ECCP: Ease restrictions to encourage competition

CEBU, Philippines - The Philippines needs to further open up its economy to foreign investors to allow more competition to happen, according to the European Chamber of Commerce of the Philippines.

"Open up the economy and allow more competition to happen, not to make everything fine for foreign investors, but rather to create more competition. More competition will provide better products and services," Henry Schumacher, vice president of ECCP, said in a recent interview.

The administration of President Duterte had expressed plans to lift restrictions on foreign investments in the country.

Easing

Easing restrictions and regulatory requirements is expected to boost foreign direct investments (FDIs) in the country.

The current administration cited the plan to further liberalize the economy by adjusting the cap on foreign ownership of local companies from 40 percent to 70 percent.

Schumacher said he does not see the need to have restrictions on foreign investment.

He added the public utilities sector need more competition, as well as the infrastructure sector, particularly in the development of highways, seaports and airports.

"We like the 10-point agenda of President Duterte and [Finance] Secretary Dominguez. We have told them we're going to be part of it. We believe there's a sense of urgency in this administration. I think everybody knows [the administration has] 100 days to show some impact in infrastructure and other sectors," Schumacher said.

In early June, the previous government lifted some barriers in foreign investment by removing lending firms, investment houses and financing companies from the Foreign Investment Negative List. The FINL is a list that excludes certain sectors from foreign ownership or investment.

Top destination

According to the United Nations Conference on Trade and Development, the Philippines is forecast to be one of the top 15 FDI destinations over the next three years.

The 2016 World Investment Report of UNCTAD also cited the noteworthy measures of the Philippines to liberalize foreign investments, particularly in removing foreign ownership restrictions on financing and investment firms, and cutting the number of professions reserved for nationals.

The UNCTAD also cited industries such as utilities, agriculture, food and beverage and ICT as likely targets of increased FDI in coming years.  Net inflow of FDIs to the Philippines fell in May from a yer ago and preceding month, according to latest data from the Bangko Sentral ng Pilipinas. Netr FDI inflows reached $364 million in May, down 9.6 percent from $403 million recorded a year ago and the record-hihg $2.2 billion in April.

The country's FDI remains low compared to the rest of the Southeast Asian region.

In 2015, the Philippines recorded $5.72 billion in FDI, below the government's target of $6 billion and marginally down from $5.74 billion in 2014.  (FREEMAN)