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11th Regular Foreign Investment Negative List
By Pia Ranada
@piaranada
www.rappler.com
Published 2:40 PM, October 31, 2018
Updated 11:28 AM, November 01, 2018
MANILA, Philippines (UPDATED) – President Rodrigo Duterte green-lighted a new list of investment areas where foreign ownership is limited or banned.
The 11th Regular Foreign Investment Negative List is only slightly shorter than the previous list approved by then-president Benigno Aquino III in 2015.
It now allows up to 100% foreign ownership of 5 investment areas and activities, including internet businesses.
This new list is promulgated by Duterte's Executive Order (EO) No. 65, signed on Monday, October 29, but made available to media on Wednesday, October 31.
The 5 investment areas and activities that can now be 100% owned by foreigners are the following, according to the National Economic and Development Authority (NEDA):
Updated 11:28 AM, November 01, 2018
MANILA, Philippines (UPDATED) – President Rodrigo Duterte green-lighted a new list of investment areas where foreign ownership is limited or banned.
The 11th Regular Foreign Investment Negative List is only slightly shorter than the previous list approved by then-president Benigno Aquino III in 2015.
It now allows up to 100% foreign ownership of 5 investment areas and activities, including internet businesses.
This new list is promulgated by Duterte's Executive Order (EO) No. 65, signed on Monday, October 29, but made available to media on Wednesday, October 31.
The 5 investment areas and activities that can now be 100% owned by foreigners are the following, according to the National Economic and Development Authority (NEDA):
Internet businesses
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
Wellness centers
Other major changes include allowing foreigners to own up to 40% of contracts for the construction and repair of locally-funded public works, except for infrastructure or development projects covered in Republic Act No. 7718, and projects which are foreign-funded or assisted and required to undergo international competitive bidding.
This, however, is subject to applicable regulatory frameworks, reads the EO.
Previously, foreigners could only have up to 25% equity in such contracts.
Foreigners can also now own up to 40% of private radio communications networks, compared to only up to 20% in the 2015 list.
The easing of such foreign ownership restrictions comes as the Duterte administration pursues an infrastructure push it is eager to implement with the help of foreign governments and firms, especially from China.
The Philippines is supportive of China's One Belt, One Roadinitiative.
Meanwhile, the following investment areas or activities, where up to 40% foreign equity is allowed, were taken out of the list:
Facility operator of an infrastructure or a development facility requiring a public utility franchise
Adjustment companies
The new negative list reflects changes in mass media technology by exempting the "internet business" from the types of mass media enterprises where foreign ownership is banned.
It also widens the list of professions which foreigners are allowed to practice in the country and allows foreigners to teach in higher education insitutions as long as the subject they are teaching is not a professional subject (see the EO for annex of professions and more details).
These changes were seen in List A (Foreign ownership is limited by mandate of the Constitution and specific laws). List B, listing investment areas where foreign ownership is limited for reasons of security, defense, risk to health and morals, and protection of small and medium scale enterprises, was largely unchanged.
Below is List A under the new negative list:
(Rappler indicated parts that were changed, compared to the 2015 negative list. The changes are indicated by the text in bold.)
LIST A: Foreign ownership is limited by mandate of the Constitution and specific laws
NO FOREIGN EQUITY
Mass media, except recording and internet business[not in previous list]
Practice of professions, including radiologic and x-ray technology, law, criminology, and marine deck officers and marine engine officers [pharmacy and forestry in previous list] subject to the Annex on Professions indicating professions where foreigners are allowed to practice in the Philippines subject to reciprocity and where corporate practice is allowed [not in previous list]
foreigners may teach at higher education levels if subject being taught is not a professional subject (included in a government board or bar examination) [not in previous list]
foreigners may teach at higher education levels if subject being taught is not a professional subject (included in a government board or bar examination) [not in previous list]
Retail trade enterprises with paid-up capital of less than US$2.5 million
Cooperatives
Organization and operation of private detective, watchmen or security guards agencies [general term 'private security agencies' used in previous list]
Small-scale mining
Utilization of marine resoures in archipelagic waters, territorial sea, and exclusive economic zone as well as small-scale utilization of natural resources in rivers, lakes, bays and lagoons
Ownership, operation and management of cockpits
Manufacture, repair, stockpiling and/or distribution of nuclear weapons
Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons and anti-personnel mines
Manufacture of firecrackers and other pyrotechnic devices
[No more item for allowing up to 20% foreign equity]
UP TO 25% FOREIGN EQUITY
Private recruitment, whether for local or overseas employment
Contracts for the construction of defense-related structures
[Included in previous list: Contracts for the construction and repair of locally-funded public works except:
Infrastructure/development projects covered in Republic Act No. 7718
Projects which are foreign-funded or assisted and required to undergo international competitive bidding]
UP TO 30% FOREIGN EQUITY
Advertising
UP TO 40% FOREIGN EQUITY
[Not in previous list] Contracts for the construction and repair of locally-funded public works except:
Infrastructure/development projects covered in Republic Act No. 7718
Projects which are foreign-funded or assisted and required to undergo international competitive bidding
Exploration, development and utilization of natural resources
Ownership of private lands
Operation of public utilities, except power generation and the supply of electricity to the contestable market and similar businesses or services not covered by the definition of public utilities [not in previous list]
Educational institutions other than those established by religious groups and mission boards, for foreign diplomatic personnel and their dependents and other foreign temporary residents, or for short-term high-level skills development that do not form part of the formal education system as defined in Section 20 of Batas Pambansa No. 232 (1982) [not in previous list]
Culture, production, milling, processing, trading except retailing, of rice and corn and acquiring, by barter, purchase or otherwise, rice and corn and the by-products thereof
Contracts for the supply of materials, goods and commodities to GOCC, company, agency or municipal corporation
Operation of deep sea commercial fishing vessels
Ownership of condominium units
Private radio communications network [not in previous list]
[Included in previous list: Facility operator of an infrastructure or a development facility requiring a public utility franchise]
[Included in previous list: Adjustment companies]
– Rappler.com
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