The Philippines: Reforms pushed to attract more FDI

  • THE Trade department is making a renewed push for the passage of bills that would further open up the economy to foreign direct investments (FDI), after Philippine rules on such were again deemed among the most restrictive in the world.
  • The Philippines ranked fourth out of 84 economies on the FDI Regulatory Restrictiveness Index compiled by the Organization for Economic Cooperation and Development (OECD), based on 2019 data.
  • On a scale of 0 (open) to 1 (closed), the Philippines scored 0.374 on the index, with the biggest restriction being the Constitution’s 40% limit on foreign ownership in key industries such as telecommunications, media, real estate, agriculture, and utilities.
  • Ramon M. Lopez, Trade secretary and chairman of the Board of the Investments, said in a mobile message on 29 Aug 20 that the Philippines’ dismal ranking is the reason behind the urgent need for more reforms such as amendments to the Retail Trade Liberalization Act (RTLA) and the Public Service Act (PSA).
  • Changes to the RTLA include reducing the required minimum paid-up capital for foreign companies that seek to enter the Philippine retail sector, while amendments to the PSA would lift foreign ownership restrictions in certain sectors.

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