Finance execs call on Congress to reform 3 older laws

    Business groups and foreign chambers of commerce are calling on Congress to pass three investment reform bills that will strengthen local economy, increase national competitiveness, generate employment, and support speedy recovery from the ongoing health crisis.

    MAKATI CITY — In a statement issued by the Financial Executives Institute of the Philippines (FINEX), local and foreign businessmen disclose three measures needed to amend three older laws: the Public Service Act (PSA) (1936), the Retail Trade Act (RTA) (1954 as amended in 2000), and the Foreign Investment Act (FIA) (1991).

    According to FINEX programs and support officer Lyn Vizcaya, all three measures are far advanced in the 18th Congress and certified by President Rodrigo Duterte.

    “They are a critical reform packages—first advocated immediately after the May 2016 elections as “part of the administration’s socio-economic agenda—and are prominent in the Philippine Development Plan of the National Economic and Development Authority (NEDA).

    In recent years, foreign investors and governments have been following the progress of these reforms closely to determine whether the Philippine economy will be more open to investors or maintain its protectionist reputation. Global FDI in 2019 reached US$2 trillion but only 0.5 percent flowed into the country.

    For decades, foreign direct investment (FDI) rules in the Philippines have also been more restrictive than neighboring economies which receive more FDIs and enjoy higher standards of living and have less poverty and OFWs. While FDI rules are not the sole reason the country has fallen behind Indonesia, Malaysia, Thailand, and Vietnam, our economy is less likely to catch up unless the Philippines opens up.

    Ms Vizcaya explains, the three measures proposed by business groups will relax FDI restrictions and together could result in many billions of new investments in future years, creating more jobs, diversifying the economy, bringing new technology and increasing competition while providing better services to the benefit of Filipino consumers.

    Prior to the call for amendments to the PSA, RTA and FIA, finance secretary Carlos Dominguez has urged the local business sector to support the said bills, stressing that “(the country’s) economy cannot be competitive in the 21st century unless 21st century policies (are adopted)” to amend laws made in the last century.

    Business groups likewise noted that the country’s GDP is not expected to return to its 2019 size until 2023 and the higher unemployment and poverty caused by the pandemic cannot be remedied by indefinite government borrowing alone. They said, domestic investment will remain weak for at least two years, thus making it necessary for the Philippines to attract much more foreign capital at a time when the United Nations Conference on Trade and Development (UNCTAD) predicts global FDI will be lower by 50 percent to less than US$1 trillion due to the pandemic. (TRC/The MiNT)

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