MANILA, Philippines - An executive order (EO) seeking to expand the economic activities and investment areas reserved to Philippine nationals has been signed by President Aquino.
President Aquino signed last Monday EO no. 98, which updates the 9th Regular Foreign Investment Negative list by reflecting the provisions of newly-enacted laws.
The Regular Foreign Investment Negative List specifies the business activities that are open to Filipino businessmen and defines the limits in the participation of foreign investors in areas stated by laws and the Constitution.
The new EO replaces EO no. 858, which has been in effect since February 2010.
“There are investments areas or activities which foreign ownership limitations imposed by law were not included in EO 858. Those changes are now reflected in the ‘List A’ of the new presidential directive,” Ochoa said.
Deputy presidential spokesperson Abigail Valte said the new EO would not turn off foreign businesses and would even serve as a guide to prospective investors.
“All the foreign investors are very cognizant about the laws that we have. This actually acts as a guide to them,” Valte said.
“This becomes a summary of all the prohibitions, the limitations, and the areas that are free for foreign investments. So they do not look at this as something that is discouraging. In fact, many are waiting for this,” she added.
Amendments under the new EO include the foreign ownership and practice limits imposed under the Real Estate Service Act of the Philippines, the Philippine Respiratory Act and the Philippine Psychology Act, all enacted in 2009 and the Lending Company Regulation Act of 2007.
The real estate, respiratory and psychology acts limit the practice of non-Filipinos in the mentioned areas unless there is a reciprocity arrangement prescribed by a law.
On the other hand, the Lending Regulation Act allows foreign ownership of up to 49 percent in lending firms.
Other areas were foreign ownership is prohibited or limited by the constitution or laws include mass media, practice of all professions, cooperatives, private security agencies, small-scale mining, private radio communications network, private recruitment for local or overseas employment, advertising, ownership of private lands, lending companies, financing companies and investment houses regulated by the Securities and Exchange Commission.
The EO also has a List B which contains economic activities regulated by law such as small and medium-scale domestic enterprises, defense-related industry and businesses that have implications on public health and morals like gambling, sauna and massage clinics.
Ochoa said List A may be amended any time to reflect changes brought about by newly-enacted laws. On the other hand, List B may be amended not more than once every two years upon the recommendation of economic managers, subject to the President’s approval.
“For now, List B stays while the changes to the negative list cover only List A,” Ochoa said.
EO No. 98 will take effect 15 days after its publication in a newspaper of general circulation.
The Foreign Investments Act of 1991 allows foreign investors to own 100-percent equity in businesses that are not part of the negative list. - By Alexis Romero