February 27, 2019
OSAKA—Three major policy reforms that are already undergoing legislative process will assist foreign investment in the Philippines, said the National Economic and Development Authority.
“Besides our growth story that tells of the Philippine economy’s higher growth trajectory, there are several policy reforms already in place to accommodate more foreign investors in the country. These are the amendments on the Retail Trade Act, the Foreign Investment Act, and the Public Utilities Act, which are all near passage in Congress,” said Socioeconomic Planning Secretary Ernesto M. Pernia.
He mentioned this before a group of Japanese businessmen during the Philippine Economic Briefing (PEB) Osaka leg, which was held on February 22, 2019.
First of the three is the amendment of the Retail Trade Liberalization Law, which seeks to do away with barriers to foreign investments by easing the equity and capitalization requirements to create a more favorable investment climate in the country.
“This should improve investments in the manufacturing sector, including small and medium-sized enterprises (SMEs),” said Pernia.
House Bill 4595 and Senate Bill 1639, both amending Republic Act No. 8762 or the Retail Trade Liberalization Law, are at the Committee levels.
“We are also proposing modifications in the Foreign Investment Act to reduce the threshold for foreign investors investing US$100,000 in SMEs from 50 to only 15 direct employees. It also proposes to exclude ‘practice of professions’ from the coverage of the Foreign Investment Act,” he added.
Moreover, the government is pushing to amend the Public Utilities Act.
Senate Bill 1754, which will amend Commonwealth Act No. 146 or the Public Service Act, is now pending in Second Reading. It proposes that the transmission of electricity, distribution of electricity, and water works and sewerage systems shall make up the exclusive list of public utilities.
Pernia also discussed growth prospects for 2019, highlighting the downtrend in inflation that will result in higher household consumer spending as well as government spending.
“This would have a stimulus effect on the economy in terms of further growth, especially so that we expect more approved big-ticket infrastructure projects to be implemented this year,” he said.
“What is more, with the passage of the Ease of Doing Business Law and 11th Foreign Investment Negative List, we expect investors to pick up further, which should bring in more spending, and therefore sustain growth at a higher level,” Pernia added.
Pernia was joined by Philippine economic managers and key members of the Duterte administration’s Build, Build, Build team, as well as Philippine private sector representatives at the Osaka PEB.