Overcoming legal barriers to FDI in infrastructure

PERHAPS THE SINGLE biggest challenge to developing infrastructure in the Philippines is the decision made long ago to carve foreign direct investment (FDI) restrictions into the provisions of the Constitution itself, rather than retaining flexibility through legislation.

These restrictions include ownership and control limits on foreign investments in public utilities, communications, mass media, advertising, educational institutions, property and the exploitation, development and utilization (EDU) of natural resources.

As the country seeks to sustain the past few years’ growth, it increasingly has to look abroad for additional capital and technology to continue fuelling expansion. External factors aside, the Philippine outlook remains positive overall but the country faces steep competition for FDI from other developing economies like Vietnam, Laos, Cambodia and even Myanmar.