THE two-month delay in the approval of the Foreign Investment Negative List (FINL) will not have a direct impact on the government’s massive infrastructure initiative, the National Economic and Development Authority (Neda) said.
Socioeconomic Planning Secretary Ernesto M. Pernia told the BusinessMirror that the delay in FINL, approval by the President has “no direct connection” to the “Build, Build, Build” (BBB), as well as Public Infrastructure Program.
In a briefing on Thursday, Pernia said the President has yet to approve the FINL, which the Neda submitted two months ago. However, he assured the updated FINL will be signed soon.
“We have proposed to the President, who wanted actually to liberalize the current investment negative list,” Pernia said. “We have already drafted an EO [executive order], and that EO is ready for signing. It will be signed pretty soon.”
The updated FINL includes, among others, allowing foreign contractors to participate in locally funded projects. This will also allow local developers and contractors to bring in foreign contractors and other experts to participate in infrastructure projects.
Under the current rules, foreign contractors cannot participate in locally funded construction projects. But once the updated FINL is signed, foreign contractors can already operate in the Philippines.
Earlier, the Asian Development Bank said allowing foreign companies and contractors to participate in the government’s BBB program can speed up and improve the implementation of its massive infrastructure program through International Competitive Bidding.
“[The updated FINL includes] contracts for the construction and repair of locally funded public works projects. Remember that before, foreign contractors cannot be involved in locally funded projects but now that will be eased,” Pernia said.
Apart from contractors, the FINL will also ease foreign restrictions on private recruitment, whether for local or overseas employment; teaching in the higher education levels; retail trade enterprises; and domestic market enterprises.
Pernia said the updated FINL will make it possible for a 100-percent owned telecommunications firm to operate in the country.
The Neda chief said while some laws need to be amended to make these changes possible, there are already a number of bills filed in Congress that will support the FINL.
“Some of these have to be legislated. There are bills in Congress, [and] some of them are in advanced stages that will allow us to liberalize these other items,” Pernia said.
The Neda is tasked to review and revise the country’s Regular Foreign Investment Negative List, which contains restrictions on foreign investments and the practice of professions based on the constitution and Philippine laws.
The RFINL contains investment areas/activities where foreign-equity participation is limited by mandate of the Constitution and specific laws. It also consists of investment areas and activities where foreign-equity participation is limited for reasons of defense, security, risk to public health and morals, and protection of small- and medium-sized domestic market enterprises.
The amendment of the list is headed by the Neda secretariat, as provided for under Section 8 of Republic Act 7042, or the Foreign Investments Act of 1991, which states that amendments may be made upon the recommendation of the secretary of national defense or the secretary of health, or the secretary of education, endorsed by the Neda, approved by the President and promulgated by a presidential proclamation.