Various Philippine industries will be more attractive to foreign investors and could generate fresh capital if the restrictive economic provisions of the 34-year-old Constitution are amended, according to House Ways and Means Committee Chairperson and Albay 2nd District Rep. Joey Salceda.
During the continuation of the public hearing on Resolution of Both Houses (RBH) Number 2 by the Committee on Constitutional Amendments last Tuesday, Salceda identified several industries that could become lucrative once foreign investors are allowed to participate in.
The Bicolano lawmaker said these industries have high return on equity (ROE), but their full potential is being hindered by the constitutionally-mandated foreign equity restrictions.
“Transportation, 21.47%; railroads, 22.73%; financial Services, 61.83%. Napakalaki ng ROE which invites competition,” Salceda said.
ROE is a measure of the profitability of a business in relation to its equity, or ownership of assets. ROE measures how much profit can be generated in relation to a shareholder’s equity, which means the higher the ROE, the greater the return on one’s equity, thus making a business more attractive to investors.
Other industries Salceda mentioned were telecom services, cable TV, farming and agriculture, brokerage and investment banking, and investments and asset management.
Salceda’s conclusions were supported by a representative of the Joint Foreign Chambers of the Philippines, American Chamber of Commerce of the Philippines Senior Advisor John Forbes, who listed industries that foreign investors are interested in.
“The question came up from Congresswoman Quimbo to Sec. Lopez; who are these investors that want to come in? It’s fairly obvious that advertising, you can make the Philippines a global hub for advertising,” said Forbes.
According to Forbes, “you can make the Philippines a regional hub for education, as Singapore has become with European and American universities investing.”
“In energy, renewable energy, the current interpretation is that when the sun shines on the Philippines and the wind blows across you cannot have foreigners operating solar energy or wind turbine farm––so you’ve kept out more capital coming into electricity, particularly into renewable energy,” lamented Forbes.
Apart from these industries and those mentioned by Salceda, the AMCHAM advisor also identified the following sectors that could be opened up to foreign investors for capital: manufacturing, media, telecommunications, delivery services and marine ferry services.
