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Businessmen laud easing of foreign ownership bills

Ehda M. Dagooc (The Freeman) - April 17, 2021 - 12:00am

CEBU, Philippines —  Cebu business leaders welcome the easing of foreign ownership bills, saying these are good for economic recovery.

“The economic bills that the President and his economic team are pushing, support the overall direction of promoting more FDIs [foreign direct investments]. It is a step in the right direction, to diversify our economy from over-reliance on OFW remittances and BPOs, especially now that tourism is in the back burner due to the pandemic,” said Mandaue Chamber of Commerce and Industry (MCCI) president Steven Yu.

According to Yu, while the enactment of the bills brings in more competition, they will also spur innovation and upskilling.

Significantly, both businesses and consumers stand to benefit in the near and medium term on these, added Yu.

According to Yu this move should open up more opportunities for the business sector and is something to look forward to.

Early this week, President Rodrigo Duterte has certified as urgent measures that allow full foreign ownership of public services and less restrictions on foreign investments.

Duterte certified the following bills as urgent: Senate Bill No 2094 - Seeks to amend the Public Service Act;  Senate Bill No 1156 - Seeks to amend the Foreign Investments Act of 1991; Senate Bill No 1840 - Seeks to amend the Retail Trade Liberalization Act of 2000 by lowering the required paid-up capital for foreign retail enterprises

The House already passed its version of the amendment to the Public Service Act, which allows 100 percent foreign ownership of public utilities, in March 2020.

Likewise, Cebu Chamber of Commerce and Industry (CCCI) president Felix Taguiam said Duterte’s move to push the enactment of the bills is a welcome relief to revive the local economy.

However, Taguiam warned that the government should create safeguards, such as time frame of the ownership. “After such time [they] must take in a local partner for the transfer of technology and ideas for upliftment of our economy.”

CCCI vice president for Mobility Mike Cubos said allowing full ownership of public services and easing of restrictions on foreign investments would bring many advantages to our country.

“I think the biggest impact on this is the increase of Direct and Long Term Investments that can jumpstart our struggling economy. This measure plus the CREATE is powerful combination. This can provide more jobs, opportunities and even the potential of knowledge transfer, which I’m excited about.

On the IT-BPM side, Cubos said this is also a welcome invitation for more locators to invest in the country especially in the countryside.

“Having less restrictions on BPO investments, will result to a stronger industry and this will catapult the Philippines back to the global rankings,” Cubos added.

Senator Grace Poe, as chairperson of the Senate public services committee, sponsored the Senate version of the measure in plenary on March 10 but it has yet to pass the second reading.

The measure allows 100 percent foreign ownership of public services like telecommunications, power, and transportation by distinguishing between public services” and “public utilities.”

This is critical because the 1987 Constitution only requires 60 percent Filipino ownership of a firm if the firm is operating a “public utility.”

But under the proposed bill, public utilities are limited to just three services: electricity distribution, electricity transmission, and water pipeline distribution and sewerage.

This means that other services – like telecommunications, transportation power generation, petroleum, wire or wireless communications – would no longer be labeled as public utilities and would thus be exempt from the requirement that firms running them should be 60 percent owned by Filipinos.

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