IBON opposes 100% foreign ownership in transpo, telco sectors

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Metro Manila (CNN Philippines, March 30) — A local economic think tank said the government should beef up its own sectors instead of relying on foreign investments to improve telco and transportation industries.

IBON Foundation Executive Director Sonny Africa acknowledged that while these sectors can get a boost from foreign investors, the Philippines is "tying [its] hands to foreign capital."

"We do need to improve our transport infrastructure but our view is we're going one step forward, two steps backward by giving it so much to foreign capital," he told CNN Philippines' Traffic Center.

Earlier this month, President Rodrigo Duterte signed into law a measure amending the Foreign Investments Act, further opening up the economy to foreign investors, allowing them to hold as much as 100% equity in domestic enterprises.

READ: Duterte signs law amending Foreign Investments Act

The government's move is "very shortsighted," according to the IBON official.

Africa said the government must focus on developing and strengthening "genuine Filipino capacity" as part of its long-term plan.

"The point is, we should not take as a metric of success the fact that they're in the country and they can brag about so many hundred million of investments," he said.

"But the real metric of success in five years, ten years, are we building Filipino capacity in these sectors?" Africa added.

Citing economic sanctions against Russia following its invasion of Ukraine, he warned the Philippines might be disadvantaged if foreign powers "embargo" something on the country.

"We can invite them into these sectors but equity limit is quite important, actually it's the most economical way to get leverage to get some long term benefits for the country," he said.

"We don't agree that giving 100% to foreign capital is the way to go. If we turn key sectors over to big business, without the government having the capacity to regulate that, we will be abused," Africa claimed.

Senate President Tito Sotto and Senator Grace Poe earlier assured the public that the law has safeguards against abuses.