Foreign investments

TIEZA bats for foreign investment

The cash-strapped Tourism Infrastructure and Enterprise Zones Authority (TIEZA) of the Department of Tourism (DoT) hopes the relaxed rules on foreign ownership will speed up much-needed funds from foreign investors.

TIEZA chief operating officer Mark Lapid said he joined Expo Dubai 2020, which ended in March, to encourage foreign investment in tourism – this follows recent amendments to the Foreign Investment Act (FIA) which allows foreigners, for the first time, to set up and wholly own domestic businesses in the Philippines.

TIEZA hopes revised foreign investment law will attract foreign investors

Previously limiting foreigners to 40% ownership of companies, Lapid said the FIA ​​change was a good start. There are some exceptions to 100% foreign ownership, whereby foreigners can manage hotels and related properties, but cannot own land.

He revealed that the DoT’s investment and infrastructure arm has been hit hard by the tourism lockdown since it exhausted its main source of funds – the US$38.78 (1,620 peso) outbound passenger travel tax. – forcing TIEZA to interrupt all its projects.

While 50% of overseas travel tax collection goes to TIEZA, the rest is split between two other government agencies.

Although there is no collection of travel tax and revenue from its projects, TIEZA has handed over $227.7 million to the Treasury Office to support the purchase of medical facilities and equipment in response to Covid-19, helped fund the Philippines’ hosting of the 21st World Summit WTTC, and funded the construction of the new Cloud 9 Scenic Bridge in Siargao, which was destroyed by the super typhoon in December.

Its operating entities Gardens of Malasag Eco Tourism Village in Cagayan de Oro, Banaue Hotel and Youth Hostel in Banaue and San Fabian Beach in Pangasinan have been used as temporary quarantine facilities during the pandemic.

TIEZA is also encouraging more private sector investment in tourism projects, and Lapid said a few companies are showing interest.

Prior to the pandemic, TIEZA had approved joint venture guidelines for private sector participation in the development, operation, management and disposal of its properties and facilities.

Absent any further lockdowns, Lapid calculated that TIEZA could reach US$19 million in travel tax collection by the end of the year. His collection had already reached $2.5 million in April since the Philippines opened its international borders earlier in February.