Department of Finance Building. | PHOTO: DOF Facebook
MANILA, Philippines—A flurry of foreign investors who can shell out bigger pay to an also larger number of skilled workers can jack up wages in the Philippines, the Department of Finance (DOF) said on Wednesday (April 6).
“Medium- to long-term, the passage of the amendments to the Foreign Investments Act (FIA), the Retail Trade Liberalization Act (RTLA), and the Public Service Act (PSA), will help bring in more employers,” Gil Beltran, the DOF’s chief economist and former undersecretary, said in an economic bulletin.
Beltran earlier estimated attracting at least $10 billion in brick-and-mortar foreign direct investment (FDI) yearly with these three economic liberalization laws, plus the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) already in place.
President Rodrigo Duterte’s economic team had successfully pushed for amendments to the three previously antiquated laws to open some sectors which earlier restricted foreign investors, and in lieu of amending the umbrella “60-40” rule mandating majority-owned Filipino businesses that’s enshrined in the 1987 Constitution.
“The recent signing into law of the amendments to the RTLA, FIA and PSA is a welcome development towards faster economic recovery and, ultimately, better employment opportunities,” Beltran said.
For Beltran, “more employers seeking skilled labor could translate into higher offered wages.”
“This market-based mechanism raises salaries even without increasing the minimum wage,” Beltran added.
To date, annual FDI inflows to the Philippines breached the $10-billion mark just two times — $10.3 billion in 2017, bolstered by Japan Tobacco International’s (JTI) acquisition of shuttered homegrown cigarette manufacturer Mighty Corp. and the record-high $10.5 billion generated last year.
TSB
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