By Hannah Torregoza
Senator Imelda Josefa “Imee” Marcos on Sunday said it was time to amend the Foreign Investments Act of 1991, and ease restrictions on foreign direct investments (FDIs) to attract more multinational companies to the country.
Senator Imee Marcos (Senator Imee Marcos Official Facebook Page / FILE PHOTO / MANILA BULLETIN)
Marcos said this what she asserted during the public hearings held by the Senate Economic Affairs Committee, which she chairs, when they began hearing the various measures on the matter last September 23.
There are at least three bills seeking to liberalize foreign investments that are pending before the committee. This includes her own Senate bill No 1024 or the Act Promoting Foreign Investments, Amending Republic Act No. 7042.
Marcos said the country needs more start-ups that can generate hundreds, if not thousands, of jobs locally and multi-national corporations are the biggest sources of jobs in the country and elsewhere.
“The current law needs an update considering that it has not kept up with the rise of online business and the evolution of modern business practices,” Marcos added.
The senator noted that southeast Asia was seeing FDI growth in digital infrastructure, data centers and e-commerce, thus, her bill seeks to include online businesses among the domestic market enterprises allowed as much as a 100 percent ownership.
“Classifying businesses as domestic market enterprises will encourage greater Filipino participation,” Marcos said.
The senator is also eyeing higher foreign ownership ceilings in the construction and retail trade sectors, which have seen marked growth in the region.
She said the current 60-percent Filipino ownership restriction curtails foreign investment in construction.
The retail trade sector was also restrictive due to the required paid-up capital of more than $2.5-million for foreign investors.
“Such restrictions made the Philippines a relatively unpromising destination,” Marcos lamented.
The Philippines, she said, got only $9.8-billion or 6.6 percent of the total $149-billion in FDIs in Southeast Asia last year. In contrast, Singapore cornered more than half ($78-billion) of FDIs in the region, followed by Indonesia ($22-billion), Malaysia ($19.3-billion), Vietnam ($16-billion), and Thailand ($10-billion).
According to the Bangko Sentral ng Pilipinas (BSP), lower Philippine FDI’s were recorded in the first half of 2019, amounting to P3.6-billion or 38.8 percent less than the $5.8-billion recorded a year earlier.
“The government’s ‘negative lists,’ which name business sectors where foreign ownership is limited, can be more responsive to economic trends if updated annually instead of every two years,” Marcos said.