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Attracting foreign investments

While foreign direct investments (FDI) in Southeast Asia were reportedly contracted by 20% in the first half of 2020, FDI in the Philippines rose by 20% during the same period, mainly due to mergers and acquisitions (M&A) deals in agriculture and energy.

Thus, President Rodrigo Duterte’s administration launched the 2020 Investment Priorities Plan which includes qualified activities relating to the Covid-19 pandemic response, the United Nations Conference on Trade and Development (UNCTAD) reported.

“It aims to modernize the Philippine economy, generate several jobs across the country, help solve societal issues on employment, housing, transportation, and safe and secure travel”, the report added.

But the ill-effects of Covid-19 pandemic put our economy in shambles. Our economy registered a 9.5% contraction for the entire 2020 as a result of the government’s imposed stringent measures to contain the health crisis.

The Duterte administration has imposed one of Asia’s strictest lockdowns in the country particularly Metro Manila, home to most of the nation’s banks and businesses.

Nonetheless, no country is spared. It creates economic havoc worldwide. Countries such as the United States, Japan, the European Union are not exempted. Even China where the Covid-19 virus originated and where goods are reportedly cheap is not spared.

To cushion the impact of the decline of the nation’s economy, the Duterte administration is working double time.

A positive economic indicator among emerging Asian economies in its April 2020 survey, the World Bank revealed the Philippines was poised to weather the economic shock caused by the Covid-19 better the some of its regional peers, including Thailand and Indonesia.

Predicated on this, the Duterte administration has vowed to resolve relentlessly the financial contagion into an opportunity for economic growth that would boost business and consumer confidence that are crucial to a robust economic recovery.

Consequently, among the legislative measures the Duterte’s economic managers earnestly requested Congress is to swiftly pass amendments to the FDI aside from the Public Service Act, the Retail Trade Liberalization Act, among others.

Apparently, for some well-known economists in the country, amending the Charter particularly on FDI restrictive economic provisions during this time of pandemic and economic contraction is not prudent.

FDI plays only a minor role in the growth of high performing economies. Among factors that affect investment decisions are adequate infrastructure, skills level, quality of general regulatory framework, clear rules of the game, graft and corruption, political instability, weak institutions, and the rule of law, noted Dr. Florangel Rosario-Braid, a columnist and a 1986 Constitutional Commission Member.

Verily, the administration indicated those pressing issues are crucial to accelerate the country’s economy and sustain its recovery. “The measures complement other approved bills such as the “Build, Build, Build’ program, the Rice Tariffication Law and the Ease of Doing Business Act”.

Nevertheless, pushing the enactment of laws that would attract FD than opening the Charter is the categorical stand of Senate President Pro-tempore Ralph Recto. The fellow is against amending economic provisions of the Charter.

“I’d rather focus on passing laws that would help attract FDI and create jobs such as CREATE (The Corporate Recovery and Tax Incentives for Enterprises), among others, Recto stated.

As reported, the Trade Union Congress of the Philippines (TUCP) has urged the government to provide a wage subsidy to workers in order to keep people from starving and in order to keep businesses afloat, stated TUCP Vice President Luis Corral.

The labor sector also urged the government to take the lead in creating job opportunities through a public job creation program.