By Lenie Lectura, BusinessMirror | 02/20/2013 8:36 AM
MANILA, Philippines - British Ambassador to the Philippines Stephen Lillie called on the Philippine government on Tuesday to “adjust” a law limiting foreign ownership of businesses to allow more investments into the country, particularly in the renewable-energy sector.
The country currently limits to 40 percent the foreign ownership in public utilities, while Filipino investors take in the remaining 60 percent.
According to the ambassador, such limitation, which he described as “unhelpful,” complicates investments.
“I think the government is well aware that the 60/40 limit is unhelpful in a whole range of sectors,” Lillie said at the sidelines of the UK Renewable Energy Systems and Solutions business seminar and networking event.
He added that various business groups had raised with the Philippine government the need to create a better business environment in the country.
“The British Chamber of Commerce and the [other] foreign chambers collectively raised, as always, one of the issues, ‘Can the 60/40 limit be adjusted?’ I think the Philippine government is well aware of that view,” Lillie said.
In the United Kingdom a foreign company is not required to partner with a local firm to do business there.
Lillie nonetheless cited that the Philippines has a huge demand for all kinds of energy sources, and that this is what attracts British companies to investing in the power sector, particularly renewable energy.
For instance, he said, Aseagas Corp.—a joint venture between British company GazAsia Ltd. and Abotiiz Equity Ventures—will be building a power plant in Metro Manila as the first pilot site.
“There’s a lot of opportunities in the renewable-energy sector here. You have a lot of wind potential, you have a biomass potential and British companies have a lot of expertise in the technology. And, unfortunately, there are limitations in the Philippine law that complicate investments here such as the 40-percent equity cap,” Lillie added.
He noted the slow pace of implementation of the feed-in tariff (FIT) allocation to renewable-energy developers.
“There is slow progress in the FIT. So fundamentally, the Philippine government needs to take some steps to improve the regulating framework. I think, if we can do that, there’s a lot of interest in British companies.”