MANILA, Philippines — The Philippines is among countries that have restrictive policies on investments in the health sector in Asia Pacific, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
In its Asia Pacific Trade and Investment Trends 2022/2023 report, the ESCAP said the region is one of the most restrictive areas for foreign direct investments (FDI) in the health sector, citing surveys undertaken by the United Nations Conference on Trade and Development last year.
The Philippines together with nine other countries in the region impose FDI restrictions. The list includes China, India, Indonesia, the Lao People’s Democratic Republic, Malaysia, Mongolia, Thailand, Vietnam and Myanmar.
For the Philippines, the restrictions are in the form of conditional entry requirements.
“Export performance requirements are set on foreign ownerships in the health sector in the Philippines,” ESCAP said.
While there are conditions for entry of foreign investments in the Philippines, investors in the healthcare and wellness services could enjoy fiscal and non-fiscal incentives offered by the government, including income tax holidays, duty-free importation of medical equipment as well as hiring of foreign nationals and special residency visas.
Apart from the Philippines, ESCAP said Vietnam also sets entry requirements in specific sectors of the health sector.
On the other had, Indonesia, Lao PDR, Malaysia and Myanmar imposed a ban on FDIs in certain regions or subsectors of the health sector.
As for India, Indonesia, Lao PDR, Myanmar, and Thailand, ESCAP said there are foreign ownership ceilings and joint venture requirements.
The greenfield FDIs in the health sector in the region plunged 49 percent in 2021 from 2008.
According to ESCAP, the decline in investments in the sector started after the financial crisis in 2009. It started to recover in 2012 but dropped again in 2015 and 2019.
“More recently, the general downward trend in FDI levels during the past five years, combined with dramatic declines in greenfield investments since the start of the COVID-19 pandemic, have driven the slide in FDI into the sector,” ESCAP said.
To increase the investments received by the region in the health sector, ESCAP said there is a need to address challenges such as poor regional and domestic investment ecosystems, lack of capital, technology, skills, low regulatory capacity, and poor infrastructure and related services.
“Addressing these challenges is an essential first step in creating the needed investment environment and necessary safeguards to ensure the best possible results from investments in the health sector,” ESCAP said.
The recommended actions of ESCAP include the establishment of coherent policy and transparent regulatory institution such as streamlining regulations and ensuring sustainable investment.
Governments in the region, ESCAP said, would also need to invest in skills development, technological capacity and health infrastructure to make their respective countries more attractive for health investments.
In addition, ESCAP added there is a need to build partnerships and cooperation for the development of the health, pharmaceutical and vaccines sector for the entire region, including creating foreign linkages.
ESCAP said increasing investments in the health sector will not just enable the region to address challenges from the current pandemic, but also ensure readiness to respond to future pandemics.
“Overall, investment in the health sector can ensure that countries are not just building back better, but also stronger,” ESCAP said.