The government is moving towards further liberalizing the investment regime in the country as it pushed for the passage of three bills that would open up more economic areas with clearer economic policies to usher in increased foreign direct investments.
Trade and Industry Secretary Gregory L. Domingo said at the Arangkada Forum in Makati yesterday made reference to bills on mining that would provide a more equitable government revenue sharing scheme, overall review of the foreign investment negative list (FINL) and the bill seeking to harmonization of fiscal incentives.
“We are looking at possible changes in legislations. We are targeting to file the draft bills at the start of the Congress and we hope to pass some by the end of this year,” Domingo told a gathering of local and foreign businessmen.
The general direction of the review is to liberalize the FINL, which is a list of economic areas where foreign investments are limited to as much as 40 percent equity participation.
“The review is to see whether the restrictions still make sense and if there are restrictions that we should add. It could go both ways,” Domingo said.
There have been several areas that foreign businessmen led by the Joint Foreign Chambers (JFC) would like to be opened up especially on economic areas where foreign investors are limited.
One restriction that the JFC has been really pushing hard to make the FINL less negative is the ban on the practice of certain professions, which are reserved for Filipinos.
Also the DTI and the Department of Finance are working on the harmonization of fiscal incentives. A proposed bill has long been filed in Congress but both the DTI and DOF are nearing an agreement on the incentives that would be granted to investors in the country.
The proposed Fiscal Incentives Reform Bill is also expected to consolidate all the incentives granted under various laws and implemented by various incentive giving bodies of the government. So far, however, the two main government agencies that grant fiscal incentives to their registered enterprises are the Board of Investments and the Philippine Economic Zone Authority.
On mining, Domingo said the DTI and DOF are also looking a new revenue sharing scheme for mining, which should set a floor share for government that guarantees a payment to government regardless if the company earns or not.
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Source: Bernie Cahiles-Magkilat, Manila Bulletin, 27 February 2013
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