The European Chamber of Commerce (ECCP) has reiterated its call to relax the rules on areas restricted to foreign investors after the issuance of a Palace fiat expanding the economic activities restricted to Filipinos.
The business group has yet to study Executive Order (EO) 98, but ECCP President Michael Raeuber said: "In general, we are for opening of markets and liberalizing the so-called negative list."
EO 98, or the Ninth Regular Foreign Investment Negative List, enumerates the industries and activities that are open to Filipino businessmen, and defines the extent of participation of foreign investors in areas allowed by specific laws and the Constitution.
Among the amendments include restrictions on the practice of non-Filipinos in the areas of real estate (as provided by Republic Act 9646), respiratory therapy (RA 10024) and psychology (RA 10029), unless there is a reciprocity arrangement prescribed by law.
Foreign ownership in lending companies was limited to 49% in pursuant to RA 9474, or the Lending Company Regulation Act of 2007.
Further restrictions in the EO seem to be "going in the opposite direction of liberalization," Mr. Raeuber said.
Former ECCP President Hubert d’Aboville agreed, saying the restrictions limit job opportunities for Filipinos.
"The more you reduce (opportunities), the more you limit, the more you stop foreign investments. If you reduce foreign investments, you reduce the capacity of creating jobs," he said in a separate phone interview. "We have to favor all we can. Whether ownership is from Japan, Korea, Thailand and from the UK, what is important is how many jobs are created," he added.
Mr. d’Aboville, meanwhile, supports the provision on reciprocity. "It has to be a two-way street. It has to be a bilateral agreement between two countries," he said.
EO 98, signed by President Benigno S. C. Aquino III on Oct. 29, replaces EO 858 that has been in effect since February 2010.
Other areas were foreigners are prohibited or limited by the Constitution or laws include mass media, practice of all professions, cooperatives, private security agencies, small-scale mining, private radio communications network, private recruitment for local or overseas employment, advertising, ownership of private lands, lending companies, financing companies and investment houses regulated by the Securities and Exchange Commission (SEC).
This list may be amended to reflect changes brought about by new law.
Under the Foreign Investments Act of 1991 (RA 7042), foreign investors are allowed to own 100% equity in businesses excluded from the negative list.
EO 98 takes effect 15 days after its publication in a newspaper of general circulation.
Source: Business World; The Economy; 5 November 2012
