THE House of Representatives has approved on second reading a bill amending Republic Act (RA) No. 7042, as amended by RA No. 8179, otherwise known as the “Foreign Investments Act of 1991”, to make the Philippines more accessible to foreign investors and generate more job opportunities for Filipinos and strengthen the expanding economy.
The proposal embodied in House Bill (HB) No. 8764 likewise aims to attract Foreign Direct Investments (FDI) and facilitate transfer of technologies and share expertise to provide more options for more quality goods and services.
Deputy Speaker and Bohol Rep. Arthur Yap, principal author of the bill, explained that RA No. 7042 was enacted to attract investments from foreign sources, and in so doing expand livelihood and employment opportunities for Filipinos.
“However, there are two provisions in the law that appear to be in conflict with the objectives of the Foreign Investments Act (FIA) of 1991,” he said.
Yap said there is a provision related to the “practice of all professions” which is included in the Foreign Investment Negative List (FINL) under the heading “No Foreign Equity”.
“Considering that certain laws governing each profession allow foreign nationals to practice in the Philippines under reciprocity arrangements, it is misleading to include such item in the FINL as a nationalized activity,” he explained.
Yap said that this effectively discourages foreign professionals, who would otherwise be allowed to practice here by virtue of reciprocity, from coming in and sharing their ideas and technical know-how, contrary to the inclusive policy of the FIA.
He said that in the other provision, the FIA allows non-Philippine nationals to invest in small and medium-sized domestic market enterprises (DME) with a minimum paid-in capital of US$100,000 if they employ at least 50 direct employees.
“However, operationally speaking, a US$100,000 enterprise cannot immediately sustain a labor force of 50 persons,” said Yap.