THE SENATE approved on Tuesday a bill that amends the country’s foreign investments law, a move that is expected to further open up the economy.
Senate Bill (SB) No. 1156, which introduces amendments to the Foreign Investments Act (FIA) of 1991, was approved on third and final reading on Tuesday evening. It was certified as 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 enterprises except in areas included in the foreign investment negative list.
Foreign investors will also be allowed to set up and own 100% of small and medium-sized enterprises (SMEs) under the measure.
The Philippines’ foreign direct investment (FDI) rules have been considered more restrictive than other Southeast Asian economies, which have received more investments.
The Philippines ranked third most restrictive out of 83 economies on the FDI Regulatory Restrictiveness Index compiled by the Organization for Economic Cooperation and Development (OECD), based on 2020 data.
Business groups have been urging Congress to pass three reform measures, namely amendments to the FIA, Retail Trade Liberalization Act (RTLA) and Public Service Act (PSA).
The House of Representatives has passed the three measures, although the Senate has yet to approve the PSA amendments.
“All three measures will relax FDI restrictions and together could result in many billions of new investments in future years, creating more jobs, diversifying the economy, bringing new technology, and increasing competition, and providing better services to the benefit of Filipino consumers,” local and foreign business groups said in a Sept. 7 statement. — ANOT