DFA head supports lifting of restrictions on foreign ownership

MANILA, Philippines - Foreign Affairs Secretary Albert F. del Rosario said yesterday he supports proposals to lift restrictions on foreign ownership in the country to attract more investments.

“There may be a need to re-evaluate the existing economic parameters as the Philippines further redefines international economic policy and offer more access to foreign investments. There may be a need for changes in statutory ownership standards,” he said during the formal launch of the Angara Center for Law and Economics yesterday.

Del Rosario said since the Philippines has decoupled from the nations badly battered by the ongoing global economic crisis, the country was saved from the negative impact of the crisis.

“But now it has less access to markets that have been earlier be given preferential treatment status from the nations or regions which are now suffering from the global financial crisis,” he added.

The country has been ranked in the lower half of nations considered not attractive, or difficult to do business with in global surveys on doing business.

Economists have argued that by lifting all restrictions on foreign ownership of domestic property or business, it not only improve the ranking of the country but also open the floodgates to capital inflows.

Del Rosario’s pronouncement comes at a critical time when there have been clamors for amendments to the 1987 Constitution.

Congressional leaders led by Senate President Juan Ponce Enrile and House Speaker Feliciano Belmonte have been making representations with President Aquino to support charter change, albeit limited to economic items.

The congressional leaders believe that removing the 60:40 rule on foreign ownership will bring in more investments and create more employment.

But Aquino said there is no correlation between the restriction and foreign investments. “Foreign investors will come despite these restrictions as long as they can make money.”

Aquino had asked the National Economic and Development Authority (NEDA) and the rest of the economic managers to study the proposal to amend the restrictions on foreign capital in the 1987 Constitution.

The world is experiencing a change of focus with global investor money looking towards emerging markets and Asia in general.

The Philippines is said to be in a “sweet spot” for foreign investments with its economy recording sustained growth over several decades, overcoming the hostilities of the Asian 1997 and the 2008 global financial crisis.