MANILA, Philippines — In a bid to boost food production and farmers’ income, agriculture experts, economists, and government officials expressed on Wednesday their support for the liberalization of foreign investments in the rice and corn industry in the country.
During the lower chamber’s roundtable discussion on bills seeking to increase investments in both sectors, technical consultant of the Foundation for Economic Freedom (FEF) Mari Charina Ubarra said that Presidential Decree 194 restricted foreign investments in the sectors for about 30 years.
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“This provision on divestment by foreign investors after a 30-year period is a ‘unique requirement’ only found in the Philippines, which hobbles further investments in the sector,” according to Ubarra in a joint statement with other officials and lawmakers.
Christopher Ilagan, chairman of the agribusiness committee of the American Chamber of Commerce in the Philippines, said that only those who have invested in the country will notice these restrictions.
“This is a thorn on the side of foreign investors […] This 30-year divestment rule may not be an issue in the first few years, but as you get closer to the [end] period, you rethink your investment. We have a member in Amcham that is covered by the divestment provision,” he said.
Moreover, the power to oversee this divestment provision had been stripped off the National Food Authority (NFA), causing more confusion to foreign investors seeking approval of divestment plans.
Extension of divestment period
Ubarra said the agriculture sector needs about P1.3 trillion for irrigation, post-harvest facilities, and other infrastructure to keep up with the country’s neighboring countries within Asia. This can, however, be reduced through attracting foreign investments.
On the other hand, NFA administrator Roderico Bioco said that his agency alone would need P93 billion to build dryers, rice mills, and other infrastructure in building capacity “to meet the country’s rice buffer requirement.”
According to Ubarra, the divestment period should be extended to about 50 years to entice these investments and modernize the country’s agriculture sector.
Extending the divestment period to 50 years from 30 years for the rice and corn sector “should help draw more attention to the Philippines, especially in the feed milling industry that will allow the country to catch up with our ASEAN neighbors,” said Board of Investments director Raquel Echague.
“Foreign investments in the rice and corn sector now stand at P21 billion and employ more than 4,000 workers,” she said.
Aside from liberalizing foreign investments in specific sectors by changing existing laws, the House of Representatives has engaged the upper chamber to review and update the economic provisions of the 1987 Constitution to boost foreign direct investments into the country.
For her part, Nueva Ecija 3rd District Rep. Rosanna Vergara pointed out that the country needs legislation that “will insulate and protect investments from changes in the political landscape, especially after a new president is elected.”