Aquino expands foreign investment limitations list

Noynoy Aquino, shame on you!

I cannot understand on why our president, Noynoy Aquino prefers to limit instead of opening more economic sectors for 100% foreign equity ownership or foreign participation in our white and blue-collar jobs just to protect the interests of his benefactors during the campaign period who happened to control more than half of our economy from real foreign competition in job generation and developing our infrastructure.

Our president did not realize that the draconian and idiotic 60/40 equity-sharing in favor to a Filipino individual or corporation over a foreign individual or corporation on extracting natural resources, setting-up domestic-based businesses, education; 30% foreign equity ownership limit in advertising; and zero foreign investment in media sector have contributed economic dislocation of our country as foreign investors have a difficulty of finding a Filipino individual or business which have enough capital to tap 40% at most in a investment project or the worst, using a local dummy to act as a whole owner of a business which in reality (many case) a foreign individual is the one who invested a business with 100% from his pocket.

Due to the draconian and idiotic 60/40 equity-sharing in favor to a Filipino individual or corporation over a foreign individual or corporation has been stipulated in our constitution for more than 75 years, the Philippines has been left behind with the rest of East Asia in terms of gaining massive foreign direct investments that would have generated massive jobs for millions of Filipinos at home but instead, our workers especially those with higher educational attainment prefers to seek high-paying jobs abroad due to lack of high-paying jobs here in the Philippines, leaving their respective families behind that have created another social problem of family dislocation. The remittances of our OFWs cannot guarantee long-term economic stability as the money they remit to their families here in the Philippines tends to spend for consumption not for investment like starting a small business for example as our laws does not guarantee a  better environment for starting a business.

Due to lack of foreign competition in our domestic economy thanks to the constitutional prohibition of 100% FDI in most of our economic sectors, businesses owned with landlord origins does not have a motivation to improve their services to their consumers and increase the wage of their workers which results to general suffering of our people especially the lower class who cannot afford to go abroad for high-paying jobs. Lack of foreign competition has motivate elite oligarch-owned businesses of controlling not just the market share of our domestic market but also the politics through their relatives holding the electiv positions in the government that makes any reform to break the grip of elite oligarch-owned businesses difficult.

President Noynoy Aquino has expanded the list of investment areas and economic activities that prohibit or limit the participation of foreign investors under the 9th Regular Foreign Investment Negative List. The list enumerates the industries and business activities that are open to Filipino businessmen, and defines the extent of participation of foreign investors in areas allowed by specific laws and the Constitution.

Aquino signed Executive Order No. 98 on 29 October, Executive Secretary Paquito Ochoa Jr. said on Friday. The order, which also expands investment opportunities reserved for Filipinos, replaces E.O. 858 that started to take effect in February 2010.

EO No. 98 takes effect 15 days after its publication in a newspaper of general circulation.

“There are investments areas or activities which foreign ownership limitations imposed by law were not included in EO 858. Those changes are now reflected in the ‘List A’ of the new presidential directive,” Ochoa said.

Ochoa said among E.O. 98’s amendments to E.O. 858 are:

  • The foreign ownership and foreign practice limitations imposed under the Real Estate Service Act of the Philippines (Republic Act  9646); (allow foreign professionals to participate)
  • The Philippine Respiratory Act (R.A. 10024); (allow foreign professionals to participate)
  • The Philippine Psychology Act (R.A. 10029) (allow foreign professionals to participate) and
  • The Lending Company Regulation Act of 2007 (R.A. 9474) (allow foreign professionals to participate)

Except for R.A. 9474, which allows foreign ownership of up to 49 percent in lending companies, the three other laws limit the practice of non-Filipinos in the areas of real estate and health care such as respiratory therapy and psychology, unless there is a reciprocity arrangement prescribed by a law.

List A of EO No. 98 specifies the areas of economic activity where foreign ownership is prohibited or limited by the Constitution or laws, among them:

  • mass media (scrap the ban against foreign investments in media and allow 100% FDI)
  • practice of all professions, cooperatives (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI)
  • private security agencies (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI)
  • small-scale mining (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI)
  • private radio communications network, private recruitment for local or overseas employment (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI)
  • advertising (scrap the 70/30 equity restrictions through a constitutional amendment and allow 100% FDI)
  • ownership of private lands, (allow indefinite long-term lease in agricultural lands for foreigners; allow fee-hold ownership of land in residential and commercial lands for foreigners)
  • lending companies, (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI)
  • financing companies and investment houses regulated by the Securities and Exchange Commission (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI)

List B contains economic activities regulated by law such as:

  • small- and medium-scale domestic enterprises (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI)
  • defense-related industry (i.e., manufacture of firearms, etc.) (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI) and
  • businesses that have implications on public health and morals (i.e., gambling, sauna, massage clinics, etc.) (scrap the 60/40 equity restrictions through a constitutional amendment and allow 100% FDI)

List A may be amended any time to reflect changes brought about by new laws, according to Ochoa. (scrap the Foreign Investment Negative List)

List B may be amended not more than once every two years upon the recommendation of the departments concerned and endorsed by the National Economic and Development Authority, or upon NEDA’s own initiative and recommendation, approved by the President and promulgated by a presidential proclamation. (scrap the Foreign Investment Negative List)

“For now, List B stays while the changes to the negative list covers only List A,” Ochoa said.

Under the Foreign Investments Act of 1991 (R.A. 7042), foreign investors are allowed to own 100-percent equity in businesses excluded from the negative list. (amend the 1987 constitution to scrap any references of 60/40 forced equity sharing in favor to a Filipino individual or business against foreigners; replace the 60/40 with equal protection between the Filipino and foreign investors; then, revise the Foreign Investments Acts of 1991)

The bold sentences with parenthesis are my recommendations for total foreign investment and professionals participation.

9 thoughts on “Aquino expands foreign investment limitations list

  1. I agree.

  2. Pingback: Aquino expands foreign investment limitations list | PPFP-PPFA Chairman Charles Baynas on aspects

  3. CoRRECT!

  4. The oligarchs will not give up the Philippines that easily.

  5. Excuse me lang ho,mawalang galang na di ko po yata nagustuhan ang post na ito… pero lahat po ng desisyon na ginagawa ng kung sino man ay may rason, totoo nga pong magkakaroon ng maraming job opportunities kapag ginawang malaki ang porsyento ng foreign-ownership sa isang companya, ngunit hindi po yata tamang hayaan nating bulagin nating ang atin mismong paningin,

    ano na lamang ang mangyayari kung may 100% foreign ownership sa industriya at komersyo?

    Una.

    Totoong magkakaroon ng maraming trabaho, marami ang kikita.. ang tanong totoo bang kikita ang mga trabahador? alalahanin po nating isa tayo sa mga bansang may kung di pinaka.mababang sahod eh mababa…

    Ikalawa

    100% foreign na pagmamay.ari – di nyo po ba naisip na pag ito’y nangyari, eh mas lalaki ang posibilidad na mas lalong di makakuha ng trabaho ang mga pinoy? Kung ako’y isang banyaga, bat ko hahayaang Pilipino ang humawak sa mga trabaho na ibibigay ko? Mas lalaki ang kita ko kapag kukuha ako ng mga experto sa aking bansa… More efficient, more profit. yang ang pag.iisip ng mga banyaga. Di po ba?

    Ikatlo.

    Totoong papasok ang dolyar sa bansa. Sa kadahilanang gagawa ng mga buildings ang mga 100% foreign-owned companies. idagdag pa jan ang puhunang iimbakin nila sa ating mga banko. Hwag naman po tayong magbulag.bulagan, Hindi po atin ang pera, sa kanila po. Tataas ang Piso, pero pag bumalik ang mga banyagang kompanya na iyan sa kanilang bansa dala ang pera nila, eh balik po tayo sa ibaba.

    Ika-apat.

    Dahil nga po banyaga ang may mataas na pagmamay.ari sa business na ilalagay dito sa bansa, nagkaroon ng mga trabaho, naging maganda ang imprastraktura, tumaas ang piso, mas dumami ang pera sa bansa. Natatawa po ako dahil hindi man lang po natin naisip na lahat ng iyan ay mistulang ilusyon lang.. Hind sa atin kumbaga.

    kikita ang mga banyagan kompanya. Hwag naman po sana nating isipin na ang kita nila ay mananatili sa ating bansa. Natural po, ipapadala iyon sa inang bansa nila. Di po ba? Ang magiging sitwasyon ng Pilipinas sa panahong umalis ang mga banyagang kompanya ay parang isang tubong kinunan ng katas. o kaya kalamansing inalisan ng katas, o kahit anong analogy basta ganyang ang meaning. hehe

    Ika-lima

    mga pilipino po tayo… Pilipinas ang ang ating bansa, Huwag naman po sana tayong maging linta sa ibang bansa. o isang parasitiko na nasa bituka ng isang dambuhala. Kapag namatay ang dambuhala eh patay din tayo… Matuto tayong tumayo sa ating paa at wag i.asa lahat sa iba. Bat natin ipapa.utilize ang resources natin sa mga banyaga kung pwedeng tayo ang direktang makinabang.

    Ika-anim

    siguro nga’y totoo ang sinasabing bayad utang ang 60/40 na panukala na iyan… hehe wala namang bago eh… matagal na drama na yan.. mula ng nagkaisip ako nandyan na ang mga bintang na yan…. kada tapos eleksyon… pero di natin iniisip ang mga maaaring mabuting dahilan… Nabanggit ko na ang ilan sa itaas.

    gusto lamang po bigyan ng diin ng panukalang iyan ang ideya ng “Pilipino Muna” kung totoo man ang bintang na bayad-utang, eh di ko po alam, maaaring totoo, maaaring hindi. di po ba masyado ng maluwag ang 60/40 para sa mga alien na papasok sa bansa? kasakiman na po ang 0/100.

    ***

    Hindi po tayo bangko ng mga banyaga… na iimbakan ng pera at palalaguin at i.wi.withdraw… at matapos i.withdraw eh parang alkansyang walang laman… ang panukalang 60/40 ay isang paraan paraan para maiwasan na mangyari ang yaon… hwag naman po nating masamain ang halos lahat at bulagin ang ating mga mata

    Bangon Juan. Matuto kang tumayo sa sarili mong paa.

    • There’s no such thing as silver bullet however allowing 100% foreign equity ownership will reduce the cost-of-doing business on the part of foreign investors and also allowing 100% foreign equity ownership would secure and maximize their investments in a long-run which means can provide more jobs to millions of unemployed Filipinos and reduce the brain drain among the educated Filipinos. Allowing 100% foreign equity ownership will be make easier for technology transfer and reverse engineering to local firms possible. Allowing 100% foreign equity ownership would reduce corruption in the business environment because these foreign investors never need for a local dummy to milk their investments.

      It’s all about property rights in the end of the day. Our national sovereignty will never going to lose with 100% foreign equity ownership and in fact would strengthen it because more investments means more jobs to millions of unemployed Filipinos and more foreign currency reserves to enter in our country means more money for military spending for the defense of our country.

    • Allowing 100% foreign equity ownership of businesses at all economic sectors through removing the idiotic and outdated 60-40 would encourage more foreign multinational companies to set-up in our country for more job creation. More foreign competition means the grip of the local business oligarchs’ control in our economy will lessen and in over time, will vanish naturally.

      More foreign competition in the job market means more option for the workers to choose which businesses gives a better wages and benefits and because of more foreign competition, a particular company (local or foreign) had to increase their wages and benefits in order to attract workers to work for them and not to lose their employees to another competing companies.

      More foreign competition in the consumer market means more option for the customers to choose which businesses gives a better services yet affordable prices and because of more foreign competition, a particular company (local or foreign) had to innovate their services and lower the prices as much as possible in order to attract costumers to buy for their products and not to lose their customers to another competing companies.

      In conclusion: More competition means more option or choice for the workers and consumers.

  6. im not against the 60/40 or the 100% equity law. but history has been a good source of information regarding whether 60/40 really serves true benefit to the filipino people. history will always leave its mark. so,i just want to asked how in the past this 60/40 law in favor for local filipino businessmen contributed to uplift the standard for filipino or it just designed like that to reward the present government cronies for more business monopoly.

    • After 77 years of being stipulated in then 1935 constitution and deepened with the latest 1987 constitution, 60/40 forced equity sharing in favor of a Filipino individuals or corporations, it really does not in favor in Filipino businesses as foreign investors mostly are not willing to invest in our country if their 60% control of their investments should be given up to a Filipino business, therefore lesser foreign investments presence in our country means lesser incentive for Filipino businesses to innovate their business practices.

      I have an American friend from Minnesota who was swindled by her first Filipina wife worth 1+ million pesos from him after they settled in the US, a year after their wedding in Argao, Cebu. Because of what her Filipina wife did to my American friend, she never ever returned here in the Philippines as she was ostracized by her relatives because of her acts.

      Our constitution does not guarantee foreigners a private property rights like forbidding a foreigner to control 100% of what he/she invest or a real property and in order for a foreigner to circumvent the unjust law, they have to use their Filipina wife to act as a dummy with the intention of keeping the investments of a foreigner safe but instead, the Filipina (not all Filipinas married foreigners) wife swindled their foreign husband who should have been in control of his investments legally a money to fund her and relatives unnecessary needs.

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