Aquino retains foreign investments limitations

MANILA, Philippines –  Despite the bid of business groups to ease limitations, the Philippine government has retained its list of investment areas and economic activities with foreign participation restrictions.

On May 29, President Benigno Aquino III signed Executive Order No. 184  that provides the 10th Regular Foreign Investment Negative List, retaining mainly intact provisions of the preceding order: EO 98 of Oct. 29, 2012.

The Joint Foreign Chambers of the Philippines last May 15 submitted to the Office of the President a list of recommendations to improve the business climate for executive and legislative action until the end of the Aquino administration in June 2016. Reducing the list of industries where foreign participation remains limited is one of them.

The list of industries reserved for Filipinos under the 10th Regular Foreign Investment Negative List remained unchanged.

This year’s list kept pharmacy, radiologic and X-ray technology, criminology, forestry and law as professions from which foreigners are banned.

The government, however, allows foreigners to practice various engineering disciplines, science-related professions, real estate services, and interior design, among others, “provided their country allows Filipinos to be admitted to the practice of these professions,” EO 184 read.

EO 184 takes effect 15 days after its publication in a newspaper of general circulation. 

The Philippines’ “negative list” is reviewed periodically by the National Economic and Development Authority. It is composed of sub-lists A and B.

Sub-list A specifies the areas of economic activity where foreign ownership is prohibited or limited by the Constitution or laws. These include:

• Mass media
• Practice of all professions
• Cooperatives
• Private security
• Small-scale mining
• Private radio communications
• Private recruitment for local or overseas employment
• Advertising
• Ownership of private lands
• Lending
• Financing
• Investment houses regulated by the Securities and Exchange Commission

Sub-list B includes limitations on economic activities regulated by law such as:

• Small- and medium-scale domestic enterprises
• Defense-related industry (i.e., manufacture of firearms, etc)
• Businesses that have implications on public health and morals (i.e., gambling, sauna, massage clinics, etc).

Under the Foreign Investments Act of 1991 (RA 7042), foreign investors are allowed to own 100% equity in businesses excluded from the negative list. – Rappler.com