By Melissa Luz T. Lopez
THE EXECUTIVE BRANCH will pitch a fresh proposal to the next Congress to lift foreign ownership limits under the 1987 Constitution, the head of the Finance department told reporters last week.
Citing still- “very restrictive” policies on foreign investments, Finance Secretary Carlos G. Dominguez III said: “We are working on getting a proposal to Congress so that we can hold a constitutional convention, not so much to focus on the political side… but actually the more important part, which is the opening up of investments.”
The House of Representatives approved a draft constitution last year, but it was for a shift to a federal form of government. The Senate did not follow suit.
The Finance chief said the department was reviewing the chamber’s proposal, but noted the narrowing window for legislation under the 17th Congress.
The current Congress, now on a Feb. 9-May 19 break for the May 13 mid-term elections, will have the May 20-June 7 session days left to act on any concern. Any bill that fails to bag legislative approval within that period goes back to square one in the 18th Congress that starts in late July.
Mr. Dominguez said the Executive branch has tried to loosen foreign ownership limits administratively, via the new Foreign Investment Negative List signed October last year that opened up Internet businesses, insurance and financing companies and public works to bigger foreign participation.
However, core restrictions remain in the country’s charter — foreigners can hold only up to 40% in companies that operate public utilities; supply materials and goods to state-run firms, government agencies and municipal corporations, to name a few.
“[O]f course we want a regime that will introduce more competition in the Philippines — that was the comment of the World Bank,” Mr. Dominguez explained.
Last week, the multilateral lender said lifting anti-competitive regulations will help boost economic activity, noting that the Philippines is currently more restrictive than its regional competitors.
He clarified, however, that foreign investments account for just around 15% of the total: “Foreign investment is nice, but that’s icing on the cake.”
“That is not what’s going to make this country move forward — it’s the domestic investments.”
Foreign direct investments stood at $9.061 billion as of end-November, 3.2% less than the $9.358 billion investments in 2017’s comparable 11 months. The central bank projects foreigners to invest another $10.2 billion in the Philippines this year, expecting strong appetite as inflation has been easing, while government spending and household consumption have remained robust.