By Louella D. Desiderio (The
Philippine Star) | Updated February 13, 2014 - 12:00am
MANILA, Philippines - The Joint
Foreign Chambers (JFC) support a proposed measure seeking to change the foreign
investments law by removing restrictions on practice of professions and
lowering the employment threshold for small and medium enterprises.
“We recommend the passage of the two
amendments sought in SB (Senate Bill) 1424,” the JFC said in a statement
yesterday.
SB 1424 filed by Sen. Joseph Victor
Ejercito seeks to amend Republic Act 7042 or the Foreign Investments Act
(FIA) by excluding the practice of
professions from the Foreign Investment Negative List (FINL) and by reducing
the employment threshold to 15 direct employees for a $100,000 foreign
investment in small and medium sized enterprises.
The JFC expressed the view that the
practice of professions is not a germane provision in the FINL.
It noted that there are 47 laws
governing the practice of specific professions, and 42 contain reciprocity
provisions allowing foreigners to practice their profession in the Philippines,
provided their countries of origin also allow Filipinos to practice these.
“Considering that certain laws
governing each profession allow foreign nationals to practice in the
Philippines under reciprocity arrangements, it is extremely misleading to
include such item in the FINL as a nationalized activity. This effectively discourages
foreign professionals who could otherwise be allowed to practice here by virtue
of reciprocity from working in the Philippines and sharing their ideas and
technical know-how, contrary to the inclusive policy of the FIA,” the JFC said.
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With many Filipinos working abroad and
supporting the Philippine economy with their remittances, the groups noted that
it should be in the national interest to seek the reduction of restrictions on
professionals in other countries, for example, in the negotiations on the
General Agreement on Trade in Services under the World Trade Organization and
the Association of Southeast Asian Nations Framework Agreement on Services.
“At the same time, having more foreign
professionals practicing in the Philippines can bring new skills, ideas,
connections and integration into global networks of service providers, and
support sunrise sectors like R&D (research and development), medical travel
and retirement,” the groups said.
The JFC also said that while the FIA
allows 100 percent foreign ownership in domestic market activities above a
minimum investment of $100,000 with advanced technology or employing 50 direct
employees, the amount of investment which is only a little over P4.3 million
operationally speaking, cannot
immediately sustain a labor force of 50 persons.
When the law was enacted in 1991, the
minimum wage in the National Capital Region was P142 and today, it is P466.
“So as not to render pointless this
provision of the law, and to align it with the spirit of the FIA, there is a
need to retain the employment requirement but lower the threshold to a more
reasonable number,” it said.
Such, the groups said, would allow
smaller investments to come in and go into industries like tourism which would
facilitate the entry of more foreign nationals and investments.
The groups added that the government
should look at Thailand where the minimum investment amount is 1 million baht
(approximately $33,000), excluding the cost of land and working capital, and
small and medium foreign-owned enterprises in certain activities with minimum
investment of 500,000 baht (approximately $16,700), excluding the cost of land
and working capital, are also allowed.
“The low threshold of the foreign
investment capital requirement in Thailand has enabled the Thais to
attract many smaller foreign investors
who have enriched the country’s vibrant tourism industry by providing a larger
variety of cuisines and special services for foreign visitors, including in a
variety of languages,” it said.
In addition, the low threshold has
enabled the development of many small foreign-owned enterprises in the creative
industries such as design and IT (information technology) applications and
similar businesses that starts small and subsequently steadily grows employing
increasing number of Thai workers.
The JFC has the American, Australia-New Zealand, Canadian,
European, Japanese and Korean foreign chambers along with the Philippine
Association of Multinational Companies Regional Headquarters as its core
members.
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