Amid of the 4.4% dropped of Foreign Direct Investment (FDI) in 2018, Senator Sherwin T. Gatchalian on Tuesday suggested to urge early enactment of a law that attains “much-needed legislative reforms designed to make the country more adaptable to current and future business demands and trends,” according to Business Mirror.
Seen in the graph below that the FDI in 2018 had decreased to $9.8 billion from the all time high mark of $10 billion in 2017 ( See report here (DOF PR1074) $20.1-B FDI inflows over 2-year period ‘unprecedented’:Dominguez ).
Further, initiatives were already carried out by the senate. The report stated that “the current chairman of the Senate Committee on Economic Affairs aired the plea following the Executive branch’s renewed call for Congress to lift foreign ownership limits under the 1987 Constitution amid the slowdown of FDI inflow in 2018”.
Gatchalian determined that the growth of the Philippine economy is hindered by the restrictive foreign investment laws. Thus, he proposed to amend economic laws to encourage foreign investors to attain business here in the country.
“Reviewing and updating our laws to encourage the influx of foreign capital through the development of a more investment-friendly climate,” Gatchalian said.
Compare to ASEAN neighboring countries, Philippines lag in terms of captivating foreign businesses that cause to backlog country’s economic growth.
Law to Amend
According to the report of Business Mirror, Gatchalian determined that Senate Bill 2102, or An Act Amending Republic Act 7042 is ongoing. This amendment aims to “update Foreign Investment Act’s declaration of policy to encapsulate inclusive economic growth, advancements in technology, and the dynamic relationships among global and regional economies”.
Respectively, “National Economic and Development Authority, in cooperation and consultation with the Board of Investments, the Department of Trade and Industry, the Securities and Exchange Commission, and other pertinent government agencies” were directed by the said bill to manage the annual review of the country’s Foreign Investment Negative List to ensure that the list is aligned with this policy.