Investments and Incentives Code of the Philippines
Posted on November 5th, 2008
House Bill 5241, or the “Investments and Incentives Code of the Philippines†being sponsored by Philippine House Speaker Prospero Nograles seeks to codify various incentive-giving laws and statutes to enhance the country’s investment strategies and programs with the aim to attract foreign investments.
To compete for development capital in the global market, Speaker Nograles believes that there is a need to assure foreign investors of a just and equitable return of investments through an updated and coherent, market-responsive investment policy which at present is confusing and unmanageable to both the government and investors. While Speaker Nograles should be congratulated for a valiant effort in coming up with this bill, he should focus instead on developing a more structured policy on overseas Filipino workers.
Remittances from our heroes abroad still remain to be the biggest source of foreign currency, surpassing even foreign direct investment. I am wondering why Speaker Nograles would rather tailor our laws to suit the needs of foreigners than focusing on these Filipinos who are actually bringing the cash in. It is true that diversification of sources of foreign capital is encouraged in order to attain a more or less stable economy that doesn’t rely on a single source alone. However, considering that several issues are yet to be addressed by Congress in terms of streamlining the economy and improving taxation laws, I feel that the Incentive Code being proposed by Speaker Nograles should be given less priority.
Recent news has reported beheadings and execution of some of our kabayans abroad, and a number of documentaries are already telling the plight of these OFWs. This is a reality being faced by every Filipino family who has one of their members working abroad. Despite the fact that our economy is heavily reliant on the remittances from them, the government has been remiss in adopting a more stringent and effective policy on OFWs.
I’m a foreigner and would like to invest in hospitality and tourism business in Philippines. This business involves investing heavy capital sum into development for long term operation. unfortunately the law forbids foreigners to own land in Philippines. Also foreigners can only hold 40% of a Company owning the land property and Philippine shareholders the majority 60%. Not every foreign investor would like to have a local partner nor is it easy to find a trustable local partner. This ownership system will certainly discourage foreigners to invest in many interesting projects involving land property for which the capital sum invested in tourism development is easily 10-100 times the value of the land (depending on project quality). As such projects takes 8-15years to recover its investment, to invest large sum and not owning the land or not having majority ownership of the company, investors can look for better alternatives throughout Asia. The law also stymified and results in low investment in Philippine tourism business,The motto of Bare land is of no value is true if it is not develop. So why not allow serious investors to buy land to develop to create jobs, incomes and taxes for the government. Think about it.