Socioeconomic Planning Secretary Ernesto M. Pernia (File photo by JOAN BONDOC / Philippine Daily Inquirer)
The government will slash the minimum capitalization for foreign retailers that want to put up operations in the country while amendments to the Constitution aimed at further relaxing foreign ownership restrictions will be introduced next year, economic managers said yesterday.
On the sidelines of the opening ceremony of the 28th National Statistics Month, Socioeconomic Planning Secretary Ernesto M. Pernia said the 11th foreign investment negative list (FINL) to be issued this year would reduce to $200,000 the minimum paid-up capital needed by foreigners to participate in domestic retail trade.
Under Republic Act No. 8762 or the Retail Trade Liberalization Act of 2000, enterprises with paid-up capital of less than $2.5 million “shall be reserved exclusively for Filipino citizens and corporations wholly owned by Filipino citizens.”
As such, only enterprises with a minimum capitalization of $2.5 million or more may be owned fully by foreigners, a provision that has been deemed “restrictive” by foreign investors.
Pernia, who heads the state planning agency National Economic and Development Authority, added that the 11th FINL would also allow the entry of international construction companies.
Neda had also said that it was looking at up to 100-percent foreign ownership in investment houses.
Pernia said opening up these sectors would make local players “more competitive and they will be forced to be internationally competitive.”
“The purpose is to make the consumers happy,” the Neda chief added.
According to Pernia, the 11th FINL would be up for President Duterte’s approval at a Neda Board meeting before the end of the year.
Every two years, the government releases the FINL, which lists down industries where foreign investors have only limited participation.
The 10th FINL was issued in 2015 by former President Aquino under Executive Order No. 184, which practically kept intact the list of activities and sectors restricted to foreign equity as provided for in the ninth regular FINL.
Separately, the Department of Finance said in a statement that the move to relax foreign ownership restrictions in certain industries via amendments to the Constitution might start next year in fulfillment of President Duterte’s commitment to open up the economy to more long-term, job-generating foreign direct investments.
The DOF statement quoted Finance Secretary Carlos G. Dominguez III as saying that besides the ongoing FINL review, the government—specifically the executive and the legislative—would amend the Constitution as “we are moving toward opening up the economy to more foreign investments.”
“The President has called for a revision of our Constitution, which we believe will start probably next year or in about 12 months,” Dominguez noted.
The finance chief earlier said that he was amenable to lifting foreign investment restrictions, except for land ownership.