CHARTER change (“Cha-cha”) advocate in Congress, Cagayan de Oro Representative Rufus B. Rodriguez, expressed disagreement with a discussion paper released by the University of the Philippines (UP) which claimed that lifting foreign ownership restrictions will not necessarily boost the country’s foreign direct investments (FDI).
The paper published by the UP School of Economics (UPSE) earlier this month stated: “While restrictive equity rules may represent a hindrance to FDI, their potential effects are small and sometimes insignificant in comparison to other explanatory variables such as the ease of doing business, physical infrastructure, and perceived corruption.”— Kenneth Christiane L. Basilio
In a statement on Monday, Mr. Rodriguez argued that lifting the limitations on foreign ownership is a key development in attracting foreign investors and would result in spurring economic development. “These limitations are the root cause of the reluctance of foreign businesses to invest in our country,” he said. — Kenneth Christiane L. Basilio
Further disputing the UPSE paper, Mr. Rodriguez said he does not agree that improving other variables is more important in attracting FDI than opening the economy itself to foreigners.
“I do not agree that the other ingredients for attracting investments are more important than removing foreign equity restrictions in the Charter,” he said,
The UPSE paper said that improving the country’s business environment and infrastructure are variables that can further attract FDI compared to lifting foreign ownership restrictions.
On this, the lawmaker said: “Congress has been addressing other investments-related issues by passing the necessary laws, including the recently enacted Ease of Doing Business Act and the reduction of the corporate income tax and the grant of other tax incentives.”
