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According to the Philippines local newspaper and agency PhilStar (The Philippine Star), the government is revisiting its list of businesses prohibited to foreign investors but notes that the revisions will not include lifting constitutional restrictions on foreign equity and foreign professionals.

The country’s top economic managers headed by Finance Secretary Cesar Purisima, National Economic and Development Authority head Arsenio Balicasan and Department of Trade & Industry head Gregory Domingo have all agreed to review the Foreign Investment Negative List (FINL) to determine which areas may still be opened to foreigners.

Purisima, however, pointed out that only items on the list established by executive order or legislation would be reviewed.

“We will not be reviewing lifting economic restrictions in the constitution. That is currently off the table. Limiting the items on the FINL will allow the Philippines to be more connected to the global economy, which will result in more business and employment for Filipinos,” Purisima said.

Purisima said they would seek inputs from key stakeholders – National Government agencies, Congress, business groups, and other industry leaders.

The review is part of efforts to attract more direct foreign investors as the country moves toward accelerated, sustained and inclusive economic growth.

“The review of the FINL is an ongoing process. Once we finish consultations with stakeholders, we will present results to the President,” Purisima said.

The FINL, which identifies the business activities that are reserved for Filipino nationals, was introduced as major reform in 1991. Although reissued every two years, the list barely made an impact in so far as boosting foreign investments into the Philippines is concerned. The next FINL is due in 2014.

Net FDI inflows remain very low in the Philippines compared to its neighboring large Asean economies which allow full foreign ownership.

According to the World Bank in its Investing Across Borders 2010 report, which measures how 87 economies facilitate market access and operations of foreign companies, the Philippines and Thailand have some of the strictest foreign equity rules and fall below the East Asia and Pacific Average as well as the high income OECD economies.

Domingo said the review is a crucial step to strengthen the country’s trade negotiations strategy.

For his part, Balicasan underscored the need to maintain and enhance the competitiveness of key professions and industries to ensure that the country reaps the full benefits of economic integration in the ASEAN come 2015.

The Joint Foreign Chambers in the Philippines has long been pushing for the removal of some restrictions, particularly on the practice of all professions.

With the expected Asean integration, the Philippines, according to JFC, may be forced to lower barriers to cross-border investments in priority sectors and may have difficulty when it negotiates for advanced free trade agreements with the European Union and other countries.

JFC said the government must take advantage of the growing investor confidence in the country and make a serious effort to make the negative list less negative.

The organization is composed of the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Korean Chamber of Commerce of the Philippines, and Philippine Association of Multinational Regional Headquarters.