Is PH foreign investor friendly? : A look at its National Economic Policies and Bureaucracy

The tussle over the decision of the Aquino administration to continue the country’s restrictive investment system for foreign investors as contained in the recently issued Ninth Foreign Investment Negative List (FINL) taking the Philippines in a question if it’s really foreign investor friendly.

Foreign business chambers want the government to make its Foreign Investment Negative List (FINL) “less negative,” claiming the little has been done over the last two decades to open up protected sectors.

The latest negative list detailed in Executive Order 98 last month did not ease the restrictions in foreign capital and professional practice but was also incorrectly worded.

The “negative list” is considered real estate and psychological and respiratory therapy as industries where foreign investment or ownership are not allowed or limited.

In a statement of the Joint Foreign Chambers (JFC), if this would continue for the 10th FINL to be issued two years from now, Philippines would lose foreign investors that are headed for the region. 

Indeed, the list which is revised every two years has seen just two major changes since the approval of the 1991 Foreign Investments Act: the 2002 Retail Trade Liberalization Act, which opened the sector to investors putting in at least $2.5 million, and the 2010 FINL (the 8th), which allowed 100% foreign equity in gambling ventures inside the government-administered economic zones.

Whereas the introduction of the FINL in 1991 was described as having improved transparency, over the years it “rarely contains any significant reforms”. It also noted that restrictions on banks are not covered by the list since the sector is governed by separate legislation.-Read More at Agora.ph (November 20, 2012 6:28PM)