NEDA seeking Palace green light for foreign investment negative list liberalization
THE Office of the President has been requested to order executive agencies to fast-track the implementation of the proposed new Foreign Investment Negative List (FINL), which opens more areas of the economy to foreign investment.
Socioeconomic Planning Secretary Ernesto M. Pernia said he asked the Office of the President last month to issue a memorandum circular ordering government agencies to effect the speedy implementation of more permissive foreign ownership rules, ahead of the actual approval of the FINL.
“I asked the Executive Secretary to come up with a memorandum,” Mr. Pernia told reporters on the sidelines of a news conference on the third quarter economic growth results yesterday.
“The message there is [for] pertinent government agencies to fast-track what they have to do in terms of liberalizing the items that are proposed for easing, and also for the agencies to be able to determine what can be eased right away versus those that need legislation,” he added.
Mr. Pernia said that the Executive Order on the 11th FINL is still awaiting the President’s approval.
He said that the proposed FINL — a list of industries that are either closed to or restrict foreign ownership — includes “about eight to 10” sectors.
Some sectors under the proposed new list will allow up to 100% foreign ownership, while some will be limited up to 49%, according to Mr. Pernia.
Mr. Pernia said that the industries where foreign ownership rules have been eased include the employment of professors from foreign universities, public utilities including the telecommunication sector, and foreign contractors on government projects.
In earlier interviews, Mr. Pernia said that the list would also feature the lowering of the paid- in capital threshold for foreign retailers to $ 200,000 from the current $2.5 million.
Some of the sectors can be liberalized with an Executive Order, while some will require Congressional action to amend existing laws, or amend the Constitution in the case of public utilities.
Economic managers had said that they will seek to amend Commonwealth Act No. 146, or the Public Service Act, to redefine public utilities in order to allow foreign ownership.
The 10th FINL signed by President Benigno S. C. Aquino III last year bars foreign involvement in the practice of all licensed professions; retail; cooperatives; private security agencies; small- scale mining; utilization of marine resources; the ownership, operation and management of cockpits; and the manufacture, repair, stockpiling and/or distribution of nuclear weapons.
Foreigners meanwhile can own up to 25% of private recruitment companies for local or overseas employment and firms involved in the construction and repair of works like infrastructure and foreign-assisted projects. The list of areas where foreigners can own up to 30% are: advertising; exploration, development and utilization of natural resources; private land; public utilities; education; rice and corn administration; financing and investment companies; suppliers to state-owned corporations and agencies; defense- related structures; public utility franchises; and private domestic and overseas construction contracts.
The list of industries allowing up to 40% foreign ownership include security; defense; those industries that pose a risk to health and morals, such as gambling, bath houses and massage clinics; and certain small- scale and mediumsized enterprises. —