DOJ defends EO allowing more foreign ownership in some sectors

The Department of Justice on Wednesday defended the legality of President Rodrigo Duterte’s Executive Order No. 65 allowing more foreign investments and allows foreigners to practice some professions in the country.

Justice Secretary Menardo Guevarra said that EO 65, which allows full foreign ownership in some business sectors and increases foreign equity in radio network and public works, does not violate the 40-percent limit for foreign ownership and the prohibition on foreign equity in mass media under the 1987 Constitution.

“We don’t see anything objectionable on EO 65. It does not violate the limits on foreign investments set in the Constitution,” Guevarra said in an interview.

The Executive Order issued by the Palace last Oct. 29 provided for the 11th foreign investment negative list, which enumerates the areas or activities open to foreign investors and aims to improve the country’s attractiveness to foreign direct investments.

The Justice secretary insisted the EO is still consistent with the 60-40 rule on local and foreign investments under the Constitution.

“Public utilities, educational institutions, development of natural resources and ownership of private lands remain subject to the 60-40 rule,” he said.

EO 65 allows 100-percent ownership or investment participation of foreigners in Internet businesses, lending and financing, wellness industry, higher education teaching (non-professional courses) and training centers and high-level skills development (not part of the formal education system).

The DOJ chief explained that the increases in foreign equity in private radio communications network from 20 percent to 40 percent and on construction and repair of locally-funded public works from 25 percent to 40 percent also do not violate the law.

“Foreign equity in mass media, except recording and Internet business, is still banned. The 60-40 rule also still applies to private radio communications network,” he pointed out.

The DOJ chief believes that EO 65 does not raise any justiciable controversy that could warrant any constitutional questions before the courts.

The executive order updated the 10th regular foreign investment negative list signed by former president Benigno Aquino III in 2015.

Under the latest foreign investment negative list, up to 40 percent, foreign equity is allowed for contracts for the construction and repair of locally funded public works.

However, the relaxation does not cover the amended Build-Operate-Transfer Law and projects that are foreign-funded or assisted and required to undergo international competitive bidding.

The relaxing of foreign equity limits came as the government seeks to attract more investments on infrastructure to maintain the country’s growth momentum.

The allowed foreign equity on private radio communications network has been increased to 40 percent from the previous 20 percent.

The 11th regular foreign investment negative list also enumerated professions that foreigners are allowed to practice in the country. Foreigners who specialize in the following fields can practice their profession if their home countries also allow Filipinos to do the same: accountancy, aeronautical engineering, agricultural and biosystems engineering, architecture, chemical engineering, chemistry, civil engineering, customs brokerage, dentistry, electoral engineering, electronics engineering, electronics technician and environmental planning.

Also covered are fisheries, forestry, geodetic engineering, geology, guidance and counseling, interior design, landscape architecture, librarianship, master plumbing, mechanical engineering, midwifery, mining engineering and naval architecture.

The rest of the fields are nursing, nutrition and dietetics, optometry, pharmacy, physical and occupational therapy, psychology, real estate service, respiratory therapy, sanitary engineering, social work, teaching at elementary and secondary levels, veterinary medicine and other professions as may be provided by law or by treaty where the Philippines is a party.

Meanwhile, the corporate practice of the following professions is now allowed, subject to the requirements and conditions under the pertinent professional regulatory law: aeronautical engineering, agricultural and biosystems engineering, architecture, chemistry, electronics engineering, environmental planning, forestry, guidance and counseling, interior design, landscape architecture, naval architecture, psychology, real estate service, sanitary engineering and social work.

Topics: Department of Justice , Rodrigo Duterte , Menardo Guevarra , 1987 Constitution
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