New FDI negative list out next month

July 14, 2017 at 13:30

New FDI negative list out next month

By Elijah Joseph C. Tubayan | Posted on July 13, 2017


THE GOVERNMENT expects to issue its 11th foreign investment negative list (FINL) next month, an economic manager and close associate of President Rodrigo R. Duterte said late last Tuesday.

“By about the middle of next month,” Finance Secretary Carlos G. Dominguez III told reporters in Makati City when asked when investors can expect the update on sectors and economic activities where foreign participation is restricted.

“We are waiting for the comments of everybody, and from there we will move ahead with the revision of that negative list,” he said, adding that the review began in May, as announced in a briefing for businessmen in Tokyo in October last year.

Mr. Dominguez had said then that the government “will be opening areas to investments that have been administratively limited, and this will be done in May 2017.”

It will be recalled that the existing 10th FINL — issued on May 29, 2015 — was little-changed from previous versions since the Constitution identifies activities and sectors like public utilities and mass media where foreign participation is prohibited.

“We are looking at that very closely… we have to get a consensus of all the members of the economic team of the Cabinet,” Mr. Dominguez said.

Socioeconomic Planning Secretary Ernesto M. Pernia told reporters separately at the National Economic and Development Authority (NEDA) headquarters in Pasig City on Monday that economic managers are looking where foreign ownership restrictions can be relaxed without legislation.

“The President’s preference is up to 70% foreign ownership and 30% local ownership for utilities,” Mr. Pernia told reporters on Monday at the NEDA headquarters in Pasig City.

Mr. Dominguez said the administration will explore relaxation of such restrictions “provided it’s allowed by law and the Constitution.”

“The only limitation we have there is… what is legislated and what is in the Constitution: that is the only limit because we’re only reviewing those things that can be done administratively.”

Mr. Pernia added that the Executive may also ask Congress to revise relevant laws without touching the Constitution, whose amendment involves a tedious process.

“There’s a move to revise the Public Service Act so that utilities, telecommunications, can be redefined so that they will not be in negative list,” Mr. Pernia said, referring to the outdated Commonwealth Act No. 146 of 1936 and subsequent amendments.

Mr. Dominguez said the proposal under House Bill No. 4389, authored by former president and now House Deputy Speaker Rep. Gloria M. Arroyo of Pampanga’s second district, “is a pretty interesting bill.”

“If you change the definition… what a public utility is… then you might be able to open (that sector),” Mr. Dominguez said.

“We… look forward to the FINL becoming more positive by being less negative,” John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines, said in a mobile phone message.

“We look forward to further shortening of the list, especially in the public services sector.”


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