President Duterte has instructed government agencies to open up a number of business and employment sectors to foreign investment.
The directive, made public today (Thursday, November 23), ordered a move to “take immediate steps to lift or ease restrictions on foreign participation”, including those that will require new legislation.
The directive specified eight areas where changes will be made, including construction and repairs for government-funded projects, private recruitment for both domestic and overseas employment, teaching at higher education levels, as well as processing and “trading except retailing” of rice and corn.
Some of the eight are broad and open to interpretation, such as “retail trade enterprises”, “domestic market enterprises” and “public services other than those recognised as utilities”. It was not confirmed exactly what is considered a utility.
The directive also called for openness in “particular professions where allowing foreign participation will redound to public benefit”.
For several years, the Philippines has been enjoying some of Asia’s fastest rates of growth. As we recently reported, its third-quarter expansion of 6.9 per cent from a year earlier beat all expert forecasts.
Duterte’s administration is aiming for annual growth this year of up to 7.5 per cent, underpinned by higher state spending and stronger exports and agriculture output.
But investors have long complained of obstacles to foreign firms, such as the 60-40 rules on domestic ownership.
Foreign direct investment into the Philippines is dwarfed by neighbouring countries such as Thailand, Vietnam and Indonesia, something the government is eager to change by slashing red tape and launching an ambitious, six-year, $180-billion, “Build, Build, Build” infrastructure splurge.
The eight foreign investment areas are:
Private recruitment, whether for local or overseas employment
Practice of particular professions, where allowing foreign participation will redound to public benefit
Contracts for the construction and repair of locally-funded public works
Public services, except activities and systems that are recognized as public utilities such as transmission and distribution of electricity, water pipeline distribution system, and sewerage pipeline system
Culture, production, milling, processing, and trading except retailing, of rice and corn and acquiring by barter, purchase or otherwise, rice and corn and the by-products thereof
Teaching at higher education levels
Retail trade enterprises
Domestic market enterprises