MANILA, Philippines — Removing the restrictions on foreign investors in the Philippines will create a “flexible regime” that would assist in the gradual reopening of the country’s economy, the Department of the Interior and Local Government (DILG) said Thursday.
“The Constitution bars foreign ownership of certain industries in the country, and if we allow foreigners to invest in these public utilities and restrictive areas then, we will have more foreign investments,” said DILG Undersecretary and spokesman Jonathan Malaya in an interview over ABS-CBN News Channel.
“By passing the proposal of the RBH 2 [Resolution of Both Houses No. 2], which is the legislative measure pending in Congress, we are not automatically opening up all of the industries to foreign investments, we are only saying we are creating a flexible regime because the wording is ‘unless otherwise provided by law,’” he further said when asked to discuss the DILG’s proposal on the “surgical amendments” to be made in the 1987 Constitution.
Malaya said to be able to pursue this economic endeavor, there will be a need for legislation, and that is where RBH 2 will come in.
RBH No. 2, which was approved by the House committee on constitutional amendments, retained the ban on foreign ownership of land and property. Under the Constitution, ownership of certain businesses, especially those considered vital, should be 60% Filipino.
The resolution was brought to the House plenary for further discussion.
“There will still be a need for legislation and further discussion, so there will be a gradual reopening of the economy, not a sudden reopening of the economy, as others would want to portray such a move,” he said.
Lifting restrictions for foreign investments nationwide will encourage Filipinos to work in the Philippines, and not seek jobs abroad, Malaya further said.
He said that this was the same argument that they told local government executives when they discussed the “surgical” amendments to the charter.
During the House committee’s hearing on constitutional amendments tackling RBH 2, DILG spokesman and Undersecretary Jonathan Malaya said that 1,489 mayors who are members of the League of Municipalities of the Philippines supported the move to relax the “restrictive” economic provisions.
“We explained it in the way that a lot of relatives go abroad and when they go abroad, they work in foreign companies. Why not allow those foreign companies to come to the Philippines so that your loved ones do not need to go abroad anymore?” he further explained.
The DILG official cited that Vietnam and Indonesia have “much lower unemployment rate compared to the Philippines” because these countries have opened their economy to foreign investors.
Lifting the restrictive provisions would make the Philippines more competitive against its neighbors, provided that this is accompanied by a slew of other reforms to reverse decades of underperformance versus neighboring countries, economic experts however said.