The Philippines plans to propose legislative measures to ease curbs on foreign direct investments and help the government reduce unemployment, Economic Planning Secretary Arsenio Balisacan said.
Discussions with lawmakers are taking place on ways to ease foreign ownership limits in areas such as utilities, trade and education, and loosen rules on practice of profession, Balisacan said in an interview in his office in Manila yesterday.
“Many of these restrictions are out of place, out of context,” Balisacan said. “The intention is to improve the investment climate. We want to make the economy more efficient and create more jobs.”
President Benigno Aquino is seeking more overseas investments that will lessen the nation’s dependence on remittances and lower Asia’s second-highest unemployment rate. The government plans to double its job creation target to at least 2 million a year, Balisacan said.
Investment pledges climbed to a record $15.9 billion last year, Trade Secretary Gregory Domingo said last month, as Japanese companies including Murata Manufacturing Co. boosted expansion plans. The nation’s jobless rate of 6.8 percent was the highest in the region after New Zealand’s 6.9 percent, data compiled by Bloomberg show.
The government is also studying looser restrictions on aviation and may allow foreign airlines greater access to boost tourism, Balisacan said. The review on ownership curbs won’t include areas restricted by the Constitution, Finance Secretary Cesar Purisima said in a Feb. 19 e-mail.
The Philippine economy grew 6.8 percent last quarter, beating expansions in Malaysia and Indonesia and helping propel the peso to near a five-year high in February. The Philippine Stock Exchange (PCOMP) Index surged to a record last week, and net portfolio inflows were almost six times more in January compared with the previous month.
Gains in the peso and rising portfolio inflows are concerns, Balisacan said. The government is working to boost demand for dollars by accelerating its infrastructure program to help slow the currency’s appreciation, he said.
“The trick is to grow the demand side as fast the supply side,” he said. “If we get our infrastructure moving, we should be able to generate demand for dollars, increase productivity and make companies more competitive.”
The government may review the current exchange rate assumption of a range of 42 pesos to 45 pesos per dollar, he said. The peso, the best performer in Asia and among emerging markets in the past 12 months, fell 0.2 percent yesterday.
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