Upon reviewing the country's investment climate,foreign businessmen - Foreign Chambers of the Philippines (FCP), American Chamber of the Philippines (Amcham) say that the Philippines needs a sweeping overhaul of its Foreign Investment Negative List (FINL) to enable it competes for foreign direct investments.

A foreign investment negative list is being issued every two years since the enactment of, and pursuant to, Republic Act No.7042, the Foreign Investment Act of 1991.

The Philippines has issued the 7th Regular Investment Negative List for 2007-2009 (7th FINL) in an ongoing effort to promote two key economic goals - the protection of domestic industries and encouragement of foreign investments. The list is embodied in Executive Order No.584 promulgated by the office of the President and took effect in January 2007, comprising of list A and B, enumerating the investment areas reserved to Philippine nationals and those which are open to foreign investors, provided that the extent of foreign equity in such activity is limited to the percentage indicated therein. It includes mass media, the practice of all professions and retail trade enterprises with paid-up capital of less than US$2,500,000.00 as activities where foreign participation is prohibited. But this figure is what the FCP's urge to make it lower.

I have provided links below for detailed list A&B of the 7th FINL edition and some important FAQ needed for foreign investors' reference.

To liberalize FINL is an urgent nescessity as far as Asian economic competition is concerned.  Obviously, the Philippines lags far behind, because it severely restricts job-creating foreign investments in many industry sectors. Neighboring countries including Thailand and Singapore have opened their doors to foreign investments and because of an influx of foreign capital, it reapred substantial gains and outpaced the Philippines.

Even war-torn Iraq had a more welcoming investment code than the Philippines. Iraq allowed 100% foreign ownership and management of Iraqui business entities except in natural resources sections, including oil and with respect to banks and insurance policies.

The country's current investment policy was meant to easily apprise foreign investors of the activities in which they can participate but it turns to be otherwise.

Filipinos are extremely competitive, only Philippine law keeps this country at the tailend of global competition.  The government must immediately do something to remove some of the restrictions in the current FINL, and liberalize it further, open up economy more, spice it up for non-Filipinos - so that we may fully enjoy the potential benefits of globalization. The mass influx of modern technology, professions and knowledge will spur the entry of more capital into the country.

FYI: links       http://www.boi.gov.ph/portal/page?_pageid=113,42474,113_44650:113_59666&_dad=portal&_schema=PORTAL
http://www.philippinebusiness.com.ph/guide/prc01.htm