Trade and Industry Secretary Ramon M. Lopez yesterday said the 90 serious investment leads that are expected to come on stream in a year in the country are no longer concerned with restrictive economic provisions.

Lopez said this at the House of Representatives 9th Regular Meeting on Constitutional Amendments on the Proposed Charter Change on Economic Provisions in the 1987 Constitution even as he urged the legislators to be “mindful of the timing” of the proposed amendment to the economic provisions of the 1987 Constitution.

“For the 90, these are already the companies that have indicated, not only their intention but their decision to invest in the country. These are companies that have actually hurdled or not concerned already with economic provisions because they have already decided to come in,” he said. Those that cited economic restrictions are those that have not come or not even indicated, he said.

But Lopez also estimated that the 90 serious investors that are likely to realize their entry in a year could just be half of what could have been because they had been discouraged by the foreign equity restrictions and land ownership concerns.

“Maybe this is just one half of what could have been,” said Lopez adding that these potential investors are usually in the retail trade, public services and a couple of interest on higher learning/education, and construction.

Lopez, however, said that the restrictive economic provisions of the Constitution are in the top three concerns among investors. Other factors raised by investors include high cost of electricity and ease of doing business.

The trade chief, who is also chairman of the Board of Investments – the country’s premier investment promotion agency -- also said that foreign investors are concerned about their ownership because as capitalists they want to have majority control of the company and be the decision maker.

That is why he is in favor of further liberalizing the economy. But, along with Finance Secretary Carlos G. Dominguez, Lopez urged the legislators to prioritize what is doable given the short remaining months of the Duterte administration.

Both Secretaries have been pushing for the passing of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which has remained pending at the bicameral committee as both houses could not agree on some specific provisions.

“We implore this Honorable body to be mindful of the importance of timing given the urgent need to re-start and accelerate the economic growth of the country,” said Lopez in his opening speech.

He said that Department of Trade and Industry has always been in favor of reasonably opening up the economy and liberalizing as many restrictions that hinder the continuous and fast growth of the economy.

While the Philippines has been recognized as the second fastest growing economy in Southeast Asia until the year 2019, right before the pandemic struck, with average growth of over 6 percent for 14 consecutive quarters, such growth rates could have even been much higher if  the basic restrictions as to foreign ownership of businesses in certain sectors stipulated in the Constitution have been removed.

Eliminating these barriers will certainly unleash the high growth potential of the Philippines, as it will facilitate the entry of more investments that will modernize sectors, bring in technology & new capital flows, foreign exchange, improve cost efficiencies and generate jobs. There are also productivity gains that could arise from the diffusion of knowledge & technology from foreign investors to domestic companies & workers. FDI also play a vital role in deepening our participation in the global value chains of multinational enterprises.

“Our Constitution poses several obstacles for the entry of foreign investments in some of our essential industries. For one, restrictions in the ownership and operation of public utilities stunts the technological development and modernization of the sector at the cost of losing much needed efficiencies and cost reduction in logistics,” he said.

The same is true on the practice of foreign professionals in the country and full Filipino ownership for mass media.

But he also stressed that “We are just mindful of the current challenges brought about by the pandemic, including the nearing 2022 presidential elections that might affect the focus, nature and pace of the deliberations, but we leave that concern to the wisdom of our legislators.”

With this limited time left, Lopez has reiterated his call for legislators to look with favor the ongoing legislative actions that will likewise open the restrictions, such as the modifications to the Retail Trade Liberalization Act and the New Public Service Act, if only to improve investment inflows in the country and equalize opportunities with Asian neighbors.

He said that modifying the current Retail Trade Liberalization Act will boost foreign investments in the Philippine retail industry through amendments that lower the minimum paid-up capital requirement for foreign-owned businesses. This would give the country greater access to diverse

consumer products, more competition among retailers, more retail market access and lower entry cost for MSME products and services, further technology and skills transfer, and additional jobs for Filipinos.

Meanwhile, liberalizing the present Public Service Act by refining or limiting what constitute a public utility may take certain industries out of the coverage of the Constitutional limitations on foreign ownership.

Fortunately, he said, the game changer CREATE bill is now at the bicameral stage of Congress.