Belmonte urges flexibility on foreign ownership rule

MANILA, Philippines - Providing flexibility in the country’s restrictions on foreign ownership will allow the Philippines to be more competitive and attract investments, House Speaker Feliciano Belmonte, Jr. said.

Belmonte, in a speech read by Deputy Speaker Giorgidi Aggabao at the Foundation for Economic Freedom’s Monthly Members Meeting said that as the momentum for the Philippines to achieve higher economic growth is there, the country should take advantage by taking the first step of providing flexibility in the very rigid economic provisions of the Constitution.

“We need to ride on this momentum, build upon it, and sustain it over the long term. This means permanently saying goodbye to the boom-bust cycles that historically characterized our economy, and attaining much higher and more consistent growth rates that will eventually eradicate poverty by ensuring that the benefits of growth are significantly felt by all,” he said.

He noted though that the House Speaker growth will entail bringing in more investments, including foreign investments that will creates more jobs.

To attract foreign investments, the House Speaker said the country should be able to present itself as the most viable investment option alongside its neighbors in the Southeast Asian region.

“No matter how robust our labor force is or how favorable the conditions are in our labor market, no mater how cheap we can pull down the cost of capital, if we continue to restrict foreign entry into our industries and other economic activities, the playing field is lopsided from the start, and investors, particularly, foreign investors, will not waste their time and instead, look elsewhere,” he said.

At present, the Constitution sets a  40-percent limit on foreign ownership in the following activities: development of natural resources, investment in areas recommended by the national and planning agency to be of national interest, operation of public utility franchises, and  educational institutions, except those established by religious or mission groups.

Engagement in the advertising industry meanwhile, is limited to firms that are at least 70 percent Filipino owned.

Those which are only open to Filipino citizens are agricultural lands of public domain, ownership and management of mass media, as well as holding of executive and managing positions in the advertising industry.

Earlier, Belmonte filed House Resolution No. 1 which aims to have the Senate and Congress introduce amendments to relax or provide flexibilities in the constitutional restrictions on foreign investments.

The amendments to be passed by the two chambers will still be subject to the approval of a nationwide plebiscite.

President Aquino has said though that he does not support making amendments to the Constitution.

Aggabao said that as there has been no go-signal from Aquino on the proposal, the Congress has yet to act on the resolution.

“Unless Malacañang is on board, nothing will happen,” he said.