NEDA considering changes in foreign investments act

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Category: Top News

Published on Wednesday, 30 January 2013 20:50

Written by Mia M. Gonzalez / Reporter

The National Economic and Development Authority (Neda) is considering possible amendments to the Foreign Investments Act to address the concerns raised by foreign business chambers and others on the Ninth Foreign Investments Negative List (FINL), Socioeconomic Planning Secretary Arsenio Balisacan said on Wednesday.

Responding to questions, Balisacan said in an interview after his appearance before a panel of the Commission on Appointments at the Senate, that an interagency group composed of the Neda, the Department of Justice (DOJ) and the Department of Labor and Employment (Dole) may be formed to look into the possible amendments.

He said the group will look at the entire law “and examine the underlying reasons for their imposition that still hold today” and the opportunities lost as a result of their being there. “We have to do some study to see if there will be benefits for the country to remove these restrictions by asking Congress to amend the law,” Balisacan said.

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The Joint Foreign Chambers (JFC) had earlier expressed disappointment over the FINL, contained in Executive Order (EO) 98 issued in November last year, and urged the Aquino administration to make it “less negative” by delisting some items.

Balisacan said that following the JFC complaint, he consulted with the DOJ whether EO 98 can be amended, but he was informed that the negative list could only be amended by law.

“A negative list is simply a listing of what Congress has enacted. So we cannot amend it. If you want to amend that, Congress will have to change [the law],” he said.

Balisacan said the Neda was just mandated to provide a list that could easily be accessible to the general public.

Balisacan said the study has not begun “but that’s the intention.”

“We are still discussing how to proceed. We may form an interagency committee because it would not only involve the Neda. The DOLE, for example, [would also have to be involved] on the restrictions in the practice of professions. So we have to consult the DOLE, and the DOJ should also come in and look at the legal issues,” he said.

Balisacan said he took the initiative to plan a study of the law for possible amendments after the JFC and other groups expressed concern over the FINL.

“Also from an economic viewpoint we have to see if there are unnecessary [inclusions in the negative list],” he said.

The JFC had earlier said it recognized the difficulty of amending constitutional restrictions on foreign capital and foreign professionals, but “restrictions in legislation and/or in interpretations of what should or should not be in the FINL should be easier to liberalize.”

“Restrictions are scattered through various laws, some quite old, and most have rarely been reviewed to determine whether they remain in the national interest, especially whether they stand in the way of creating jobs,” the JFC said following the issuance of EO 98 last year.

The JFC is pushing for the removal of  “List A. Practice of all professions” from the FINL, which it said “could be made quickly” and would make the FINL less negative.

“All but the laws on professions allow for reciprocity. The Professional Regulatory Commission [PRC] decides whether reciprocity exists when a foreign national applies to practice in the Philippines. The current FINL does not explain this,” the JFC said.

It also noted that “with some exceptions, there is a distinction between ownership of a company that employs professionals [certified by the PRC] and employees who execute professional services” and as such, “the FINL needs clarification, as it is incorrectly worded in its present form.”

The JFC is composed of the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Korean Chamber of Commerce of the Philippines and Philippine Association of Multinational Regional Headquarters.