DOF pushes for updates to investment laws

The same old investor concerns on ownership limits and bureaucratic red tape, aggravated by uncertainties wrought by the prolonged COVID-19 pandemic, keep foreign capital away from the Philippines’ shores, the Department of Finance (DOF) said on Wednesday.

As such, Finance Secretary Carlos Dominguez III reiterated the economic team’s push to amend two more antiquated laws to allow bigger participation by foreign investors in domestic industries.

In a statement, the DOF said the country’s investment promotion agencies (IPAs) reported to the interagency Fiscal Incentives Review Board (FIRB) last month the aforementioned top three barriers to foreign investments.

Some IPAs, which give away tax and other perks to big-ticket investments, also blamed the lack of basic utilities and quality internet connectivity as deterrents to an influx of foreign-led projects, the DOF quoted Finance Assistant Secretary and FIRB secretariat chair Juvy Danofrata as saying.

As FIRB chair, Dominguez said “the top issues raised by the IPAs affirm the direction of government efforts to promote job-generating investments in the country.”

“To address the restrictions to foreign equity, the Duterte administration has strongly supported the amendments to the Public Service Act, Retail Trade Liberalization Act and Foreign Investment Act, which will responsibly open up our economy to more foreign investments that will benefit our people in the form of more quality jobs, products and services. This will also help investors and Filipino families have access to faster and more reliable internet connection. That is why it is critical that we liberalize the telco industry,” Dominguez said.

President Duterte last month signed into law Republic Act No. 11595 containing the amendments to the Retail Trade Liberalization Act, which slashed foreign retailers’ minimum paid-up capitalization to P25 million from P125 million previously, while doing away with other previous qualification requirements in terms of net worth, number of branches and retailing track record.

Still pending President Duterte’s approval was the amendment to the Foreign Investment Act. The proposed amendment to the Public Service Act has yet to undergo bicameral proceedings by the two chambers of Congress.

As for the government’s pandemic response, Dominguez said “the vaccination of our people against COVID-19 will allow us to remove the pandemic as a determinant of how the Philippine economy performs and allow more businesses to confidently invest in the country.”