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Capital flight feared from DOJ’s ruling


THE government runs the risk of alienating foreign investors if it will treat airfreight-forwarding firms as public utilities, the European Chamber of Commerce of the Philippines said on Friday.

The ECCP, reacting to a recent Department of Justice opinion on airfreight firms, also said this opinion clearly indicates the justice department’s “shifting” position, given the fact that the department in 1975 and 1999 noted that “an airfreight forwarder is an indirect air carrier and in the same manner as foreign airlines, which are engaged in direct air transportation between the Philippines and other points outside the country, is not subject to the nationality requirement.”

Henry J. Schumacher, executive vice president of the ECCP, said there is no question that airfreight forwarders, acting as indirect air carriers, are neither serving the general public nor are they a franchise utility.

“The consequences of a different interpretation of law would have far-reaching consequences,” he said.

Schumacher said that if the justice department’s opinion is not going to be revised, international airfreight forwarders with more than 40 percent foreign shareholdings face cancellation of their license to operate with the Civil Aeronautics Board (CAB).

“Actions like these not only discourage investments in the country but rob existing investors of their fruits of labor and investment,” he said.

Schumacher noted that some of these investors have allocated huge amounts of investments over a long period of time, with some even for more than 25 years on the assumption of a stable investment climate and based on conventional wisdom and interpretation of laws that have been unchanged for the past 29 years.

The justice department’s opinion also runs counter to the policy of the government to develop the country into a global logistics hub, he said.

“FedEx, DHL or UPS will be delighted to sell part of their shareholding and hand over the management of their companies to Filipinos. But they may also consider moving their investment somewhere else,” Schumacher said.

The biggest problem for investors in the Philippines is not the law or the Constitution, he said, adding it’s the liberal, shifting and often self-serving interpretation of law, which continues to create havoc on the investment climate.

“We maintain that the DOJ’s Opinion No. 29 needs to be revisited, in order to meet the government’s goal of asserting the Philippines into the logistics industry and international trade as a whole,” Schumacher said.

Paul Anthony A. Isla

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