A new presidential directive expanding the investment areas and economic activities reserved for Filipinos has been signed, Malacañang announced on Friday.
Executive Order 98 clarifies the industries and business activities that are open to Filipino entrepreneurs, and defines the extent of participation of foreign investors under the 9th Regular Foreign Investment Negative list, palace officials said.
President Aquino signed EO 98 on October 29, said deputy Spokesperson Abigail Valte. She added that it will become the reference point for investors and foreigners who want to set up shop in the country.
EO 98 replaces EO 858, or the 8th Regular Foreign Investment Negative list, which has been in effect since February 2010.
Under the new EO, business and enterprises are classified into two lists.
“There are investment areas or activities in which foreign ownership limitations imposed by law were not included in EO 858. Those changes are now reflected in the ‘List A’ of the new presidential directive,” Executive Secretary Paquito Ochoa explained in a statement.
List A details the limitations imposed on non-Filipinos in the areas of real estate and health care under the Real Estate Service Act of the Philippines (RA 9646), the Philippine Respiratory Act (RA 10024) and the Philippine Psychology Act (RA 10029), which were all enacted in 2009. In the past, foreigners had been allowed to provide these services.
It also covers the Lending Company Regulation Act of 2007 or RA 9474, which allows foreign ownership of up to 49 percent in lending companies.
Meanwhile, List B contains economic activities regulated by law such as small- and medium-scale domestic enterprises, defense-related industries like the manufacture of guns, and businesses that have “implications on public health and morals” such as massage parlors and gambling, Ochoa said.
Guide for investors
In a radio interview aired over state-run Radyo ng Bayan, Valte said, “Marami hong naghihintay dito dahil sina-summarize ho niya, kung sakaling nagkakaroon ng bagong batas, naisasama ho ito doon sa List B kung saan po pwede.” (Many people are waiting for this because it summarizes what should be included in List B whenever new laws are passed.)
She added: “‘Yung List A po kasi pwede po ‘yan amyendahan sa kahit anong panahon para po masama kung sakali hong merong bagong panukalang batas na ipapasa ang Kongreso so idinadagdag po ‘yan agad. Pero ‘yung pangalawang listahan po kasi, ‘yung List B, pwede lang po ‘yan amyendahan once every two years.” (List A can be amended anytime, whenever Congress passes a new law. But List B can only be amended once every two years.)
Under the Foreign Investments Act of 1991 (RA 7042), foreign investors are allowed to own 100-percent equity in businesses excluded from the negative list.
In response to questions on whether the EO might limit foreign investments in the country, Valte said the opposite would be true.
“This will not discourage them. All the foreign investors are very cognizant about the laws that we have, so this actually acts as a guide to them,” she said.
Valte reiterated President Aquino’s oft-repeated pronouncement that a rules-based society would encourage growth and progress in the country.
EO No. 98 takes effect 15 days after its publication in a newspaper of general circulation. – YA, GMA News