Foreign funds off limits in 4 areas
MANILA, Philippines—President Benigno Aquino III has signed an executive order identifying four new areas, including real estate and health care, which are totally or partially off-limits to foreign investors.
Executive Order No. 98 reflects the limitations on foreign ownership and foreign practice imposed by the Real Estate Service Act, the Philippine Respiratory Act, the Philippine Psychology Act, and the Lending Company Regulation Act of 2007, Executive Secretary Paquito Ochoa Jr. said.
These are now included in the EO’s List A. These were not reflected in EO 858 issued in February 2010 by the Aquino administration, Ochoa said.
The Lending Company Regulation Act allows foreigners to own up to 49 percent in lending companies.
The three other laws limit the practice of foreigners in the areas of real estate and health care such as respiratory therapy and psychology, unless there is a reciprocity arrangement prescribed by a law, he said.
The Foreign Investments Act of 1991 provides for the formulation of such list covering areas which may be opened to foreign investors or reserved to Filipinos.
The new executive order, signed by the President on Oct. 29, makes a distinction between List A and List B.
List A specifies the areas of economic activity where foreign ownership is prohibited or limited by the Constitution or laws.
These areas include mass media, practice of all professions, cooperatives, private security agencies, small-scale mining, private radio communications network, private recruitment
for local or overseas employment, advertising, ownership of private lands, lending companies, financing companies and investment houses regulated by the Securities and Exchange Commission.
But List A may be amended anytime to reflect changes brought about by new laws, Ochoa said.
List B, on the other hand, identifies the economic activities regulated by law, from small- and medium-scale such as manufacture of firearms to businesses such as gambling, sauna and massage clinics.
This List B may also be amended once every two years, Ochoa said.
Through EO 98, the President sought to promulgate the ninth Regular Foreign Investment Negative List, which enumerates the industries and business activities that are open to Filipino businessmen, and defines the extent of participation of foreign investors in areas allowed by law and the Constitution.
Reserved for Filipinos
The new EO has annexes listing investment areas reserved for Filipinos.
“This is always the reference point especially for new investors who do not have any experience or do not have prior experience of investing money in the Philippines. We can see these are very clear guidelines that they can use as a reference point,” Undersecretary Abigail Valte, deputy presidential spokesperson, said over government-run dzRB.
The old EO 858 provided for the eighth negative list.