Philippines Relaxes Investment Rules to Woo Foreign Capital
Manila. Philippine President Rodrigo Duterte has signed an executive order further liberalizing investment rules to lure much needed foreign capital and help boost economic growth.
The order removed ownership restrictions and further opened certain sectors and activities to foreigners to get more investment flows into the country, in step with Duterte's promise to make the Philippines more competitive.
Under a new version of the government's "negative list," foreigners would now be allowed to invest up to 40 percent of equity in contracts for the construction and repair of locally-funded public-works projects, up from 25 percent.
The new rules, which will take effect 15 days after their publication in a newspaper, also raised the cap on foreign ownership of private radio communications networks from 20 percent to 40 percent.
The updated list also allows full foreign ownership of the following business and activities: internet businesses, teaching at higher education levels, training centers, adjustment, lending and financing companies, investment houses and wellness centers.
"All told, these are still marginal improvements in our effort to attract foreign direct investments. If we really want to be sufficiently competitive with our Asean neighbors, more drastic amendments in our restrictive laws are called for," Economic Planning Secretary Ernesto Pernia said in a statement.
Despite being one of Asia's fastest growing economies, the Philippines lags regional peers in terms of attracting foreign direct investment because of foreign ownership restrictions, high power costs and poor infrastructure.
Foreign direct investment hit a record $10 billion in 2017, central bank data showed, but the figure pales in comparison with those it has for Vietnam ($14 billion) and Indonesia ($21 billion).
Reuters
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