MANILA, Philippines - The Joint Foreign Chambers (JFC) of the Philippines is pushing for the review of the various restrictions on foreign equity investment in the country to see whether these promote national interest as foreign companies are looking to locate here.
In a statement yesterday, the JFC called for a review of the Foreign Investment Negative List (FINL), citing that a reform policy to determine whether such restrictions continue to be in the national interest is lacking.
“A review is overdue. This could be done by an inter-agency team instructed to review various restrictions on foreign equity investment in the participation in the Philippine economy of foreign equity, taking into consideration whether restrictions impede investment, job creation, and competitiveness,” it said.
The JFC said that while the government has been issuing an updated FINL every two years, it rarely contains any significant reforms.
The FINL provides the business activities open to Filipino businessmen and sets limits in participation of foreign investors in areas under the laws and the Constitution.
Late last month, the government released Executive Order 98 or the 9th FINL.
The JFC noted that since 1991, only two major changes have been made to the FINL such as the opening of retail trade to foreign investors investing at least $2.5 million and allowing 100-percent foreign equity in gambling in Philippine Economic Zone Authority zones.
It also cited that according to a report of the World Bank, the Philippine economy remains more closed to foreign investment compared to its neighbors in the Southeast Asian region.
“While constitutional restrictions on foreign capital and foreign professionals are hard to change, restrictions in legislation and/or in interpretations of what should or should not be in the FINL should be easier to liberalize,” it said.
It also said removing the “List A. Practice of all professions” entirely from the FINL is one change that would make the list less negative, citing that the Professional Regulatory Commission decides whether reciprocity exists when a foreign national applies to practice in the country.
With foreign companies looking to set-up or expand manufacturing operations in the Philippines, the JFC said it is likewise time to consider making changes to the list.
“The Philippine Government can build on the growing optimism about improved opportunities to invest in the Philippines by making a serious effort to make the Negative List less negative,” it said.