Legal BlogUnderstanding Nationalization in the Philippines

October 11, 2012

After the onslaught of World War II, which laid waste to the entirety of the Philippine economy and left the city physically devastated, the task of rebuilding the country fell to those who survived the grim years of the war. This new breed of leaders was fiercely nationalistic: as evinced by the strong push for full Philippine independence from the United States of America, and to any foreign colonial power. This objective was met with astounding speed, and this sense of preserving the value and fruits of the National patrimony for the use and enjoyment of the Filipino family has been a cornerstone in Philippine economic policy and law.

As the world began to change, as ties with other states became stronger, and global competitiveness became an unavoidable product of increased globalization, the Philippines sought to reconcile the demands of international commerce and of national interest.

The law on investments seeks to balance these two principles by prescribing caps on foreign ownership of certain industries, professions, business ventures, and enterprises governed by some controlling national interest.

For professions as found in the Negative List laid out in Executive Order 858, foreign participation is absolutely prohibited. For industries and certain business activities which provide basic goods and services to the public, the state wishes to retain some form of control, hence the imposition of ownership caps, and some form of insurance in the form of minimum inward remittances.

For certain industries related to national defense and government contractors for the production of controlled or closely monitored products such as explosives, ammunition, security systems and gunnery, the appropriate caps are likewise imposed.

In choosing which business to pursue, Triple i will be of great service to give the best advice on the nature of the enterprise, as this strikes the perfect balance between the desire of the state to preserve the preferential right that Filipinos might exercise over the resources of the nation, and the need for the inflow of foreign investments for the holistic development of the Philippine economy, without sacrificing the ideals which called the same into existence.

By: Ryan Robert Flores

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