JFC Wants Foreign Invest Negative List Shortened to Attract FDIs
Foreign businessmen said the Philippine economy has remained closed to foreign investments as shown by the recently released 9th Foreign Invest Negative List as they urged the government to be more proactive in removing foreign restrictions to welcome more foreign direct investments.
"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," the Joint Foreign Chambers (JFC) of the Philippines said in a statement.
JFC said the 9th FINL does not contain new restrictions legislated by the 15th Congress, rather it adds four new minor restrictions legislated during the 14 Congress in 2007 to 2010.
During the 20 years since the important liberalizing reform of RA 6957, the Foreign Investments Act (1991) as amended by RA 8170 (1996), only two major changes have been made to the FINL: RA 8762, the Retail Trade Liberalization Act (2000) opening retail trade to foreign investors investing at least $2.5 million; and EO 158 (2010), the 8th FINL allowing 100% foreign equity in gambling in PEZA zones (by presidential proclamation).
The JFC also cited a report by the World Bank on Investing Across Borders 2010, which measures how 87 economies facilitate market access and operations of foreign companies, where the Philippines lagged in terms of FDI inflows among ASEAN countries. The report presents cross-country indicators analyzing laws, regulations, and practices affecting FDI in investing across sectors.
Of the 87 countries surveyed, the Philippines and Thailand have some of the strictest foreign equity rules and fall below the East Asia and Pacific average as well as the high-income OECD economies.
In addition, the JFC noted that net FDI inflow into the Philippines remains very low compared to five other ASEAN countries in the most recent report of UNCTAD.
"While many factors explain this situation and there is good reason to expect the amounts to rise in 2013 and thereafter, a Negative List that is too negative is one of the factors effecting FDI that can be further liberalized," the statement said. …