MANILA - An international property consultancy firm urged the Philippines to implement structural, economic, and constitutional reforms to be able to attract more foreign investments.
David Leechiu, country head and international director of Jones Lang LaSalle Philippines, Inc. (JLL), said these reforms will ensure the growth in foreign investments over the long term.
“We have to do constitutional reforms, but if we don’t do this, how can we [improve] in the next 15 to 20 years?”
According to Leechiu, current laws on corporate and property ownership, land leasehold terms, and taxes are the barriers to foreign investments.
Foreign investors are not allowed to own land in the Philippines.
For lease, it must not exceed 50 years, renewable for another 25 years.
Foreign capital in corporations is limited to 40%; 60% must be owned by Filipinos.
Leechiu said the Philippines is relatively inaccessible to foreign investors compared to other countries in Asia.
Some Asian countries allow 50-100% foreign ownership in corporations and have more attractive land ownership incentives and land leasehold terms.
Leechiu said JLL is recommending that the Philippines allow foreign ownership of corporations to at least 50%, and lengthen of land lease terms to 80–90 years.
He also emphasized the importance of reducing corporate income tax and personal income tax rates.
He said the Philippines is in a good position to attract foreign investments because of its large population and emerging middle class.
However, even though the Philippines is one of the cheapest countries to invest in across the Asia Pacific, foreign investments is still low.
With planning and reforms, Leechiu said the projection of a 50% growth in real estate market size by 2030--a US$300 billion real estate market--is attainable.
“[We are] one of the few countries left with strongest restrictions. We can do much better if we were less restrained…The more open [we are], the more foreign investments [we’ll attract]," he said.