Pernia: PH to generate $30B in FDI a year if foreign caps removed

Removing foreign caps on investment, retail trade and public utilities will allow the Philippines to generate up to $30 billion in foreign direct investment (FDI) a year, according to the country’s chief economist.

“Concerning FDI, the Philippines is the most restrictive country in Asean,” Socioeconomic Planning Secretary Ernesto M. Pernia told the 2019 Pre-State of the Nation Address (Sona) Economic and Infrastructure Forum.

As such, ”the legislature really should pass many of these bills such as [amendments to] the Foreign Investment Act, the Retail Trade Act, and the Public Service Act,” said Pernia, who heads the state planning agency National Economic and Development Authority (Neda).

For Pernia, if the amendments to these three existing laws were passed to liberalize the economy, “we could really expect much more foreign investment—tripling or quadrupling what we have already achieved.”

Pernia later told reporters that the Philippines “can easily” attract about $30 billion in FDI per year if the restrictions were freed up.

The Philippines’ FDI reached a record high $10.3 billion in 2017, but it declined to $9.8 billion last year.

Pernia said these bills would have to be refiled during the upcoming 18th Congress, “but they would be easier [to pass] because they were declared urgent by the President.”

The Neda chief was hopeful that these bills could be refiled within the year.

Besides the liberalization of FDI, retail trade and utilities, Pernia was also pushing for the passage of the Tax Reform for Attracting Better and Higher Quality Opportunities (Trabaho) package, as well as the bill that will expand Neda’s mandate. —BEN O. DE VERA