Department of Trade Secretary and Board of Investments (BOI) Chairman Ramon Lopez see more foreign investors to come after the signing of the amended Foreign Investments Act (Photo from THEPHILBIZNEWS/MAS)
By THEPHILBIZNEWS STAFF
Just in time! This is what Trade Secretary and Board of Investments (BOI) Chairman Ramon Lopez thought after the recent signing of the amended Foreign Investments Act.
Cognizant of the challenges faced by the MSMEs brought by the pancemic to all business spectrum, Trade Chief welcomed the approval of President Rodrigo Duterte of the Foreign Investments Act\ which he said will draw more investors to the Philippines and would alsop be the start of the country’s path toward economic recovery, making more investments opportunities happen in the Philippines.
President Duterte signed into law Republic Act No. (RA) 11647, amending the FIA of 1991 to improve foreign investments in the Philippines. Trade Secretary Lopez heaped praise on the signing, as the amended law is positioned to attract more foreign investments – providing “less stringent requirements” for potential foreign investors to enter the Philippine market despite the COVID-19 pandemic.
The new law, said Secretary Lopez, will encompass more sectors to encourage more investments being injected into the country’s economy.
“We in the economic team have always been in favor of reasonably opening up the economy and liberalizing as many restrictions that hinder the continuous and fast growth of the economy,” he emphasized.
Both the Senate and the House have adopted and ratified the bicameral conference committee’s report harmonizing a measure amending the FIA, which, in turn, would boost foreign direct investment to more industries in the country. Notably, the new law will generate jobs for Filipinos and speed up the recovery of the pandemic-stricken Philippine economy.
“Indeed, we cannot overemphasize the importance of a major shift in mindset and economic policy direction. For the country to lead a path to recovery amid COVID-19, we have been a consistent advocate for the amendment of this passage which aims to lessen barriers for foreign entry and is expected to hasten the country’s economic growth through foreign investment,” the trade chief added.
In particular, the amended FIA cuts the list of investment areas for Filipinos: defense-related businesses and small and microlocal market enterprises with paid-up equity capital of below USD200,000; it also sanctions qualified foreign investors to do business in the Philippines or invest in a domestic enterprise up to 100%of its capital.
The signed law was a consolidation of Senate Bill No. 1156 and House Bill No. 300 and was eventually certified as urgent by President Duterte, along with amendments to the Public Service Act (PSA) and Retail Trade Liberalization Act (RTLA). Secretary Lopez extended his appreciation to President Duterte, Senate President Vicente Sotto III, House Speaker Lord Allan Jay Velasco, and their respective Economic Committees chaired by Senator Imee Marcos and Representative Sharon Garin, respectively, for approving and ensuring the immediate passage of the said economic reforms in both chambers of Congress.
Secretary Lopez pointed out that the signing of the FIA, together with other economic reforms, is an opportune time for foreign investors to complement the recent full reopening of the Philippine economy, for the country’s major cities were de-escalated to Alert Level 1.
Based on the recent report of the Bangko Sentral ng Pilipinas (BSP), the country’s net foreign direct investment (FDI) inflows soared by 52.5% in November 2021 to $9.24 billion from $6.06 billion in the same period in 2020. For the first eleven months of last year, reinvestment of earnings rose by 12.8% to $1.02 billion from $907 million in 2020.
The performance recorded by the B0I in 2021 is consistent with the recent report by the BSP on the FDIs in the Philippines. The BOI recorded a Php655.4 billion (US$ 12.8 billion) worth of investment approvals from 235 projects in 2021 with a surge of foreign investments at 218% despite the economic ramifications of the pandemic.
Meanwhile, BOI Managing Head and Undersecretary Ceferino Rodolfo said the law will significantly change the country’s business environment.
“This is an important reform because it will further strengthen the government’s economic recovery efforts, and will also improve the country’s investment climate. With more investments coming this year, we can surely Make It Happen in the Philippines,” said the Undersecretary.
BOI, the leader of the country’s investment promotion agencies (IPAs), will play a role in crafting the law’s implementing rules and regulations. Under Sec. 14 of the law, the National Economic Development Authority (NEDA), in consultation with the Department of Trade and Industry (DTI) and Department of Finance (DOF), will amend the existing rules and regulations for the efficient implementation of the Act.
Aside from spurring growth to the country’s economy, the law will also foster a “culture of cooperation” among Investment Promotion Agencies (IPAs). Undersecretary Rodolfo pointed out that the proposed revision of the 30-year-old law will improve the current setup by coordinating further investment promotion efforts in the country.
Existing is the Philippine Investment Promotion Plan (PIPP), an informal grouping of 19 IPAs, and under which are 14 incentive giving bodies, wherein the BOI heads both the Steering Committee and Technical Working Group. Based on the amended FIA, the creation of an Inter-Agency Investment Promotion Coordination Committee (IIPCC) is instructed, integrating all promotion and facilitation efforts to “encourage foreign investments in the country.”
“The goal is to achieve a world-class brand image for the country within the intertwined approaches of image building, investment generation, and investment servicing,” Undersecretary Rodolfo said.
He added that through championing a culture of cooperation, no competition for investments will happen among the IPAs and subsequently, it will provide the “best possible locational choice for investments.”
Furthermore, the BOI is focusing on projects that will transform the Philippine economy to become more modern such as telecommunications, roads, green energy, health, innovation and digitization, sustainable and competitive heavy industries among others.