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Business

DOF backs more relaxed foreign ownership limits

Elijah Felice Rosales - The Philippine Star

MANILA, Philippines — The Department of Finance (DOF) is urging lawmakers to prioritize the approval of proposals  to remove foreign ownership restrictions to attract more foreign investors to come to the country.

In an economic bulletin, Finance Undersecretary and chief economist Gil Beltran said amending the Foreign Investments Act (FIA) of 1991, the 85-year-old Public Services Act (PSA) and the Retail Trade Liberalization Act (RTLA) of 2000 may generate more employment and make the country more competitive.

“Medium to long-term, the passage of the amendments to the FIA, PSA and RTLA will help bring in more capital, generate more employment, and possibly better wages, and make the economy more competitive,” Beltran said.

Congress has approved the bicameral conference committee report on changes to the RTLA, setting the minimum capital for foreign retailers at P25 million, or around $500,000, from $2.5 million at present. The measure now awaits the signature of President Duterte.

On the other hand, the House of Representatives last year passed its version of revisions to the PSA. In amending the 1936 law, the government will identify what are public utilities, which are barred from being owned by foreigners under the Constitution.

As a result, industries that fall outside the scope of the amended PSA like telecommunications can soon be owned by foreigners.

In the proposal pushed by the House, public utilities will be restricted to distribution of electricity, transmission of electricity, water pipeline distribution and sewerage pipeline.

As for changes to the FIA, the government plans to allow the free entry of foreign professionals into the country with the hope that they share their knowledge and skills with Filipino workers.

Based on the Labor Force Survey, the unemployment rate spiked to 8.1 percent in August, from 6.9 percent in July, as multiple areas were reverted to lockdown to stop the spread of the Delta variant. In real numbers, about 3.88 million Filipinos were jobless during the month.

In the short term, Beltran said policymakers should focus on containing the transmission of new COVID variants, or else the virus would drag the recovery of the economy, especially the labor market. “The health risks should be managed well and the spread of the virus prevented,” Beltran said.

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