Land ownership not sure draw for FDIs

Written by Max V. de Leon / Reporter

Thursday, 30 April 2009 23:53

DOMESTIC manufacturers are not sold on the idea that allowing foreign investors to own land will boost foreign direct investments (FDI), pointing out that China and Vietnam are attracting huge FDIs even if they do not allow land ownership. “They may be prescribing the wrong medicine,” said Jesus Arranza, president of the Federation of Philippine Industries (FPI). Instead of revising the Constitution to give foreigners the right to own land, the FPI said efforts should be focused on improving the business climate through stability in policies, better infrastructure, lower power rates, and better peace and order, among others—the same factors foreign and local critics have been urging for years if not decades. Arranza quoted a Chinese saying—“Business will come despite all the risks as long as they can make a profit”—in buttressing his group’s suggestions and to explain the strong inflow of FDI in locales where danger and risks exists much greater than in the Philippines. If foreigners are allowed to own lands without restrictions, the resulting escalation of real property prices would disturb the market and make it even harder for Filipinos, even those in the middleclass, to acquire properties, he added. If foreigners are ever allowed to own land, however, he said they should only be limited to the actual lots on which their manufacturing and processing plants stand. That means no land for development. “We already have our experts in that field,” he said, pointing to Ayala Land, Robinson Land and SM Properties. In the area of agribusiness, Arranza said foreigners should also be barred from owning plantations but only the lots occupied by their processing plants. But he said their group still maintains the best is not to give ownership of land to foreigners because “it is to the best interest of the Filipino people.” “It is a crazy argument to say that ‘the foreigners, anyway, will not be able to bring with them the lands that they would buy when they leave.’ When they leave the country, the foreigners will surely not just give back the ownership of the lands for free, but would be selling or leasing them at much higher prices,” he said.