RP needs to revise laws to draw more foreign direct investments

MANILA, Philippines – The Philippines is not attracting as much foreign investments because laws in the country make it difficult for companies to infuse capital, the Joint Foreign Chambers (JFC) said yesterday.

As such, the JFC laid down eight steps to help the country rebuild foreign investment inflows despite of the global economic crisis. These steps are – avoid complacency, pass reform legislation,  reduce barriers to foreign participation, take forceful and effective actions against corruption and smuggling, build modern infrastructure faster, vastly improve education, create a more efficient and competitive business environment and build really big winners.

European Chamber of Commerce in the Philippines (ECCP) president Hubert d’ Aboville said that this year the country is expected to get a quarter of the $3 billion foreign direct investments (FDI) it got in 2007.

The Joint Foreign business group said that FDI flows in the Philippines is worrisome because it is much too low. “It needs remedial work,” D’Aboville said.

Data presented by the JFC showed that among ASEAN countries, the Philippines had the lowest FDI level. Topping the list is Malaysia, followed by Vietnam, Singapore, Thailand and Indonesia.

JFC said that the economic crisis must act as a wake up call for the country because after the 1997 Asian financial crisis there were only few efforts made to undertake reform.

“The Philippine government speaks more about resiliency than reform,” the foreign businessmen said. In fact, they said there have been no plans to target double digit growth.

JFC suggested that a Special Crisis Experts Group be created to help the country achieve a recovery growth target of 10 percent by 2013 or 2014.

D’Aboville said that in order to create more jobs and attract  foreign direct investments, the government must make the foreign investment negative list less negative.

In particular, d’Aboville identified three laws. These are the restrictions on ownership particularly in utilities; land reform and the limitation on retail.

He said the JFC has already written to President Arroyo suggesting  that a private public partnership group be set up in order to make revisions on the foreign investment negative list.

“Progress in reducing barriers to foreign participation sends the message that the country is seriously preparing for free trade negotiations with the EU and US and would facilitate success of such negotiations,” the group said.

Aside from reducing barriers to foreign participation, JFC is asking the government to pass 10 reform legislation before the end of the year. These are the Customs Brokers Act Amendment, the creation of the  Department of Information and Communications Technology (DICT), Rationalization of the Investment and Incentives Code, the Pre-Need Code, Real Estate Investment Trust (REIT), Reproductive Health Act, Residential Free Patent, Freedom of Access to Information, Amendments to Blacklisting and the Revised Kyoto Convention. –Ma. Elisa P. Osorio, Philippine Star