Metro Manila (CNN Philippines, May 28) – Removing foreign ownership restrictions could yield $16.2 billion dollars in potential foreign direct investments for the Philippines, consequently generating new jobs and cutting the jobless rate, according to simulations made by the University of Asia and the Pacific (UA&P).
UA&P economist Leandro Tan presented these findings during a virtual forum hosted by the Department of the Interior and Local Government (DILG), as debates over proposed changes to the economic provisions of the 1987 Constitution continue.
A legislative proposal – Resolution of Both Houses (RBH) No. 2 – aimed at relaxing the 60-40 foreign equity rule has been sailing smoothly at the House, hurdling second reading on Wednesday.
Tan’s study shows the $16.2-billion investments from foreign investors – if they come on full blast – will translate to 1.6 million new jobs, reducing the unemployment rate from the 7.1% recorded in March to 3.8%.
“Job deficits amounting to 141,000 in manufacturing, electricity, gas, water, real estate and business services will be removed,” Tan said. “Job deficits in transportation, public administration and defense, education and other services will be reduced by 390,000 or 33%,” he added.
House Committee on Constitutional Amendments chairperson and AKO Bicol Party-list Rep. Alfredo Garbin downplayed concerns small businesses could hurt from competition with big foreign investors.
Garbin argued the relaxed foreign ownership rules would be needed in capital-intensive industries, like telecommunications and transportation.
The World Bank and other economists earlier flagged that the monopoly or duopoly in industries like power, telecoms, transport and logistics had been hurting consumers for decades.
Competition yields lower prices and better services, benefiting consumers.
“Walang competition ito sa maliliit [There’ll be no competition with small businesses] because we’re speaking of telecoms which needs billions of dollars in investments. We’re speaking of transportation like putting up bullet trains or fast trains…airports,” Garbin said during Friday’s forum, adding that gas and mining industries also currently face a 40% foreign equity limit.
“Even the tycoons, after we passed the RBH 2 on second reading, we had dinner with one of the top ten di ko na i-mention, isa sa pinakamayamang pamilya, tama ang ginagawa nyo kasi kami hindi namin kaya maglagay ng capital dun sa mga investment na ‘yun. Kulang naman ang aming capital so we need the entry of foreign capital in those sectors of the economy.”
[Translation: Even the tycoons, after we passed the RBH 2 on second reading, we had dinner with one of the top ten whose name I won’t mention anymore but belongs to the richest families. They said ‘what you’re doing is apt because we cannot afford to place that much capital in those kinds of investments. We do not have enough capital so we need the entry of foreign capital in those sectors of the economy.]
Article and Photo originally posted by CNN Philippines last May 28, 2021 6:31pm and written by Lois Calderon.
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