Rules for economic reform laws sought

By Revin Mikhael D. Ochave, Reporter

FOREIGN business chambers are pressing the government to immediately issue the implementing rules and regulations (IRR) of recently signed laws amending the Public Service Act (PSA) and Foreign Investment Act (FIA) before President Rodrigo R. Duterte steps down from office by end June.

“Consistent with the aim of Executive Order 166, which adopts the Economic Development Cluster’s 10-point policy agenda for pandemic recovery, to speed up and sustain the country’s recovery from the coronavirus disease 2019 (COVID-19) pandemic, we call on relevant government agencies to ensure that the IRRs on Republic Act (RA) 11659 and RA 11647 are also issued, with sufficient stakeholder consultation, before the end of the current administration,” members of the Joint Foreign Chambers (JFC) said in a statement on Monday.

Mr. Duterte last month signed RA 11659, which amends the 85-year-old Commonwealth Act No. 146, or the PSA Act, easing restrictions on full foreign ownership of businesses in key sectors such as telecommunications, shipping, airlines, railways and subways.

He also signed into law RA 11647, which amends the Foreign Investment Act in order to make the Philippines more attractive to foreign investors.

“We share this administration’s thrust to propel the country’s economic recovery post pandemic through the enactment of game-changing economic liberalization laws,” JFC said. “Prompt issuance of IRRs for these laws would hasten the realization of gains expected from the passage of these liberalization laws, to the benefit of the public.”   

Foreign business groups have been pushing for the passage of these measures, along with RA 11595 or the amendments to the Retail Trade Liberalization Act, to attract foreign capital needed to drive Philippine economic recovery from the coronavirus pandemic. The rules enforcing it were released last month.

Foreign chambers said the Philippines would benefit from the capital, technology  and increased competition that come with these economic reform measures, adding that this would bring more jobs and better products and services.

“The members of the JFC express strong support for the full implementation of these new laws and pledge our efforts to bring the reforms to the attention of appropriate firms in our member countries in the United States, Australia-New Zealand, Canada, Korea, Japan, and Europe and encourage these firms to invest in the Philippines,” they said.   

John D. Forbes, American Chamber of Commerce of the Philippines, Inc. senior adviser, said in a Viber message the group is waiting for public consultations on the implementing rules. 

“We appreciate being invited to comment on the draft implementing rules and regulations, which is a good universal practice in all countries, to obtain views of the private sector before new rules become final. During these public consultations, we often make suggestions. When the IRRs are final, we can better propagate the new reforms abroad to potential investors,” Mr. Forbes said.   

Lars Wittig, European Chamber of Commerce of the Philippines president, said in Viber message the group is hoping the rules would follow “the spirit of the law” and that there “will be no bureaucratic or other layers to complicate and discourage foreign direct investments in the Philippines.”

“We look forward to the business community and other relevant stakeholders participating in the consultations of the implementing rules and regulations to ensure that all possible inputs are taken into consideration as the measures are implemented,” he added.

In a Viber message, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the National Economic and Development Authority (NEDA) would be the lead agency in drafting the rules.

“We will announce (the start of the consultations) when available,” Mr. Chua said, without giving details.

The amended Public Service Act allows 100% foreign ownership will be allowed in key sectors such as telecommunications, airlines, railways and shipping, which were previously covered by the 40% foreign ownership limit set by the Constitution.

Changes to the Foreign Investment Act allow international investors to set up and fully own domestic enterprises, including micro, small and medium enterprises in the country.

Foreign nationals can now set up these companies with a minimum paid-in capital of $100,000, provided they meet certain conditions.

The JFC statement was signed by the American Chamber of Commerce of the Philippines, Australian-New Zealand Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce & Industry of the Philippines, Korean Chamber of Commerce of the Philippines and Philippine Association of Multinational Companies Regional Headquarters, Inc.