MANILA, Philippines — The Joint Foreign Chambers (JFC) in the Philippines have thrown their support behind amendments to the Foreign Investments Act (FIA) to help the country attract more investors and create jobs.
In a statement, JFC said it is recommending the passage of all amendments being sought in Senate Bill (SB) 2102.
The proposed measure seeks to amend Republic Act 7042 or FIA of 1991 which was enacted to encourage investments from non-Filipinos to boost economic growth, improve productivity through advanced technology, and create more employment opportunities for Filipinos.
“First, it is our view that the practice of all professions is not a germane provision in the Foreign Investment Negative List (FINL), the key document created by the FIA. The FINL is intended to catalog limitations on foreign equity in non-banking business sectors of the country’s domestic market. The practice of profession is not an investment activity under the scope of the FIA and therefore should not be included in the FINL,” JFC said.
As there are certain laws governing each profession to allow foreign nationals to practice in the Philippines under reciprocity arrangements, the JFC is of the view it was extremely misleading to include such items in the FINL as a nationalized activity, as has been the practice for many years until a footnote was inserted in the 10th FINL which informed readers reciprocity provisions existed for most of the professions.
As many Filipinos work abroad and support the economy through their remittances, the foreign business groups said it should be in the interest of the government to ease restrictions on professionals in other countries, as well as in the Philippines.
At the same time, JFC said having more foreign professionals practicing in the Philippines could bring new skills, ideas, connections and integration into global networks of service providers, and support sunrise sectors like research and development, medical travel, and retirement, as well as benefit Filipino professionals in terms of new skills they could use when they work either overseas or in the domestic market.
“In short, more foreign professionals practicing in the Philippines can mean more jobs for Filipinos at home,” JFC said.
JFC also supports SB 2102 which recommends to bring down the required number of employees to 15 to allow 100 percent foreign ownership in domestic market activities as a $100,000 enterprise (a little over P5.4 million) would be unable to sustain a labor force of 50 individuals.
The FIA allows 100 percent foreign ownership in domestic market activities above a minimum investment of $100,000 (with advanced technology or employing 50 direct employees), otherwise $200,000.
JFC likewise supports SB 2102 as Section 2 of the proposed measure adds more clarity to benefits derived from foreign investments such as “sustainable inclusive economic growth, productivity, global competitiveness, employment creation, technological advancement, and countrywide development.”
The bill, particularly Section 5, also embodies a long-standing JFC recommendation to undertake systematic inter-agency review of the FINL.
Under the bill, the National Economic and Development Authority would lead an annual review of the negative list and submit to Congress every April 30 a cost-benefit analysis of the contribution to the economy of the investment areas included therein and recommend to the Congress investment-related matters requiring necessary legislation.