PRESIDENT Ferdinand Marcos Jr. issued Executive Order (EO) 113 updating the list of industries that limit or bar foreign investments.
Signed on April 13, EO 113, Promulgating the Thirteenth (13th) Regular Foreign Investment Negative List (RFINL), breaks down industries in which foreign investors may not pour capital in and are “reserved to Philippine nationals, subject to the exceptions and conditions indicated therein.” The issuance was anchored on Republic Act 7042, or the Foreign Investments Act of 1991, which mandates the formulation of an RFINL, covering investment areas or activities “which are open to foreign investors and/or reserved to Philippine nationals.” As stated on the circular, industries such as mass media, including internet-based platforms; the corporate practice of professions like architecture; private security agencies; small-scale mining; and utilization of marine resources in archipelagic waters, territorial sea and exclusive economic zone, among others, are reserved for Filipino ownership.
Meanwhile, an increase of up to 25 percent in foreign equity is allowed for the private recruitment sector and contracts for the construction of defense-related structures.
Up to 30-percent foreign equity is allowed for the advertising sector.
On the other hand, some of those where up to 40-percent foreign equity is authorized include ownership of lands; retail trade enterprise with paid-up capital of less than P25 million; educational institutions other than those established by religious groups and mission boards; and operation of public utilities, subject to existing laws and regulations.
EO 113 allows 100-percent foreign equity in the operation and management of telecommunications “in case the country of the foreign national accords reciprocity to Philippine nationals, and up to 50-percent foreign equity in the absence of such reciprocity.” The order also lists industries which allow 40-percent foreign equity on the condition that they are regulated for reasons of “security, defense, risk to health and morals, and protection of small- and medium-scale enterprises.” Among them is the manufacture, repair, storage, and/or distribution of products and/or ingredients requiring Philippine National Police clearance such as firearms, gunpowder, dynamite, blasting supplies and ingredients in the making of explosives; the distribution and manufacture of dangerous drugs as authorized by law; and micro and small domestic market enterprises with paid-in equity capital of less than the equivalent of $200,000.
