Europe-PH News

Foreign Capital, Professionals to Create More Jobs, Drive Growth

August 01, 2011

European Chamber of Commerce of the Philippines

All countries allow, prohibit, or restrict foreign economic activity within their territory to varying degrees.  Even extremely open economies such as Singapore and Hong Kong maintain some restrictions.  In the 21st century, the movement of workers and professionals remains highly restricted throughout the world and is a sensitive political issue in many capitals.

In contrast, equity capital and goods move across borders with fewer barriers than ever before.  And ideas and information can move almost instantaneously with modern communications, albeit sometimes blocked by the few governments that attempt to control online access of their citizens.

The Philippines is increasingly linked to these global flows -- of goods, ideas, money, and people.  The Filipino economy depends heavily on remittances from nationals whose labor other countries need.  Some products made in the Philippines are in use throughout the world.  Filipino captial also crosses boders into a considerable variety of corporate investments and private bank accounts.

With such strong and growing global ties, the people of the Philippines have moved ahead of their government and the mindset of some public and private sector leaders who support restrictions on the participation of foreigners in the Philippine economy.

In an economy with high unemployment and underemployment, the paramount national interest should be creating jobs in the domestic economy.  It follows that attracting more foreign captial, professionals, and technology to create jobs should be a high priority.

There has been considerable public discussion of constitutional restrictions on foreign equity, including by two commissions appointed by two presidents, but proposals to change other restrictive practices are rare.

The only change in the Foreign Investment Negative List (FINL) since limited foreign investment in retail trade was allowed in 2000 was the opening in 2010 of gambling casinos to majority of foreign equity.

Reforms that shold result in more foreign participation in the economy have not been a priority for the government.  Several JFC recommendations to the DTI, DOF, and NEDA to liberalize the FDI regime and profesionals have not gained traction for lack of senior policy direction,

[To read more, please download attached PDF document (4.85 MB).]

 

Source: BizNewsAsia; News; 30 July 2011

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