December 7th, 2021
As principal author of the measure, I laud the Bicameral Conference Committee for approving the bicameral report on the amendments to the Foreign Investment Act. I also congratulate the House delegation, headed my Vice Chair in the Ways and Means Committee, Rep. Sharon Garin, and our counterparts in the Senate.
The approval of this measure complements the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, in attracting foreign investments, for the following reasons:
First, reducing the number of direct hires required by foreign employers, from 50 to 15, will help encourage smaller foreign investors to locate in the Philippines. A key thrust of CREATE is to try to invite foreign investors who can contribute to the economy regardless of size.
Second, allowing enterprises identified as “startup enablers” to be fully owned by foreigners will encourage investments in cutting-edge industries that are not yet present in the Philippines. These areas include financial technology, precision agriculture, health technology and other higher-order technological enterprises that are crucial to Philippine long-term growth and resilience.
I recently gave a speech to the Federation of Indian Chambers of Commerce and Industry, encouraging Indian businesses, the world’s #2 for startups next to the United States, to consider investing in the Philippines. Startups are solutions-based and the Philippines will not lack for problems that require efficiency-enhancing solutions from tech companies. The FIA amendments, no doubt, are also good news for them.
Third, allowing professions not governed by special laws to be entered in by foreigners also allows the country to learn from professionals in STEM and other key professions. The inability to hire their own professionals has been a key constraint to investors who would otherwise have invested in the Philippines.
Fourth, subjecting officials involved in investment promotions to the Anti-Graft and Corrupt Practices also provides an additional safeguard against extortion of potential investors by government officials, and is a step towards greater ease of doing business.
Moving forward, I encourage the Inter-Agency Investment Promotion Committee, institutionalized under the proposal, to perform its mandate of truly creating new markets for Philippine products and promoting the Philippines as a market and hub for global investments.
I also reiterate my call for the release of the Strategic Investment Priorities Plan (SIPP) under CREATE, so that the IIPC will have a tool to promote the Philippines as an investment destination.