THE SENATE on Tuesday approved a bill to amend the country’s foreign investment law, a move that is expected to further open up the economy.
Senate Bill (SB) No 1156, which introduces amendments to the Foreign Investment Law (FIA) of 1991, passed third and final reading on Tuesday evening. It was certified urgent by President Rodrigo R. Duterte.
Under the bill, the required number of direct hires for foreign companies will be reduced to 15 from the current 50.
The bill will also allow foreigners to invest 100% equity in domestic market companies, except in areas included in the negative list of foreign investments.
Foreign investors will also be allowed to create and own 100% of small and medium-sized enterprises (SMEs) under the measure.
The Philippines’ foreign direct investment (FDI) rules were seen as more restrictive than those of other Southeast Asian economies, which received more investment.
The Philippines was the third most restrictive economy out of 83 according to the Organization for Economic Co-operation and Development (OECD) FDI Regulatory Restriction Index, based on 2020 data.
Business groups have urged Congress to adopt three reform measures, namely amendments to the FIA, the Retail Liberalization Act (RTLA) and the Civil Service Act (PSA).
The House of Representatives passed all three measures, although the Senate has yet to approve the PSA amendments.
“The three measures will ease restrictions on FDI and, together, could lead to billions of new investments in the years to come, creating more jobs, diversifying the economy, bringing new technologies and increasing competition, and providing better services for the benefit of Filipino consumers, ”local and foreign business groups said in a Sept. 7 statement. – NO