Duterte eases restrictions on foreign equity
President Duterte has relaxed restrictions on foreign participation in some investment areas such as Internet business, financing and investment companies, and locally funded public works in a bid to stimulate economic growth.
In Executive Order No. 65, the President approved the 11th Regular Foreign Investment List covering investment areas or activities that are open to foreign investors and/or reserved to Filipinos.
The issuance of the new list was “consistent with the policy to ease restrictions on foreign participation in certain investment areas or activities,” the order read.
Under EO 65, the President allows 40 percent foreign equity in contracts for the construction and repair of locally funded public works, except for infrastructure/development projects covered in Republic Act No. 7718 and foreign-funded or assisted projects that require international bidding.
The government previously allowed only up to 20 percent foreign participation in these locally funded public works.
“While the cited area of liberalization is not exclusively intended for the Build, Build, Build program of the government, we accorded due consideration to the reality that construction is one of the most important sectors today in view of the demand arising from the said program and the support given by the Filipinos to it,” Presidential spokesman Salvador Panelo said in a statement.
Duterte has also eased the foreign ownership of private radio communication networks to 40 percent from 20 percent.
100% foreign participation Following the President's issuance of EO 65, the National Economic and Development Authority (NEDA) identified five investment areas that are now allowed 100 percent foreign participation.
These are Internet business, which has been excluded from mass media; teaching at higher education levels provided the subject taught is not a professional subject; training centers engaged in short-term high level skills development; adjustment companies, lending firms, financing companies and investment houses; and wellness centers.
Panelo said the latest investment list was meant “to liberalize as many sectors as possible to keep up with domestic and global demands, and designed to be consistent with the policy of easing restrictions on foreign participation in certain industries or activities.”
“The list is a product of extensive discussions and we made certain that the same is in accordance with our Constitution,” he added. No foreign equity The government, however, imposed the “no-foreign equity” rule on 11 investment areas. These are mass media, practice of certain professions, retail trade enterprises with a capital of less than US$2.5 million, cooperatives, organization and operation of private detective or security agencies, smallscale mining, utilization of marine resources, ownership of cockpits; manufacture, stockpiling and distribution of nuclear weapons; manufacture and distribution of biological, chemical and radiological weapons and antipersonnel mines; and manufacture of firecrackers and other pyrotechnic devices.
Twenty-five percent foreign equity are allowed in private recruitment, whether for local or overseas employment, as well as contracts for the construction of defense-related structures.
Up to 30 percent foreign equity is permitted in advertising.
Apart from locally funded public works and radio stations, the industries where 40 percent foreign participation is allowed are: exploration, development, and utilization of natural resources; ownership of private lands; operation of public utilities, except power generation and supply of electricity; education institutions; production and trading, except retailing of rice and corn; contracts for supply of materials, goods, and commodities to government corporations and agencies; operation of deep sea commercial fishing vessels; and ownership of condominium units.
EO 65 also allowed foreigners to practice some professions in the country provided their home country allows Filipinos to practice the same professions.
Among the professions are accountancy, agriculture and fisheries, engineering, dentistry, interior design, landscape architecture, medicine, nursing, real estate service, and social work.
Corporate practice is also allowed in some professions subject to regulatory conditions.
The professions include aeronautical engineering, environmental planning, forestry, guidance and counseling, psychology, real estate service, and sanitary engineering.