Ownership caps to be tackled in negative list review

AN EASING of ownership limits will be proposed by the Board of Investments (BoI) during an upcoming review of the Foreign Investment Negative List, a senior trade official said.

“We are consulting with lawyers on the foreign ownership rules on construction with regard to allowing foreign contractors,” said Cristino L. Panlilio, Trade undersecretary for investment promotion and BoI managing head.

“[T]here is also a shipping-related area, particularly with maritime training centers, since we are thinking of allowing 100% foreign-owned centers, and finally, we are reviewing whether we can allow foreigners in the operation of public utilities, which directly concerns our PPP (public-private partnership) projects,” he added.

“In fact, we are reviewing the whole list, and the findings will be recommended in the next Foreign Investment Negative List,” he told BusinessWorld last week.

The list is renewed every two years and the current version is set to expire in 2012.

The latest list only allows 25% foreign equity for firms with contracts for the locally funded public works, except for infrastructure and development projects covered by the Build-Operate-Transfer law and those financed through foreign assistance and required to undergo competitive bidding.

“We are asking for the legal opinion of our lawyers whether the constitutional limits on public utilities could be interpreted a different way to allow foreign firms to construct and operate these facilities. Maybe there could be an exemption, because the Constitution isn’t clear,” Mr. Panlilio said.

No specific deadline has been set for the legal assessment, although a local stakeholder consultation will be conducted before the National Economic and Development Authority Board conducts its review in December.

“Consultations will be with different local associations since they will be the ones affected, although there is no schedule yet since the review won’t be until toward the end of the year,” Mr. Panlilio said.
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By: E. J. Diaz
Source: Business World, Oct. 2, 2011
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