MANILA, Philippines – The Joint Foreign Chambers of the Philippines (JFC) is recommending the passage of a bill filed in the Senate that seeks to amend the Foreign Investments Act (FIA) of 1991 to allow foreign professionals to work in the Philippines.
In a statement, JFC expressed its support in excluding “the practice of professions” provision in the FIA’s Foreign Investment Negative List (FINL), saying it is not a useful provision in the act.
JFC said the FINL “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 FINL is intended to catalogue limitations on foreign equity in non-banking business sectors. The constitution creates a policy bias in favor of Philippine citizens, but not a strict legal barrier to the participation of foreign professionals,” JFC said.
“Because millions of Filipinos work abroad and support the Philippine economy with their remittances, 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 (GATS) under the WTO and the ASEAN Framework Agreement on Services (AFAS),” it added.
JFC also pushed for lowering the employment threshold requirement for a $100,000 foreign investment in small and medium-sized domestic market enterprises (DME) “to a more reasonable number.”
Under Senate Bill 1424, employment threshold requirement is sought to be lowered from 50 to 15 direct employees.
The foreign chambers said there is a need for an amendment because the provision was based on a P146 minimum wage in 1991. The current minimum wage is at P466.
"When the law was enacted in 1991, the minimum wage in the National Capital Region was P142 and today, it is P466. P4.3 million is not enough to sustain a labor force of 50 persons at the current minimum wage. So as not to render pointless this provision of the law, and to align it with the spirit of the FlA, there is a need to retain the employment requirement but lower the threshold to a more reasonable number," JFC said.
JFC believes that lowering the threshold requirement will allow smaller investments "to come in and go into industries like tourism."
JFC cited Thailand’s minimum investment amount, saying the country’s low threshold of foreign investment capital requirement “has enabled the Thais to attract a 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.”
“In addition, this low threshold has enabled the development of many small foreign-owned enterprises in the creative industries such as design and IT applications and similar businesses that starts small and subsequently steadily grows employing increasing number of Thai workers,” JFC added.
Senate Bill 1424 was authored by Senator JV Ejercito.