The proposed latest version of the Foreign Investment Negative List (FINL) has been submitted to the Office of the President for review. National Economic Development Director General Ernesto M. Pernia expressed optimism in the release of the FINL before the year ends. The proposed aggressive changes were designed so that the Philippines will be at par with the rest of the ASEAN countries. Once signed through an Executive Order, it will be the 11th FINL following the 10th version released during the Aquino Administration.  [1]

Perceived to be the most liberal by far, it has among its provisions the removal of restrictions on foreign-owned investments houses and financial activities in line with the liberalization of the banking sector, practice of professions, foreign infrastructure contractors and lowering the paid-up capital requirement for foreign retailers from $2.5 million to $ 200,000. Public Utilities (telecommunication & water) are expected to have an increased cap on foreign ownership to 70%. [2]  The Philippines has restrictions over ownership of its public utilities up to 40%. [3]  Increasing its cap will require amendment of the old Commonwealth Act No. 146 commonly called the Public Service Act. A bill geared towards its repeal is already filed in the Philippine congress.  [4]

Other areas identified in the Technical Working Group (TWG) report are:

Mass media, supplies to state-owned corporations and agencies as well as bath houses and massage clinics. The government is also looking at allowing foreign pharmacists and forestry to practice their professions in the country, as long as it is under a reciprocity system.

The government may also ease the restrictions on education by limiting the 40 percent foreign equity rule only to basic education. The TWG also recommended that high-level skills development be opened to foreign players.

On mass media, the government is considering the easing of the foreign equity limitations imposed on marketing and advertising through the Internet.

Contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or Municipal Corporation are also considered for removal from the list, but also on a reciprocity basis.

Lastly, the TWG has recommended to the Department of Health to classify sauna and steam bathhouses, massage clinics and other like activities under “wellness centers” to allow full foreign ownership. [5]

The 10th FINL mandated no foreign equity for the following: Mass media, except recording; practice of professions in the pharmacy, radiologic and x-ray technology, criminology, forestry and law sectors; retail trade enterprises with paid-up capital of less than $2.5 million; cooperatives; private security agencies; small-scale mining; utilization of marine resources in archipelagic waters, territorial sea and exclusive economic zone as well as small-scale utilization of natural resources in rivers, lakes, bays and lagoons; ownership, operation and management of cockpits; manufacture, repair, stockpiling and/or distribution of nuclear weapons; manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological weapons and anti-personnel mines; as well as manufacture of firecrackers and other pyrotechnic devices. [6]

The 11th FINL will not only open its local industries to non-Filipino investor. It will also take the path towards a complete liberalized Philippines. [7]

The FINL is a shortlist of investment areas of activities which may be opened to foreign investors and/or reserved to Filipino nationals. The basic law that governs it is governed by the Foreign Investment Act of 1991. [8]






[4] Ibid, Philstar



[7] Ibid, Pressreader


The Philippine Bureau of Internal Revenue (BIR) removed the Tax Treaty Application (TTRA) for nonresident corporations availing the preferential withholding tax rates on dividends, interests & royalties earned from within the Philippines. Commissioner Caesar Dulay signed on 28 March 2017 Revenue Memorandum Order (RMO) 8 – 2017, effectively repealing RMO 7-2010 and all previous memos pertaining to dividends, interests & royalties. It has taken effect on 26 June 2017, 90 days after its signing[1].

Prior to RMO 8-2017, nonresident foreign corporations are required to file their Tax Treaty Relief Application (TTRA) at the International Tax Affairs Division (ITAD) of the BIR before they can avail of preferential withholding tax rates on dividends, interests, royalties, among other business profits. The complete mandatory requirements are set out in RMO 72-2010[2]. This set of requirements have long been perceived onerous by various stakeholders taking months – even a few years to complete[3].  The Philippines is a signatory to over 40 international tax treaties. Without an approved TTRA income payments from dividends, interest and royalties are subject to regular income tax rate at 30% in contrast to as low as 15% upon approval of the TTRA[4].

RMO 8-2017 prescribes the outright enjoyment of preferential treaty rates for nonresident foreign corporation income on dividends, interest and royalties (DIR) subject to post reporting validation. This is after subscribing to and submission of the new BIR Form Certificate of Resident for Tax Treaty (CORTT) (see annex 1). CORTT replaced the old 1901 Forms for DIR.  It has two parts. Part 1 is for the nonresident entity to complete, to be signed by the competent Tax Authority of their country of residence. Nonresidents can also use the prescribed certificate of residency of their country but they will still have to submit the first part for monitoring purposes. Part II of the CORTT form is for the payor of the income to complete. It indicates the nature of income payments, amount and amount withheld[5].

While its enjoyment is outright, the benefit is subject to the compliance of both the income recipient and the income payor of the DIR. Incomplete, erroneous or misleading compliance of the CORTT of either party, and non-compliance of the 1604-F and 1604 CF by the payor of income, will invalidate the preferential rate, and the noncompliance will be subject to penalties as prescribed by the Philippine Tax Code[6].

The new RMO is in keeping with the Philippine government’s drive to improve Ease of Doing Business (EOBD). The Philippines is currently 99th among 190 countries per survey of World bank[7].

[6] ibid

President Rodrigo R. Duterte on Tuesday met some of the country’s tycoons over dinner in Malacañang in a bid to address “uncertainties” troubling them, his spokesman said yesterday.


The meeting comes in the wake of mounting reports of increased investor worries caused by political noise generated by his tough talk against the West and his administration’s apparent preoccupation with countering a nascent opposition.

In a press briefing, Presidential Spokesperson Ernesto C. Abella said Mr. Duterte’s three-hour meeting with big businessmen involved an “open discussion” on topics such as shift to a federal government, contractualization, job creation and tax reform.

“The president reiterated that he is for job creation to uplift the people’s well-being,” Mr. Abella said, adding that the meeting was called to “bring them on board the government’s agenda of inclusive growth.”

Quoting Presidential Adviser (PA) for Entrepreneurship Jose Ma. “Joey” A. Concepcion III, who facilitated the dinner meeting, Mr. Abella also claimed the tycoons “walked out extremely happy.”

“As far as PA Joey was saying, their preconceptions regarding the President were settled because of their one-on-one, face-to-face conversation. Many of them apparently had never met the President. This is the first time they had face-to-face and according to PA Joey, a number of their uncertainties were settled,” the spokesman said.

“Mainly, they were there to show their support for improvement of areas on poverty and crisis and the conflicts,” he also said.

Read more

THE PHILIPPINES remains a viable destination for foreign investors as fiscal and economic policies remain intact despite political risks, international credit raters said, noting that an unblemished growth story should sustain optimism.

Credit analysts from S&P Global Ratings and Moody’s Investors Service yesterday said the Philippine economy is poised to remain upbeat despite political risks stemming largely from the “unconventional” ways of President Rodrigo R. Duterte and heightened global uncertainty.

“It’s true that perceptions of political risks have increased in the Philippines mainly because the current President is a relatively unconventional political figure by Philippine standards. For quite a while he’s been making public remarks that have raised concerns of certain people, particularly in his public announcement that he’s going to distance the Philippines from the US, its traditional ally,” analyst Kim Eng Tan said in an S&P webcast.

“On the other hand, while he has been making all these pronouncements publicly, we have not seen significant changes in macroeconomic policies in the country and we haven’t seen domestic policies turning more negative for foreign investors.”

The Philippines may even turn out to be a more palatable investment destination amid easing tensions with China under Mr. Duterte’s presidency, coupled with sustained economic policies and reforms.

Read more at B World Online…

7.1 Philippine Economic Growth

The Philippine economy expanded 7.1 percent in the first three months in office of President Duterte on the back of robust public infrastructure spending and private construction, and growth in agriculture.

An upbeat consumer spending, encouraged by low inflation and low interest rates, also drove the expansion during the July-September period of the gross domestic product (GDP) that made the Philippines the fastest growing economy in the region. GDP is the total value of goods produced and services rendered in a given period.

“We are the fastest growing among major Asian emerging economies that have already released data for the quarter. We are higher than China’s 6.7 percent, Vietnam’s 6.4 percent, Indonesia’s 5.0 percent and Malaysia’s 4.3 percent. India has not yet released their data,” said National Economic and Development Authority Director Reynaldo Cancio.

The first three quarters saw 7% growth, compared to the 5.7% clocked in 2015’s comparable period. Mr. Cancio said the country needs to grow this quarter by at least 3.4% to reach the 6% lower end of the full-year target, and by 6.9% to reach the 7% higher end.

In the same briefing, NEDA Deputy Director General and Undersecretary for Policy and Planning Rosemarie G. Edillon said the government is “hoping” the business process outsourcing sector will remain another pillar of growth despite the America-first policy of US President-elect Donald J. Trump.

“I think we should congratulate the administration because it’s (GDP growth) devoid of election spending in the third quarter. I think it’s sustainable because it’s a big thing to surpass a GDP that has an election spending,” Sergio R. Ortiz-Luis, Jr., honorary chairman of the Philippine Chamber for Commerce and Industry, said in a telephone interview.

“We are hopeful that the trajectory of our country’s growth will remain high in the face of the challenges ahead of us. The government and the private sector have to take every opportunity that this growth brings to improve the lives of our countrymen, especially to eliminate poverty and create quality jobs and entrepreneurial opportunities. We have to empower more Filipinos, especially the marginalized groups, to participate in and benefit from the development process. This will result in genuine inclusive growth for our nation. “said Director Cancio.


Excerpts taken from:


Please join us for a 30 minute presentation followed by a discussion on the aspects of doing business and establishing a support office in the Philippines.

Doing Business in the Philippines Seminar 25 Nov 2016 2 w border


For further information please call Phil on 0418 802 711 or email





For a moment last week, Philippine President Rodrigo Duterte seemed to have orchestrated one of the most dramatic geopolitical shifts in Asia since the end of the Cold War — abandoning the US, his country’s longtime ally, for rival China. Characteristically, he did so with zero subtlety. In responding, the US should avoid making the same mistake.

He remains the Philippines’ legitimately elected leader, and at least some of his supporters hold anti-American views — stemming in part from America’s history as a colonial overlord. Whatever Duterte meant — he now says he was talking only about striking a more independent line in foreign policy — there’s every reason to believe ties with the U.S. will cool in the near term. Meanwhile, China has promised Duterte billions in soft loans and potential infrastructure investments.

“Renewed ties between Manila and Beijing will bring a huge impact on many small businesses in the country, presidential consultant for entrepreneurship Joey Concepcion and Philippine Chamber of Commerce and Industry” president George Barcelon said.

“Improved relations with China is expected to boost tourism in the Philippines,” said Concepcion and Barcelon, who were part of President Rodrigo Duterte’s delegation during his state visit in China.

Duterte is winding down a four-day state visit to China where $13 billion in trade deals are set to be signed as he repairs diplomatic ties that have been strained by disputes in the South China Sea.

“It’s very positive with all those deals coming in. I think the market will see a resurgence again. There will still be some volatility but it’s looking positive for the economy and the stocks,” BDO Capital President Eduardo Francisco told ANC’s “Market Edge with Cathy Yang.”

[WASHINGTON] “US Secretary of State John Kerry spoke to his Philippines counterpart over the weekend, emphasising strong and stable ties between the allies after comments by the Philippines president raised questions about bilateral relations,” the State Department said on Monday.

State Department spokesman John Kirby said “Mr Kerry expressed concern about the tone of remarks by Philippines President Rodrigo Duterte, who has sharply criticised President Barack Obama and talked about a separation from the United States.”

Mr Kirby said the phone call on Sunday led Mr Kerry to feel the United States and the Philippines “can work through this”.

He said Washington has seen no practical action by Manila to move away from ties with the United States.


For more in depth news visit:

The Chinese government said on Wednesday that Philippine President Rodrigo Duterte will visit China from October 18 to 21.

But even before the visit was confirmed, business leaders and executives in the Philippines were clamoring to take part in Duterte’s trip to one of the world’s biggest economies.

Who will be part of the delegation has not been announced, but on October 11 Reuters reportedthat business groups and government officials said registration for the trip had been “oversubscribed.”

The number of Philippine entrepreneurs to travel with Duterte swelled from about two dozen to about 250, according to Trade Undersecretary Nora Terrado, as they look to discuss potential deals in the rail, construction, tourism, agribusiness, power, and manufacturing sectors.

“I understand there are 100 more wanting to go,” Terrado told Reuters, adding that the size of the delegation was unusual because the two countries agreed on the visit only about a month ago.

The eagerness to do business with China comes amid an apparent thaw in previously frosty relations between Manila and Beijing, ties that had been strained over China’s assertive territorial claims in the South China Sea, which the Philippines and several other neighbouring countries have rebuffed.

Duterte has not capitalised on a July 12 international-court ruling that dismissed China’s expansive claims. The current Philippine president said in April, prior to his election, that he would be willing to “shut up” about disputes in the sea if China provided aid.

Since Duterte took office in June, he has kept his conciliatory stance toward China, particularly on economic and political matters — a position that appears to have been enabled by China’s more measured approach to issues in the South China Sea.

More recently, business dealings between the two countries appear to be heating up.

On Saturday, Philippine Finance Minister Carlos Dominguez said that Duterte would seek billions of dollars in infrastructure investments from China over the coming months (which Chinese firms are open to providing). The following day, Philippine Agriculture Secretary Emmanuel Pinol said China would lift a ban on fruit exports from 27 Philippine firms as a “gift” to Duterte.

“We are neighbours … this is actually what the president is thinking: instead of fighting, why don’t we just become friends?” said Francis Chua, chairman emeritus of the Philippine Chamber of Commerce and Industry, according to Reuters.

“The clouds are fading away. The sun is rising over the horizon, and will shine beautifully on the new chapter of bilateral relations,” Zhao Jianhua, the Chinese ambassador to the Philippines,said in September.

‘One cannot replace the other’

Despite the apparent enthusiasm among Filipino executives about the potential to work with the Chinese, there are reasons to worry about the footing of the Philippine economy.

Since taking office, Duterte has egged on a anti-narcotics campaign that has driven up homicides in the country. Since June, nearly 4,000 people have been killed — the majority of them by unknown assailants it what are likely vigilante killings. He has also accused public figures of criminal activity with scant evidence, stirring fears among the business community.

Duterte has also railed against the US, raising concerns about the health of Manila and Washington’s longstanding relationship.

“Many investors have been turned off by threatening remarks made by Duterte against the US and China, casting doubt on the future of Manila’s foreign policies and his handling of the economy,” CNBC reported at the end of September.

“A lot of people are hesitant to put their money into the Philippines at this point,” Guenter Taus, who heads the European Chamber of Commerce in the Philippines, told The Economist in September.

Duterte has remained broadly popular through the first three months of his term, but that behaviour has put him at odds with much of the rest of the world.

And a trip to Beijing is unlikely to sooth the frayed nerves the Philippine business community.

“There is still significant concern among businesses about the potential of Duterte’s policies, both domestic and international, to cause instability and upset the economic growth” of theBenigno Aquino administration, which ran from 2010 to 2016, said Gregory Poling, the director of the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies.

Given the size of the Chinese economy, expanded business dealings with Beijing only make sense for Philippine businesses, but deeper relationships with China’s businesses can’t take the place of Manila’s extensive economic ties to the US and other countries.

“They are going on the trip with him because there is no reason to pass up potential opportunities in China,” Poling told Business Insider, “but given that China lags well behind the US, Japan, and European nations on the list of investors in the Philippines, one cannot replace the other.”


As seen on Business Insider Australia by Christopher Woody

The World Bank has retained its three-year economic growth forecasts for the Philippines, but stressed these projections can be exceeded if the government can ramp up its infrastructure spending as planned and provide clarity on its economic policies.

The rate of the country’s economic growth may exceed forecasts in the next two years as long as the government could further ramp up public spending as planned by the Duterte administration, said the World Bank. “The Philippines remains one of fastest growing economies in East Asia and the Pacific despite the weak global economy.”

Upon assuming office, the Duterte government reassured investors and the private sector with continuity of existing macroeconomic policies including fiscal, monetary and trade policies that would support continued economic expansion and poverty reduction.

Domestic demand will power the Philippine economy to one of the fastest growth rates in Asia, even as external factors and President Rodrigo Duterte’s tough talk aided an outflow of foreign funds from the equities market, an economist said Tuesday.

“At the moment, the Philippines is the best performing country in Asia. It is still extremely dynamic,” he said, adding, “The outlook looks very favorable.” Rajic Biswas, Asia Pacific chief economist at IHS.

In its October update on the domestic economy titled “Outperforming the Region and Managing the Transition,” the World Bank said the country has weathered the challenging global economy and grown at a rapid pace over the past five years, “supported by strong macroeconomic fundamentals and a highly competitive workforce.”

In a briefing, World Bank lead economist Birgit Hansl said the completion of the 2017-2022 medium term development plan for the country is expected to provide investors with direction.

Hansl said that while the country’s macroeconomic fundamentals remain strong, the government should also pay attention to microeconomic reforms such as improving the ease of doing business in the Philippines to sustain growth.



PH Could Surpass Growth Forecast
Economy Seen Sustaining Growth on Domestic Demand
World Bank Keeps Philippine Growth Forecast


The government needs to spend P2.3 trillion annually for key public investments to transform the Philippines at par with Malaysia and South Korea by 2040, the Department of Finance (DOF) said.

Based on the presentation of the DOF, the government needs to raise its investments in infrastructure, education, health, social protection, training and other programs from the present P1.27 trillion level to P2.29 billion.

“This can be achieved through tax reform,” Finance Undersecretary Karl Kendrick T. Chua said in a meeting with former finance ministers. “Complementary economic reforms will also be crucial.”

“At the end of this administration, we want to set the country on a path towards eradicating poverty in one generation — by 2040. This is our vision for the Philippines,” Chua said.

By the end of the Duterte administration’s term, the government aims to become a high middle income nation, equivalent to Thailand and China, with a poverty rate of 17 percent. Ultimately, the Philippines should achieve the high income status by 2040.


To meet that goal, Chua said the government needs to raise additional P1 trillion a year to bridge the current funding gap for key public investments.

“All these investments require additional funds — around P1 trillion every year in 2016 prices (or around seven percent of gross domestic product) on top of the current P1.3-trillion,” the newly appointed finance undersecretary said.

The needed P1 trillion annual funding could be realized if Congress would pass into law the Duterte administration’s tax reform plan, implement reforms at its two main tax agencies, and impose efficient spending.

According to the DOF, the proposed four tax packages and the tax administration reforms at the Bureau of Internal Revenue and Bureau of Customs could easily yield revenues equivalent to three percent of GDP.

Based on the initial estimates by the DOF, the government could raise P600 billion by 2019 from its tax policy and administration reforms at the BIR and Customs.

“By 2019, the proposed tax reform package aims to raise P600 billion (in 2016 prices), or three percent of GDP, to fund the priority investments of the Duterte administration,” Chua said.

Of the total, the government expects P400 billion, or two percent of GDP, will come from the tax policy reform, while the remaining P200 billion, or one percent of GDP, could be generated through tax administration reforms.

“In the BIR, we will improve taxpayer satisfaction, reduce the cost of compliance in paying taxes, gain public trust, and protect the revenue base,” Chua said. “In the BOC, we will protect revenues from smuggling, while enhancing trade facilitation.”


As seen on: Manila Bulletin