THE National Economic and Development Authority (NEDA) said that President Rodrigo R. Duterte is expected to sign the upcoming 11th Foreign Negative Investment List (FINL) “soon.”
NEDA submitted the draft Executive Order (EO) to the Office of the President “two months ago.”
“We have proposed to the President who wanted actually to liberalize the current foreign investment negative list. We have already drafted an EO, and that EO is ready for signing. It will be signed pretty soon,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a media briefing on Thursday in Pasig City.
“The coverage of the reduction of restrictions in the FINL includes: private recruitment whether for local or overseas employment, practice of particular professions — we’re allowing foreign participation down to the benefit to the public; contracts for the construction and repair of locally funded works, projects — remember before foreign contractors cannot participate in locally funded projects but now that will be eased,” Mr. Pernia said.
“And then public services except activities and systems that are recognized as public utilities such as transmission and distribution of electricity and sewerage pipeline system. In other words, telcos will be out… they’re not public utilities,” he added.
Mr. Pernia also noted that the upcoming negative list will ease restrictions on foreign ownership in industries like culture; production, milling and processing, trading, except retailing of rice and corn, and trading in rice and corn and by-products; teaching higher education, and the retail trade.
“Some of these have to be legislated. But there are bills in Congress already… some of them in advanced stages. That will allow us to liberalize these other items. For others that need constitutional amendments — we did not include those,” Mr. Pernia said.
The liberalization of foreign ownership rules is expected to boost foreign direct investment.
Current prohibitions on foreign participation apply to licensed professions, retail, cooperatives, private security agencies, small-scale mining, enterprises that involve the utilization of marine resources, the ownership, operation and management of cockpits, and manufacture, repair, stockpiling and/or distribution of nuclear weapons.
Foreigners can take stakes of up to 25% in private recruitment firms for local or overseas employment and companies that construct and repair locally funded public works like infrastructure.
Areas where foreigners can own up to 30% are: advertising; companies that explore, develop and utilize natural resources; private lands; public utilities; education; rice and corn administration; financing and investment companies; suppliers to state-owned corporations and agencies; defense-related structures; public utility franchises; and private domestic and overseas construction contracts.
The industries allowing up to 40% foreign ownership include security; defense; those industries that pose a risk to health and morals, such as gambling, bath houses and massage clinics; and small-scale and medium-scale enterprises of a certain size. — Elijah Joseph C. Tubayan
