As three key economic reform bills advance, government leaders are giving them a last-minute push, assuring there are safety nets for local investors.
At a forum hosted by the British Chamber of Commerce of the Philippines (BCCP) over the weekend, legislators briefed the BCCP members led by its chairman Chris Nelson on the status of the following: the Retail Trade Liberalization Act (RTLA), which is up for signature; the Foreign Investment Act (FIA) which has passed the bicameral committee and; the Public Service Act (PSA) which is on second reading in the Senate.
Sen. Aquilino Pimentel III said the RTLA has been transmitted to the Office of the President last November 10.
Pimentel both houses agreed to liberalize the retail trade sector in two ways. First, is the lowering of the minimum capitalization requirement for foreign retailers from $2.5 million to P25 million to make it easier for foreigners to invest in the retail sector.
“Should this happen, then one of the purposes of the law, the creation of more jobs for the Filipino people would be achieved,” he said.
Pimentel said the second way to open retail is that the enrolled bill further liberalizes the sector by deleting the provision “deserving enterprises with less than the minimum paid up-capital requirement is exclusively for citizens and corporations wholly-owned by Filipinos.”
“In short, (retailers)I below this threshold amount for an equity will now be allowed up to 40 percent. There is still a per store requirement, but we made sure the amount is reasonable,” Pimentel said.
On PSA, Trade Undersecretary Ceferino Rodolfo said the best way to improve services in the country is to open it up to allow greater competition .
“If you look at academic literature and even pragmatic policymakers and their thoughts on liberalization reforms, we should have liberalized services ahead of liberalization in goods.
For you to attain competitiveness in goods, you need to have enablers and these are very important for the Philippines in … for example, how we move logistics around in an archipelago,” Rodolfo said.
On the Senate’s deliberations focusing on security considerations in opening up investments in infrastructure particularly telecoms, Rodolfo said the best way to prevent the entry of malicious investors is not to go for a blanket prohibition that prevents the entry of everyone.
Rodolfo said the dominant investors that want to come in are those with no malicious intent.
“By having that blanket prohibition, we are (also) preventing the entry of this dominant investors,” Rodolfo added.
He said government welcomes the inclusion in the FIA bill of a provision on a robust security review “that will both be effective, but at the same time not whimsical.”
“Those investors who have malicious intent can effectively be blocked without necessarily blocking everyone. With the passage of a PSA and even just the FIA with a robust security review, it will even strengthen our national security conditions.
Without putting on a date on the passage of these bills, Rodolfo quoted Rep. Sharon Garin who said the FIA now has a consolidated version and will be transmitted to the President before the Christmas break.
On the PSA, Rodolfo said “I really hope that we can have a last push, as this really is the game changer but unfortunately, it stayed in the plenary deliberations in the Senate.”
Rodolfo noted there are investors waiting for the passage of the PSA that are tangible investors leads.
He also assured that in RTLA, thresholds would provide a safety net for local players particularly the micro, small and medium enterprises. – Irma Isip
