DTI showcases FIA to counter EU threat

We in the economic team have always been in favor of reasonably opening up the economy

Instead of a political response, the Philippines gave the European Union (EU) an economic carrot and stick through Republic Act 11647 that President Rodrigo Duterte recently signed into law to amend the Foreign Investments Act (FIA) to improve capital flow to the country.

The amended law offers less stringent requirements for potential foreign investors who wanted to do business locally.

Trade Secretary Ramon Lopez said the new law will encompass more sectors to encourage more investments.

“We in the economic team have always been in favor of reasonably opening up the economy and liberalizing the many restrictions that hinder the continuous and fast growth of the economy,” he said. The signing of the law was timely since the country is facing possible sanctions from the EU based on a political play.

A representative of the EU sought from government a progress report on more than 25 pressing concerns found by the European Parliament for it to retain Generalized Scheme of Preferences plus (GSP+) privileges.

Solo move

The GSP+ perks is a unilateral trade arrangement that offers zero tariffs on 6,274 Philippine products since 2014 and is set to lapse in 2023.

The incentives are currently in limbo as the EU Parliament urged the European Commission last month to temporarily withdraw the Philippines’ benefit from the scheme if the government does not swiftly resolve the concerns raised.

Among issues that the EU Parliament raised include the strong condemnation of thousands of extrajudicial killings and other human rights violations related to the war on drugs and a halt to government officials’ practice of red-tagging activists, journalists and critics.

With this, EU Ambassador to Manila Luc Véron arrived last 28 February in Manila for a five-day working visit to review the country’s compliance with 27 United Nations and International Labor Organization conventions, a key factor to retain its GSP+ perks.

“The effective implementation of international commitments on trade and sustainable development forms the basis of the Philippines’ privileged access to the EU market. We have been working together with the Filipino government since the country joined the scheme in 2014,” Véron said in a statement.