The latest Foreign Investment Negative List deleted professions previously restricted to Filipinos.
Released last May 29, the Tenth FINL reduced in great number the professions reserved to Filipino nationals from the original 26 to only 5. As of now, foreigners can practice Accountancy, Dentistry and Engineer, for instance, in the Philippines. However, Pharmacy, Radiologic and x-ray technology, Criminology, Forestry and Law are activities still reserved for Filipinos.
Although the new FINL did not have many changes compared to the previous list of 2012 since the limits of foreign ownership in domestic enterprises remain untouched – including the restriction for companies with no less than USD 2.5 million paid-up capital to engage in retail trade – the release of this new FINL can be seen as another step of the Philippine government towards a more investment friendly economy.
The Philippines has been criticized for its restrictiveness to Foreign Direct Investment (FDI) when compared to its neighbors. A recent study published by the Economic Research Institute for Asean and East Asia, named FDI Restrictiveness Index for ASEAN: Implementation of AEC Blueprint Measures, found out that Vietnam and Cambodia, countries that are recently liberalizing their economies, have been more flexible on the adoption of measures to promote foreign investments when compared to Philippines, Thailand and Indonesia, nations with more developed and, therefore, more protected industries.
Also, among ASEAN countries, the manufacturing industry seems to be more opened to foreign investments and tax incentives – an industry that the Philippines is struggling to develop with consistency, not only for its geographical difficulties but also due to the lack of investments in its poor infrastructure and high electricity costs. Philippines has averaged an economic growth of 6% over the past 5 years, but continues to register low levels of Foreign Direct Investment (FDI) when compared to its regional neighbors.
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