The National Economic and Development Authority (NEDA) expects a further increase in foreign direct investments (FDI) next year due to the newly-signed 11th regular Foreign Investment Negative List (FINL).
In a press briefing on Monday, Socioeconomic Planning Secretary Ernesto Pernia said he expects FDI exceeding USD10 billion this year even without liberalization yet, as it takes time for easing of these restrictions “to be absorbed by foreign investment community”.
Pernia cited data indicating that FDI inflows already reached USD6.7 billion in first seven months of 2018, higher compared to the same period last year.
“I think next year, we should see some fruition in foreign investor interest. There are investors who have been waiting. Maybe November, December next year will be a window for them,” he said.
President Rodrigo Duterte last week finally signed Executive Order (EO) 65 promulgating the 11th RFINL that will now allow up to 100-percent foreign participation in five investment areas/activities.
These areas include internet businesses which has been excluded from mass media; teaching at higher education levels provided the subject being taught is not a professional subject; training centers that are engaged in short-term high-level skills development that do not form part of the formal education system; adjustment companies, lending companies, financing companies and investment houses; and wellness centers.
Pernia, who is also the NEDA Director General, considered the relaxation of foreign investment restrictions through the FINL as marginal improvements or “baby steps to improving our attractiveness to FDIs”.
“So, we need a lot more work in terms of getting more areas and activities liberalized. That is the desire of the economic managers and that is what is needed to be competitive in ASEAN,” he added.
Pernia said there are many bills already in Congress meant to liberalize other areas that remain restricted from foreign investments.
He cited as an example the definition of Public Service Act (PSA), noting more areas will be opened for foreign participation if this is passed.