Foreign ownership to boost FDIs in PH – Fitch Solutions
Foreign Direct Investments (FDIs) to the Philippines could potentially increase following the Senate’s approval of the bill that allows foreigners to fully own and control firms in key sectors, according to credit rating agency Fitch Solutions.
In a commentary, Fitch Solutions said that this bill will “improve investors’ appetite” in the country.
The agency added that the Philippines has a “highly conducive environment for technological uptake” and foreign ownership in the tech sector will boost growth in the industry — “particularly terrestrial fiber networks where coverage is particularly limited.”
Fitch noted that the only downside of this bill is the “Philippines’ proximity to escalating tensions between China and Taiwan.”
According to data from the Bangko Sentral ng Pilipinas (BSP), FDIs in the country has slipped for the third consecutive year in 2020 by nearly 25%.
However, Fitch concluded that allowing foreign ownership could open the economy to international players that are “looking to monetize the Philippines’ long-term growth opportunity…”
According to the current law, foreign ownership in public utilities in the country is only allowed up to 40%.
