Pernia: FINL may drive FDIs higher by year end

Foreign direct investments (FDIs) in the country are expected to get a boost in November and December due to the release of the recent Foreign Investment Negative List (FINL), Socioeconomic Planning Secretary Ernesto Pernia said Monday.

At a press conference in Pasig City, Pernia said more foreign investors may still come in the last two months of the year given increased opportunities under the FINL.

“If there are investors waiting in the wings for this thing... maybe November and December might still be a window for them to do it,” he told reporters.

Under the first FINL of President Rodrigo Duterte signed late last month, he opened up five activities to 100-percent foreign ownership -- wellness centers, internet business, teaching in higher education, training centers outside the formal education, and adjustment companies, lending companies, financing companies, and investment houses.

According to Pernia, this is expected to drive up investments that will come into fruition by next year.

“I think next year we should see some fruition in terms of foreign investor interest in terms of coming here to invest,” he explained.

Data from the Bangko Sentral ng Pilipinas (BSP) shows that foreign direct investments (FDIs) more than doubled to $914 million in net inflows in July, jumping from the $344 million the same month last year.

“We expect the total for the year to be greater than that of last year,” Pernia said, noting that a bigger jump is expected with the full implementation of the FINL.

“This is even without the liberation yet because I think it will take time for the easing and relaxing of restrictions to take hold, to be absorbed by the foreign investment community,” he explained.

For its part, the American Chamber of Commerce of the Philippines (AmCham) welcomed the recent FINL, but noted that more sectors should be opened up to foreign investors.

“(T)he administration can only do so much without repeal of the many restrictions in the laws and constitutional provisions in the FINL,” John Forbes, senior adviser of the AmCham, said in a text message.

“There is also strong support in the business community to remove restrictions of foreign equity from the 1987 Constitution. We urge Congressional leaders to prioritize such reforms that will strengthen the economy, result in more foreign investment, jobs, and competition,” he added.

Among the reforms pushed by Forbes are the Public Services Act, the Retail Trade Act, and the Foreign Investment Act.

(GMA News Online)