The national government is again in the process of revising the foreign investment negative list to allow more foreigners to practice their professions in the Philippines.
The Regular Foreign Investment Negative List (RFINL) restricts the professional practice and investments of foreign individuals and companies in the country.
“Some of the professions that have reciprocity arrangements [will be allowed]. There are professions which actually have reciprocity provisions that are included in the ninth [RFINL]. In the 10th [RFINL], this was relegated to a footnote,” National Economic and Development Authority (Neda) Deputy Director General for Planning Emmanuel Esguerra told the BusinessMirror.
Esguerra explained that these reciprocity provisions involve bilateral and regional arrangements that the Philippines have entered into.
Under these agreements, Esguerra said, Filipino and foreign nationals can practice their professions in the countries where the agreements are in force.
Esguerra said there are about 33 professions listed in the RFINL, but some of these professions are already covered mostly by bilateral agreements that have reciprocity provisions. “Of course, you might say that from a long-term point of view [this change is] merely cosmetic; but it matters to the potential [professionals] who come in,” the Neda official said.
This change will be made in the 10th RFINL, which is up for discussion and approval at the next Neda Board meeting.
Socioeconomic Planning Secretary Arsenio M. Balisacan
earlier said the next meeting of the Neda Board is scheduled in the third week of January, after the pope’s official visit to the Philippines.
A few years ago former World Bank Philippines Country Director Bert Hofman said the country’s RFINL was “too long” and that the government should work toward shortening the list to attract more foreign direct investments (FDI).
The length of the RFINL points to the number of restrictions on foreign professional practice and investment to uphold the provisions on the 1987 Constitution and protect local professionals and businesses.
The 1987 Constitution limits foreign ownership of certain activities to only 40 percent. It is touted as one of the major reasons for the country’s low level of FDI.
In a study released by state-owned think tank Philippine Institute for Development Studies last year, the Philippines’s FDI increased to only $2.8 billion in 2012, while that of other Asean five countries were significantly higher.
The Philippines’s highest FDI level was recorded in 2006, when FDI reached $2.921 billion, and in 2007 at $2.916 billion. The lowest FDI level was recorded in 2001, at $195 million; and in 2003, at $491 million.