By Bernie Cahiles-Magkilat
Joint Foreign Chambers (JFC) has urged for the passage of all the amendments in Senate Bill (SB) 2102, which seeks to liberalize foreign the Foreign Investment Negative List (FINL) particularly on the practice of professions.
The FINL, which is the main document created by the Foreign Investments Act, is intended to catalogue limitation on foreign equity in non-banking business sectors of the country’s domestic market.
On the practice of professions, the JFC said that it is not an investment activity under the scope of the FINL and therefore should not be included in the FINL.
“The Philippine Constitution creates a policy bias in favor of Filipinos, but not a strict legal barrier to the participation of foreign professionals,” JFC said.
There are 47 laws governing the practice of specific professions, and 46 contain “reciprocity” provisions allowing foreigners to practice their profession in the Philippines, provided their countries of origin also allow Filipinos to practice the same. Only the law regulating the practice of radio and X-ray technology remains restricted to Philippine nationals and contains no reciprocity provision. In addition, a Supreme Court rule limits the practice of law to Philippine nationals.
Considering that certain laws governing each profession allow foreign nationals to practice in the Philippines under reciprocity arrangements, it was extremely misleading to include such items in the FINL as a nationalized activity, as was done for many years.
JFC also stressed that because millions of Filipinos work abroad and support the Philippine economy with their remittances, it should be in the national interest to seek the reduction of restrictions on professionals in other countries as well as in the Philippines. For example, in negotiations of the General Agreement on Trade in Services (GATS) under the World Trade Organization and the ASEAN Framework Agreement on Services (AFAS).
At the same time, JFC said that having more foreign professionals practicing in the Philippines can bring new skills, ideas, connections and integration into global networks of service providers, and support sunrise sectors like R & D, medical travel, and retirement. This is a win-win policy, for Philippine professionals to have more opportunities on the world stage and for the domestic market to benefit and be enriched from the skills of foreign professionals.
One of the recommendations in their policy brief is to encourage foreign professionals to practice and invest in creative industries in the Philippines, which is expected to result in technology transfer, foreign investment, and job creation. Malaysia and Singapore have successfully attracted high-quality foreign professionals to work and invest in their countries.
While we do not have current data, even with reciprocity, the number of foreign professionals who have applied to the Professional Regulatory Commission is very low. This is despite the urgent need in the Philippines for more professionals and more technology transfer.
“In short, more foreign professionals practicing in the Philippines can mean more jobs for Filipinos at home,” the businessmen said.
Unlike the Philippines, the foreign business group noted that Singapore, Thailand and Vietnam do not have similar minimum investment or job creation requirements but they receive more FDIs than the Philippines.
Singapore has no minimum investment or job creation requirements. In 2017, it received $62 billion in FDI. Thailand has no minimum investment requirements for foreign investors. In 2017, it received $7.3 billion in FDI. Vietnam does not have no minimum requirement for foreign investors for neither capital nor employment. In 2017, it received $14 billion in FDI.
In contrast, the FIA of the Philippines allows 100 percent foreign ownership in domestic market activities above a minimum investment of $100,000 (with advanced technology or employing 50 direct employees), otherwise $200,000. But the Philippines only received FDIs of $10 billion in 2017.