THE HEAD of the government’s economic planning agency said the 11th Foreign Investment Negative List (FINL), which will bring about an “aggressive liberalization” of industries closed to foreign ownership, will be reviewed by Malacañang before the end of the year.
The list was supposed to be taken up during the National Economic and Development Authority (NEDA) Board meeting on Tuesday but the draft was not far-reaching enough, Socioeconomic Planning Secretary Ernesto M. Pernia said.
“I want a more aggressive liberalization. They have shown me a draft, and I find it too puny in terms of the changes. I want a more aggressive one, and we have to be at par with other ASEAN (Association of Southeast Asian Nations) countries,” he told reporters on the sidelines of the Arangkada Philippines forum yesterday in Pasay city.
“The negative list is still a long list and I want to really shorten it drastically,” Mr. Pernia added, noting that the priority industries will be those that can be opened up via legislation.
The FINL outlines the investment limits for foreigners in various industries. Reasons invoked for the restrictions include public health and national security, as well as outright prohibitions under the 1987 constitution.
Asked for the timetable, Mr. Pernia added: “It has to go through NEDA Board first, before the end of the year. I want it all done with all the comments of other agencies by the end of the month.”
He added that there were “too many things” needed to be taken up in the previous meeting that the FINL had to be moved back to the next meeting.
The draft rejected by Mr. Pernia was not made available. Asked what needs to be removed from the current draft, Mr. Pernia said retail trade, the professions, public utilities, and foreign contractors could stand to be opened up.
“The reason why our universities are not highly rated is because we don’t allow foreign professors to teach and be paid, which is already standard in other countries,” he said.
He added that the draft contained some industries that limited foreign ownership to up to 40% only. “I said bring it up to 100% for certain areas,” Mr. Pernia said.
“They thought that it cannot be achieved. I said no, we have to be more aggressive. It’s being revised now. It’s still staff work at NEDA, and then we’re going to show it to the other agencies. Our argument is we have to be at par with other ASEAN countries, we have no choice, otherwise we will be left out,” Mr. Pernia said.
Other areas where foreign ownership is completely prohibited by the Constitution or various laws are: private security agencies; small-scale mining; marine resource exploitation; ownership, operation and management of cockpits; and the manufacture, repair, stockpiling and/or distribution of nuclear weapons.
Areas where foreigners can own stakes of up to 25% are: private recruitment for local or overseas employment and construction and repair of locally funded works like infrastructure and foreign-assisted projects.
Foreigners can own up to 30% in advertising; exploration, development and utilization of natural resources; private land; public utilities; education; rice and corn administration; financing and investment companies; suppliers to state-owned corporations and agencies; defense-related structures; public utility franchises; and private domestic and overseas construction projects.
The list of industries allowing up to 40% foreign ownership include security; defense; those industries that pose a risk to health and morals, such as gambling and bath houses; and certain small-scale and medium-scale enterprises. — Elijah Joseph C. Tubayan