Peza, British envoy back easing of foreign investment restrictions
MANILA, Philippines–The head of the Philippine Economic Zone Authority (Peza) has backed calls to revisit the restrictions imposed by law on foreign ownership, particularly for capital-intensive projects, as the country moves to attract more foreign investments.
Peza Director General Lilia de Lima made the remark at a forum hosted by the Shareholders’ Association of the Philippines (Sharephil) on Wednesday, agreeing with the statement made by British Ambassador to Manila Asif Anwar Ahmad.
Ahmad noted that a “whole lot more could come from foreign investment if the restrictions are lifted.”
For big projects and investments, he said it was difficult for a foreign investor to accept a minority shareholding, especially if it would carry the bulk of the risk and provide the management expertise and technology. “I am not making a political point about changing the Constitution. I am arguing for the economic case for change,” Ahmad explained in the same forum Wednesday.
Although there are a number of restrictions in ownership in certain businesses, foreign investors are still entitled to certain rights, particularly within the Peza-managed economic zones. However, the Philippines’ bid for more foreign direct investments continued to be hampered by an image of being a corrupt country, De Lima noted.
This was why their strategy was to bring investors to Peza zones where “there is no corruption,” she said.
Despite all these challenges, De Lima stressed that the Philippines continued to have a competitive edge as one of the best investment sites in the world, one of which was a young, hardworking, literate, English-speaking, easily trained and friendly Filipino workforce.
There are 306 Peza-managed ecozones, which host 3,276 locators. Investments made by these locators have reached P2.68 trillion from 1995 to May this year, while employment stood at more than a million as of end April 2014. Total exports from these zones from 1995 to April 2014 reached $532.61 billion.
In the same forum, Ahmad noted that the economic model of the Philippines was gaining credibility from the international community as reflected in the investment-grade rating of Philippine debt.
But for economic growth to translate to employment growth, the Philippine government must invest more in education, healthcare and affordable social housing. Ahmad also urged a breakaway from the low wage and low productivity mind-set.