Philippine leader gives order to start easing foreign business restrictions

MANILA (Reuters) - Philippine President Rodrigo Duterte has instructed government agencies to scrap or start easing barriers that foreigners face in multiple business and employment sectors, part of moves to liberalize an economy long criticized as restrictive.

Philippine President Rodrigo Duterte participates in the opening session of the 15th ASEAN-India Summit at the Philippine International Convention Center in Manila, Philippines, November 14 2017. Reuters/Ezra Acayan/Pool

The directive, made public on Thursday, said the aim was to pursue stronger economic growth, create fairness and to enable partnerships to develop.

Duterte’s directive ordered government agencies to “take immediate steps to lift or ease restrictions on foreign participation”, including those that will require new legislation.

The directive specified eight areas or activities where changes will be made, including construction and repairs for government-funded projects, private recruitment for both domestic and overseas employment, teaching at higher education levels, as well as processing and “trading except retailing” of rice and corn.

Some of the eight are broad and open to interpretation, such as retail trade enterprises, domestic market enterprises and public services other than those recognized as utilities. There remains some debate in the Philippines about what is considered a utility.

The directive, dated Nov. 21, also called for openness in “particular professions where allowing foreign participation will redound to public benefit”.

For several years, the Philippines has been posting some of Asia’s fastest rates of growth> Its third-quarter expansion of 6.9 percent from a year earlier beat forecasts. [nL3N1NL1AE]

The government is targeting annual growth this year of 6.5-7.5 percent, propped up by higher state spending and stronger exports and agriculture output.

But investors have lamented the obstacles to foreign firms, many because of archaic laws that limit foreign participation, some of which require time-consuming legislative amendments.

Foreign direct investment into the Philippines is dwarfed by that of rivals such as Thailand, Vietnam and Indonesia, something the government is eager to change by slashing red tape and launching an ambitious, six-year, $180-billion, “Build, Build, Build” infrastructure splurge, which would modernize airports, roads, railways and ports. [nL4N1KT1GA]

Reporting by Martin Petty; Editing by Richard Borsuk