A long-term approach spanning administrations is necessary to resolve the issue and attract foreign investments, JFC officials said at a press briefing launching the Arangkada Philippines Web site.
“[T]he foreign chambers’ point of view is we don’t like the [ownership] limitation,” said Henry Schumacher, European Chamber of Commerce in the Philippines (ECCP) executive vice-president, as he noted a recent Supreme Court decision declaring that the 40% foreign ownership cap for public utilities should be based on voting shares.
As other administrations had gone the other way and attempted to relax ownership restrictions, Mr. Schumacher said: “[S]o if you’re asking, ‘Where are we now?’ We don’t know.”
John D. Forbes, American Chamber of Commerce in the Philippines (AmCham) legislative committee chairman, said: “it is clearly time to have a national debate on this ... so many people have recommended it in the last two presidencies.”
“[The Aquino] administration boldly chose to promote PPP and if it works, it will give the government the ability to promote social development despite constricted revenues. But they have to invite competition as much as possible by opening these projects not only to the best local firms but to the best firms in the world,” he added.
“We all want quality services -- better roads, more public transport, faster broadband -- does it matter who owns it?”
An easing of ownership limits, they said, should come with an assurance that such decisions won’t be overturned sometime in the future.
“Public-private partnerships, like mining, [have] a payback of 20-25 years, so the whole issue of the PPP and having a good business environment, sound regulatory regime and consistent judicial system cannot be considered separately, because these are the things that attract foreign investments for the long term,” Canadian Chamber of Commerce in the Philippines (CanCham) President Julian Payne said.
An understanding of consistency is perhaps lacking because no administration has ever considered a long-term development plan, they said.
“If this administration now can move twice as fast the previous ones they can catch up, but there are certain projects that require more than just a medium-term plan ... a long-term one up until 2020 or 2025,” Mr. Forbes suggested.
“The problem we have is the direction of the country is different when a new administration takes over, and that is because there is no understanding of the big picture,” Sean Georget, CanCham executive director, said.
Liberal and consistent foreign ownership rules will also serve the government’s plans to join various free trade deals, particularly the Trans-Pacific Strategic Economic Partnership (TPP) currently in the works among nine Asia Pacific Economic Cooperation members.
“I worry that the Philippines may not be able to join the TPP because of its strict regulation of foreign activities -- not just foreign ownership but even the restrictions on 40 professions, which bars foreigners from practicing these specific activities,” Mr. Forbes said.
“You don’t enter a free trade agreement like the TPP without making these changes,” he added.
Apart from loosening up regulatory policies on foreign activities, the chambers identified mining and the fight against corruption as two other areas that would benefit from a long-term plan.
“We have already seen significant levels of decrease in corruption in the Aquino administration, but it will take a long time to eradicate it, because unlike Singapore, the Philippines is not a small city-state,” Austin Chamberlain, AmCham president, said.
With regard to mining, Australia-New Zealand Chamber of Commerce in the Philippines director Ian Porter said: “You don’t come into mining without certainty, because, as we have seen in the case of the Tampakan Project, it’s nearly $6 billion of investments and it will have about 30 years of mine life.”
“You need a long-term plan in mining to address the misunderstanding between the national and local governments,” Mr. Payne said, referring to a provincial government’s ban on open pit mining that is threatening the Tampakan project.
