EDITORIAL - Inviting investors

Returning to the United States for the first time in nearly three decades, President Marcos delivered an optimistic message at the New York Stock Exchange, telling investors that the Philippines should be a bright spot on their radar.

Apart from outlining a number of points about the soundness of the country’s macroeconomic fundamentals – gross domestic product growth forecasts, improving employment situation, accelerated manufacturing activity and the enhanced trade infrastructure – he also pitched the country’s new policies regarding economic liberalization and easing of foreign investment restrictions.

It has been said that a small cup is unable to quench the thirst of many, even if it is filled to the brim. For far too long, the Philippines has been seen as notoriously restrictive when it comes to foreign direct investment, perennially ranking in the top five out of 84 countries in the Organization for Economic Cooperation and Development’s list of most FDI-restrictive states.

A cursory examination of the OECD checklist will confirm that the Philippines ticks almost all of the boxes: foreign equity limitations, discriminatory screening or approval mechanisms, restrictions on the employment of foreigners as key personnel, and other operational restrictions, such as those on branching and capital repatriation or land ownership by foreign-owned enterprises.

The country had been offering a figuratively small cup to the rest of the world. All the wooing and pursuing of investments ultimately could not be maximized. It took something as drastic as a global pandemic to persuade policy makers to prioritize amendments to FDI rules, to help jumpstart economic recovery.

Policy makers have said that the amendments and improvements to the Retail Trade Liberalization Act are just the beginning of even larger reforms. The President’s optimistic pitch to US investors will bear fruit only if it goes hand-in-hand with the removal of investment barriers. The country has lagged behind many of its Asian peers in ease of doing business. The rule of law remains weak and the regulatory environment is unpredictable. A recent survey of top chief executive officers showed that corruption remains a key concern.

With the pandemic in its final phase, the country needs extra effort to attract investments that will create jobs and put the economy on a solid track to recovery. To draw those investments, reforms must be sustained. come in.