MANILA, Philippines – The Philippines may have to review the Constitution’s limits on foreign ownership for capital-intensive investments, if it wants to attract more investors in the country, the Philippine Economic Zone Authority (PEZA) said.
Speaking at the Shareholders’ Association of the Philippines Summit held yesterday, PEZA director general Lilia de Lima said the government may need to consider looking into the foreign ownership restrictions of the Constitution to make the country more attractive to investors.
“I agree with (UK) Ambassador (Asif) Ahmad. For capital-intensive investments, we have to revisit the 60-40 foreign ownership restrictions,” she said.
De Lima said it is important for the Philippines to take advantage of foreign firms’ interest in the country.
“Since we are on the radar screen, we have to grab the opportunity. Carpe diem. Grab the day. Otherwise, this opportunity may not come again,” she said.
She noted that there are many reasons why the Philippines is becoming an attractive location for business given its positive economic prospects as well as its biggest competitive advantage which is its young, English speaking, easily trainable talent pool.
Ahmad had earlier commented that while the Philippines has captured the interest of foreign firms as a location to consider for doing business, he said relaxing the Constitution’s economic restrictions on foreign ownership would make the country a more attractive destination for investments.
“A whole lot more could come from foreign investment if the restrictions on ownership are lifted. For big projects and investments, it is difficult for a foreign investor to accept a minority shareholding especially if they carry the bulk of the risk, provide the management expertise and the technology,” he said.
The Constitution sets a 40-percent limit on foreign ownership in certain sectors.
At the House of Representatives, Speaker Feliciano Belmonte, Jr. has filed Resolution No. 1 which seeks amendments to relax or provide flexibilities in the constitutional restrictions on foreign investments, with the view of encouraging more foreign firms to invest in the country.
President Aquino has said though there would no changes to the Constitution during his term.
But while there are many reasons why foreign firms should go to the Philippines for business, it is hard to market the country for investments.
“The difficulty in promoting the Philippines is image of corruption,” De Lima said.
As such, the PEZA along with the Department of Trade and Industry is encouraging foreign firms to visit the country to see what it can offer.
De Lima said that as the government aims to make economic growth more inclusive by creating jobs, it wants to attract investments in manufacturing and agro-industrial sectors.