This one slipped under my radar – I’d known it was coming but it was only pointed out to me last night that Philippines President Duterte had signed it into law on October 29th this year.
So what is the Foreign Investment Negative List (FINL) and why does it matter?
The Philippines is widely regarded as having one of the highest barriers to Foreign Direct Investment (FDI) in SE Asia – as a minor example you can refer back to my article about buying property in the Philippines as a foreigner which talks about some of the restrictions on land and property ownership. The FINL describes the restrictions on foreign investments and the practice of professions and describes those specific investment areas/activities where foreign-equity participation is limited. This might be for reasons of defense, public health risks, protection of local enterprise or Constitutional reasons. Every few years the National Economic and Development Authority (NEDA) reviews the list and makes recommendations for Executive Order approval. The most recent review (the 11th) is President Duterte’s first and the amendments are very much in line with his desire to open up the Philippines to more FDI and encourage his “Build, Build, Build” campaign.
The full Executive Order is here but, in a nutshell, the new FINL will now allow up to 100 percent foreign participation in:
(1) Internet businesses, excluding “mass media”;
(2) Teaching at higher education levels provided the subject being taught is not a professional subject (i.e., included in a government board or bar examination);
(3) Training centers that are engaged in short-term high-level skills development that do not form part of the formal education system (under TESDA or CHED);
(4) Insurance adjustment companies, lending companies, financing companies and investment houses;
(5) Wellness centers.
Of particular interest to a lot of foreigners engaged in building and construction, the 11th FINL also eases restrictions from the previous 25% to 40% foreign participation in contracts for construction and repair of locally funded public works (except those that are foreign funded or assisted and required to undergo international competitive auction).
Now, if only the land ownership side of things can be freed up, I can start considering that beachfront property in Palawan that I’ve had my eye on.
If anyone is interested in knowing more about how to access markets in the Philippines, give me a yell.