Business

DOF joins business groups in pushing economic bills

DOF joins business groups in pushing economic bills

MANILA, Philippines — To prompt the labor sector’s recovery from the pandemic, the Department of Finance (DOF) has urged lawmakers to approve the proposed changes in the ownership regime to pull foreign investors into the Philippines.

Finance Undersecretary and chief economist Gil Beltran said the Senate should pass amendments to the Foreign Investments Act (FIA) of 1991, the 85-year-old Public Service Act (PSA) and the Retail Trade Liberalization Act (RTLA) of 2000.

Beltran said the DOF pushes for the passage of these changes to loosen restrictions on foreign ownership in select industries, thereby creating jobs for Filipinos at a time when the labor force is shrinking.

“Medium- to long-term, the passage of the amendments to the FIA, PSA and the RTLA will help bring in more capital, generate more employment and make the economy more competitive. We should make good use of foreign capital and know-how,” Beltran said.

In changing the PSA, the government will define public utilities, which are prohibited from being owned by foreigners under the Constitution. In turn, industries that fall outside the coverage of the law like telecommunications can soon be managed by foreign firms.

In the version approved by the House of Representatives last year, public utilities will be limited to distribution of electricity; transmission of electricity; water pipeline distribution; and sewerage pipeline.

On the other hand, the House and the Senate will convene in a bilateral conference committee to discuss what to do with their conflicting measures on the RTLA.

From a minimum capital of $7.5 million or about P380 million for foreign retailers, the House bill wants to slash the amount to $200,000 or nearly P10 million, while the Senate version intends to set it at P50 million.

If proposed revisions to the FIA will be enacted as well, the practice of professions will be taken out of the negative list. As such, foreign professionals will soon be permitted to move here with the objective of sharing their knowledge with Filipino workers.

The government is trying to reopen the economy — this time, shifting lockdowns to hotbed areas only — in an effort to return the jobs lost during the pandemic. More than 3.8 million Filipinos had to drop out of the labor sector in July due to risks posed by the spread of the Delta variant.

Although unemployment rate fell to a pandemic-low of 6.9 percent during the month, labor force participation rate dropped to 59.8 percent, from 65 percent in June.

Further, underemployment rate or the number of people looking for additional hours of work to increase their income, jumped to 20.9 percent from 14.2 percent.