Corporate News

By Zsarlene B. Chua, Reporter

Virgin Group’s Branson says Philippines should relax foreign ownership caps

Posted on May 26, 2016

VIRGIN GROUP founder Sir Richard Branson on Wednesday said the Philippines should relax foreign ownership restrictions in order to attract more investments from international companies.

Sir Richard Branson speaks at ABS-CBN News Channel’s Asian Innovation and Leadership forum at the Sofitel Philippine Plaza in Pasay City on May 25. -- COURTESY OF ABS-CBN
“(The country) is dominated by 20 very big corporations (and) it’s difficult for foreign companies to invest in many sectors here and I’m not sure it’s necessarily in the interest of the corporations here,” Mr. Branson said during ABS-CBN News Channel’s Asian Innovation and Leadership forum at the Sofitel Philippine Plaza in Pasay City.

“Protectionistic laws (mean) you don’t get enough competition and consumers don’t benefit from the competition and the big companies that are protected don’t feel hungry -- they don’t run themselves as well as they would with competition,” he added.

The Philippines is considered to have one of the world’s most restrictive regimes for foreign direct investments (FDI), according to the Organization for Economic Cooperation and Development’s investment policy review of the country released earlier this month.

The Constitution limits foreign ownership to 40% in key industries and economic sectors such as telecommunications, transport and electricity public utilities; agriculture, fisheries and forestry; construction; advertising; private radio networks and real estate.

Incoming president Rodrigo R. Duterte had earlier said he is open to amending the Constitution to ease these restrictions.

“There are things we are doing in this region like health clubs and radio stations and airlines... One day I’d love to come here and see (about) bringing some ‘Virgin magic’ here,” Mr. Branson said, referring to his company.

The Virgin Group is composed of more than 400 companies with its core business areas ranging from travel, entertainment and lifestyle, transport, health, and media and communications.

The British billionaire and philanthropist also expressed his thoughts on Mr. Duterte’s proposal to bring back the death penalty as part of his war against crime, particularly illegal drugs. The death penalty was abolished in 2006 under then-president Gloria Macapagal-Arroyo.

Mr. Branson has been an advocate in decriminalizing drug use globally, noting the “war on drugs has been a complete failure” on curbing either supply or demand.

Rather than sending people with drug problems to jail, he said it will be better to provide them with help to overcome their addiction.

“Death penalty is not a doesn’t work that way,” Mr. Branson said. “I hope the new government rethinks (death penalty).”

On the issue of bribery, Mr. Branson said business leaders should set the example, noting if they do not bribe public officials, then public officials will stop expecting it.

“This seems to be one area that needs to be (addressed) in this country in order for it to become a true democracy -- you have to get the rule of law sorted,” he said.