ok!

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