Eliminating foreign ownership restrictions could yield $16.2 billion dollars in possible foreign direct investments to the Philippines, thus producing new projects and cutting down the jobless rate, based on simulations made from the University of Asia and the Pacific (UA&P).
UA&P economist Leandro Tan introduced these findings through a digital forum hosted by the Department of the Interior and Local Government (DILG), as arguments over proposed changes to the financial terms of the 1987 Constitution continue.
A legislative proposal – Resolution of Both Homes (RBH) No. 2 – geared toward calming the 60-40 overseas equity principle was sailing smoothly in the home, hurdling next reading on Wednesday.
Tan’s study indicates that the $16.2-billion investments from overseas investors – should they come on full blast – can interpret to 1.6 million new jobs, reducing the unemployment rate in the 7.1percent recorded in March to 3.8 percent. “Job deficits amounting to 141,000 in production, electricity, gasoline, water, property and business services will probably be eliminated,” Tan explained. “Job shortages in transport, public administration and protection, education and other services will be lowered by 390,000 or 33 percent,” he added.
House Committee on Constitutional Amendments chairperson and AKO Bicol Party-list Rep. Alfredo Garbin downplayed concerns small companies could damage from competition with large overseas investors.
Garbin contended that the relaxed foreign ownership rules could be required in capital-intensive businesses, such as telecommunications and transport.
The World Bank and other economists previously flagged the monopoly or duopoly in sectors such as electricity, telecoms, transportation and logistics were damaging customers for decades.
Competition yields lower costs and improved solutions, benefiting consumers.
“Walang contest ito sa maliliit [There will be no contest with small companies ] because we are talking of telecoms that needs billions of dollars in investments. We are talking of transport like placing up bullet trains or trains that are fast. . .airports,” Garbin said during Friday’s forum, including that mining and gas industries also now confront a 40% foreign equity limitation.
“The tycoons, once we handed the RBH two on second reading, we had supper with a few of the best ten di ko t -mention, isa sa pinakamayamang pamilya, tama ang ginagawa nyo kasi kami hindi namin kaya maglagay ng funds dun sa mga investment na’yun. Kulang naman ang aming funding so we want the entrance of foreign funds in all those sectors of the market.”