PRESIDENTIAL aspirant and Senator Panfilo M. Lacson, Sr. assured micro and small businesses on Tuesday that the new law contains provisions that ease restrictions on foreign investment to protect their sector.
“We have opened up the possibility for foreigners to invest here, but there are guarantees. As long as the starting capital is $200,000 (about 10 million pesos) and below, which is protected, no foreign investors can get involved. This covers micro and small (enterprises),” he said in Filipino in a statement on Tuesday.
Micro enterprises have an asset size of up to 3 million pesos with less than 10 workers, while small enterprises have up to 15 million pesos in assets with up to 99 employees, as defined by the Philippine government.
Micro, small, and medium-sized enterprises (MSMEs) collectively accounted for 99.5% of all businesses in the country, according to the Philippine Statistics Authority’s 2020 Establishment List.
Of the total 952,969 MSMEs, micro enterprises accounted for 88.77% or 850,127, while small enterprises accounted for 10.25% or 98,126.
Lacson said the recently signed Republic Act 11647, which amends the three-decade-old Foreign Investment Act, will open more credit windows and sources of capital for micro and small entrepreneurs.
Under the law, foreign investors can venture into a local company for up to 100% of its capital.
They can be wholly owned small and medium enterprises with a minimum paid up capital of less than $100,000 or 5 million pesos if the majority of their direct employees are Filipinos.
The law narrows the list of investment areas reserved for Filipinos to only defence-related companies and small and micro businesses in the domestic market with paid-up capital of less than $200,000, or about 10 million pesos.
Lacson said the new law makes the country more investment-friendly, which could lead to more businesses and jobs opening up. — Alyssa Nicole O. Tan