A high-level delegation from the European Union (EU) calls for more openness in the country’s foreign investment law. The lawmakers said EU, the world’s largest stockholder, is keen on investing in the Philippines.

The Members of the European Parliament (MEP), led by Werner Langen, was here to explore opportunities for greater European investment.

“We have a very good impression about the government. The Philippines is one of the most relevant partners of ASEAN. We’re most encouraged by the peaceful process in Mind¬anao,” Langen said in a press briefing before their departure.

They reiterate their call that the Philip¬pines should open up more for foreign invest¬ments to come in.

While not mentioning any specifics, many predict that investors are turned off by many restrictions to own businesses here particularly the 60-40 clause under the amended For¬eign Investments Act. Foreigners can own as much as 100 percent equity except in areas in¬cluded in Negative B List. The Negative B List is a list of areas of economic activity where for¬eign ownership is limited to a maximum of 40 percent of the equity capital of the enterprises engaged therein.

EU Ambassador Guy Ledoux said EU is a good trading partner. Ledoux said that EU is interested to invest in the energy sector, infra¬structure, transportation and agricultural and food supply.

“Things are getting better (here) the situa¬tion has clearly improved and the administra¬tion is on the right track,” Langen said.

They however said that there is more to be done.

What’s Wrong?

There is not much direct investments from EU to the Philippines. The legislators said that Vietnam’s Foreign Direct Investment (FDI) is 10 times higher than the Philippines.

“We are convinced that the Philippines is on the right path. We’ve con¬veyed with the Philippine government our concern to change directions. There are still re¬strictions that exist in the Foreign Investments Law,” Langen said after assessing his meeting with the country’s top officials.

In 2007, the EU-ASEAN (Association of Southeast Asian Nations) economic ministers agreed to enter negotiations for the Free Trade Agreement (FTA). In December 2012, Sin¬gapore and EU have concluded their negotia¬tions for the FTA.

The legislators said they would not wait for the FTA to be ratified—the process of putting the investments in could proceed without it.

It may take months to follow up on talks about FTA.

“Global competition is very fast. It’s in the interest with the Philippines and the EU to start the FTA. Of course it’s up to the Philip¬pines to decide what to do with it. We’re not a negotiating team, we’re just advocates of the FTA,” said Robert Goebbels, vice chairman of the Members of the Parliament (MEP).

According to the National Statistical Co¬ordination Board (NSBC), total approved foreign investments for the first nine months of 2012 reached Php86.1 billion. Top three investing countries of 2012 were Cayman Is¬lands, Japan and Singapore.

Arangkada Philippines, a project of Joint Chambers of Commerce, said the Philippines in 2011 has a total FDI of US$1.3 billion—the lowest among the six countries in ASEAN. Sin¬gapore received the strongest inflow, US$64 billion, followed by Indonesia US$18.9 billion; Malaysia US$12 billion; Thailand US$1.9 billion and Vietnam, US$7.4 billion.

The lawmakers met with Trade and In¬dustry Secretary Gregory Domingo, Central Bank Gov. Amado Tetangco, Foreign Affairs Secretary Albert del Rosario and officials of the European Chamber of Commerce as well as House Speaker Feliciano Belmonte, Sen. Edgardo Angara and Justice Secretary Leila de Lima. They also traveled to Cotabato City to launch a Php29 million de-mining project—a European Union show of support for de-min¬ing efforts in Mindanao.

It remains unclear how the EU investors are going to wait. One thing is certain, the world’s largest stockholder is just about ready to do business here and pour in much-need inflow of investments.

Source: Expat Newspaper; Features; 28 February 2013