MANILA – A Filipino information technology expert fully backed the administration’s goal to energize Foreign Direct Investments (FDI) in order to make the Philippines a prime investment destination and manufacturing hub.
During the second meeting of the Senate Committee on Constitutional Amendments and Revision of Codes on Friday, Singapore-based Orion Perez Dumdum, co-founder and lead convenor of the Constitutional Reform and Rectification for Economic and Competitiveness and Transformation (CoRRECT) Movement, recalled meeting international businessmen who are reluctant in investing in the Philippines because of its tight laws.
"I keep on hearing the same complaint. That we are the only country in this area that has a numerous anti-Foreign Direct Investments restrictions in the Constitution," Dumdum, who has travelled for work and observed countries and the systems they employ, told the committee.
In fact, he said the country ranked third, next to Palestine and Libya, on the Organization for Economic Cooperation and Development's list of nations most restrictive to foreign investments on its FDI Regulatory Restrictiveness Index in 2020.
President Ferdinand Marcos Jr. mentioned in his first State of the Nation Address in July that his administration aspires to make the Philippines a prime investment destination and manufacturing hub by attracting more FDIs.
"Our country must become an investment destination, capitalizing on the Corporate Recovery and Tax Incentives for Enterprises or the CREATE law and the economic liberalization laws such as the Public Service Act and the Foreign Investments Act," Marcos said.
"Ecozones will be fully supported to bring in strategic industries such as those engaged in high-tech manufacturing, health and medical care, and emerging technologies," Marcos added.
Section 7 of Republic Act 7042 or the Foreign Investments Act of 1991 states that foreigners may own up to 100 percent of domestic market enterprises, unless foreign ownership therein is prohibited or limited by existing law or the Foreign Investment Negative List.
The Foreign Investment Negative List includes areas which are used as venue of defense-related activities; areas that have implications on public health and morals; and small and medium-sized domestic market enterprises with paid-in equity capital less than the equivalent of USD$500,000.
According to data, the Philippines’ foreign direct investments’ net inflow jumped by 8 percent to US$1.71 billion in January and February 2022, after hitting a record high of US$10.5 billion in 2021.
Finance chief Benjamin Diokno previously noted that the Philippines will continue to attract foreign investments with the current administration’s enactment of the amended Retail Trade Liberalization Act, Foreign Investments Act, and Public Services Act.
As an added boost to the reform momentum, the tax system that Marcos inherited is “much better,” according to Diokno, after the Duterte administration reformed personal income tax and corporate income tax; increased taxes on cigarettes three times; increased tax on petroleum products; and imposed tax for the first time on sugary products.
Meanwhile, Ding Generoso, spokesperson of the consultative committee to amend the constitution formed by former president Rodrigo Duterte, said there is a time limit on officers’ tenure if and when the shift to a federal form of government materializes.
He said the transition team will be headed by the President, all living past Presidents, Vice President, Senate President, House Speaker, an economist, law expert, and fiscal management representative with a fixed three-year term. (With a report from Leonel Abasola/PNA)