The legislators of Philippine passed the House Bill 300 that would amend two provisions of the Foreign Investment Act of 1991.The aim of the bill is attracting foreign investment that has been declining since last year.
The two targets of the amendments are:
the removal of the phrase of "practice of professions" from negative list of foreign investment
2. reduction in the compulsory local hiring by foreign investors.
The Bill 300 was introduced because as per the Central Bank of Philippines net FDI in the country decreased from US $ 5 billion in 2018 to US $ 3.1 billion in 2019. The businessmen and economist argue that due to strict laws on foreign ownership and employment restriction there has been declined in the foreign direct investment.
The exclusion of 'practice of professions' from the amendment removes the restriction and provides for attraction more skilled foreign professionals to broaden the skills and knowledge of Flipinos and thereby increasing the competitiveness of industry on domestic and international labour markets. Secondly, the reduction in requirement of local employees would promote the foreign investor to hire best talent for the sector roles.
Thirdly, the new amendment provides that the foreign investor could setup 100% wholly owned small and medium enterprises and to be eligible foreign investor foreign investor should utilize advanced technology as recognized by Department of Science and Technology or hire 15 local employees
The government introduced in September 2019 the Corporate Income Tax and Incentives Rationalization Act (CITIRA) that reduce corporate income tax as well as rationalize specific tax incentives. These are mainly to give fillip to foreign investment in the country.
Philippines has increasing competition from its ASEAN peers- Malaysia, Vietnam, Thailand, Malaysia and Indonesia in attracting FDI.
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