Rodrigo Duterte has directed the National Economic Development Authority (NEDA) to take “immediate steps” to lift or ease restrictions on foreign investment in the Philippines to foster economic growth.
The President signed on November 21 Memorandum Circular 16 ordering the NEDA to exert efforts to ease restrictions on foreign participation in eight investment areas.
These include private recruitment for local and overseas employments; practice of particular professions, where allowing foreign participation will redound to the public benefit; contracts for the construction and repair of locally-funded public works; teaching at higher education levels; retail trade enterprises; and domestic market enterprises.
The order also covers public services, except activities and systems recognized as public utilities such as transmission and distribution of electricity, water, pipeline distribution system, and sewerage pipeline system.
It likewise calls for the easing of government restriction for culture, production, milling, processing, and trading except retailing, of rice and corn and acquiring by barter, purchase or otherwise, rice, corn, and other by-products.
“The members of the NEDA Board are hereby directed to earnestly support, in a coordinated manner, such legislative efforts as may be necessary to eliminate or relax the aforesaid restrictions, including pending legislation seeking to clarify the definition of public utilities,” the memorandum said.
Members of the NEDA Board were urged to support legislative efforts that may be necessary to eliminate the restrictions, including a pending legislation that seeks to clarify the definition of public utilities. It was also directed to immediately advise the President regarding restrictions on foreign participation that may be lifted or eased without legislation
The Constitution puts a limit on foreign ownership in key business at 40 percent. Foreign chambers have urged the government to raise the ceiling to lure more investors.
Socioeconomic Planning Secretary Ernesto Pernia said that with Duterte’s order, the foreign investment negative list (FINL) that will be reviewed by the NEDA Board is likely to be cut by half.
“Maybe half of the
Malacañang said the FINL review is meant to “raise the Philippines’ competitiveness, and to foster higher economic growth in the Association of Southeast Asian Nations region and beyond through joint endeavors in the spirit of equality and partnership.”
The FINL identifies economic activities that are closed to foreign investors or where ownership restrictions have been set by the 1987 Constitution or other laws.
Foreign direct investments were up “quite sharply” in September.
The Philippine economy grew 6.9 percent in the July to September period, making it Asia’s second fastest-growing economy after Vietnam.