UK to PH: Relax foreign ownership limit
MANILA, Philippines – To attract investments on renewable energy, the Philippine government should consider relaxing the law that limits foreign ownership of land businesses in the country to 40%.
UK Trade envoy to the Philippines George Freeman and British ambassador to the Philippines Asif Ahmad made the call during their visit to the Department of Energy on Tuesday, June 17 – reiterating a statement made by former UK envoy to the Philippines Stephen Lillie in February 2013.
Freeman said easing the cap on foreign ownerships is one way of encouraging investors to enter into more energy projects in the Philippines.
“You need certainty of ownership and be able to convince financiers that the project is secured for the long term…To promote that, we need to revisit the 60-40 rule,” Freeman said.
The proposal supports a current move in Congress to amend economic provisions of the 1987 Constitution via charter change, which President Benigno Aquino III has so far not supported.
Freeman and Ahmad visited different government agencies Tuesday to promote potential partnerships in the renewable energy, and oil and gas sectors.
UK is one of the largest European investors in the country, with around $US1 billion in foreign direct investments from companies such as Shell, Unilever, HSBC, Standard Chartered and GSK.
With energy demand in the Philippines expected to increase by 5% per year, Energy Secretary Carlos Jericho Petilla said easing the 60-40 rule is vital in promoting investments on renewable energy since it requires a large portion of capital.
“They are really just looking on (renewable energy) projects which can be owned 100% by foreign firms – something that our legislators can look into. Solar and wind energy projects are all capital-intensive than coal- or gas-fired plants and we need foreign investors for these projects. So, to get that, we have to revisit the 60-40 law,” said Petilla.
The chairman of the House committee on energy, Oriental Mindoro 2nd district Representative Reynaldo Umali was also present at the DOE office during the UK envoys' visit.
The House proposal being pushed by Speaker Feliciano "Sonny" Belmonte Jr seeks to insert the phrase "unless otherwise provided by law" to provisions in the Constitution that limits foreign ownerships of land and businesses to 40%.
This will be done via the legislative route, where charter change will be tackled in the same way as bills, instead of through a Constituent Assembly. (READ: Cha-cha by legislation - constitutional or not?
The resolution has hurdled the committee level and is set to be discussed in plenary.
Should it be passed by Congress and ratified in a plebiscite, lawmakers can then pass implementing laws imposing new rules on foreign ownership.
Business groups support charter change for economic provisions.
Aquino, meanwhile, has so far remained firm that amending the constitution is not among his priorities. – Rappler.com