THE House of Representatives has endorsed for Senate approval a measure that proposes to loosen foreign investors’ access to the Philippines.
This, after the lower chamber passed on third and final reading House Bill 8764 amending the Foreign Investments Act (FIA) of 1991.
The measure deletes the “practice of professions” from the items listed in the Foreign Investment Negative List (FINL) by amending Section 4 of Republic Act 8179.
It also lowers the employment threshold from 50 to 15 for small- and medium-sized enterprises (SMEs) established by foreign investors with minimum paid-up capital of $100,000.
The bill also seeks to generate more employment opportunities for Filipinos and strengthening the country’s expanding economy.
Tourism
MISAMIS Oriental Rep. Juliette Uy, vice chairman of the House Committee on Small Business and Entrepreneurship Development, said the measure is expected to boost small and medium enterprises in the tourism sector through improved online bookings and cyberspace presence.
“As [a] member of the House Committee on Tourism, I supported HB 8764 because of the growth impact it can have by modernizing our tourism sector using online booking and cyberspace technologies,” Uy said.
Uy added HB 8764, when enacted into law, will allow foreign investors to infuse $100,000 minimum paid-in capital into SME capitalized at up to $200,000 engaged in advanced technologies, and with at least 15 direct employees.
“In Misamis Oriental and nationwide, we have thousands of tourism SMEs. An investment of $100,000 which is about P5.2 million can give a tourism SME strong Internet and social-media presence through online bookings and offering of their services and visitor destinations,” the Misamis Oriental lawmaker said.
“Multiply that by the tens of thousands [of] tourism SMEs nationwide and we could very well see a tourism boom in the next few years,” Uy said.
She noted that “reliable and efficient cyberspace access has long been a weakness of many tourism SMEs in the country.”
“As early as now, the DOT [Department of Tourism] and DTI [Department of Trade and Industry] ought to lay the groundwork for the implementation of this amendment to the Foreign Investments Act of 1991. A national registry and database of SMEs can be crucial, and will also dovetail with the execution of the Ease of Doing Business Act,” said Uy.
FDI lure
EARLIER, Deputy Speaker Arthur Yap of Bohol, one of the principal authors of the bill, said the measure will help the country to attract FDI and facilitate transfer of technologies, and share expertise to provide more options for more quality goods and services.
“Foreign Investments Act of 1991 was enacted to attract investments from foreign sources and in so doing expand livelihood and employment opportunities for Filipinos,” Yap said.
However, he added, there are two provisions in the law that appears to be in conflict with its objectives.
He said the first provision is related to the practice of all professions, which is included in the FINL under the “no foreign equity” phrase.
“Considering that certain laws governing each profession allow foreign nationals to practice in the Philippines under reciprocity agreements. It is misleading to include such item in the FINL as a nationalized activity. This effectively discourages foreign professionals, who would otherwise be allowed to practice here by virtue of reciprocity, from coming in and sharing their ideas and technical know-how, contrary to the inclusive policy of the FIA,” he said.
According to Yap, the second conflicting provision in the law allows foreigners to invest in small- and medium-sized domestic market enterprises with a minimum paid-in capital of $100,000 if they employ at least 50 direct employees.
“However, operationally speaking, a $100,000 enterprise, which is only a little over P4.3 million, cannot immediately sustain a labor force of 50 persons. Hence, there is a need to retain the employment requirement but lower the threshold to a more reasonable number,” he added.