The European Chamber of Commerce of the Philippines urged the government to allow foreign hotel players to own land, a policy change that it said will encourage more small and medium-scale foreign investors to come to the Philippines and to facilitate competition in the industry.
The recommendation is part of a list of policies that the ECCP wants reviewed and amended to create a more competitive business environment for tourism.
During yesterday’s 2nd EU-Philippines Business Dialogue, the business group launched a compilation of nine cross-sector and 13 sector advocacy papers. Four pages have been dedicated for the tourism industry.
In general, the Constitution provides restrictive economic provisions to foreigners. Foreign entities are entitled up to full ownership of businesses except for those restricted by the Constitution, laws, and the Foreign Investment Negative List.
Currently, the Investors’ Lease Act allows foreign companies that invest in tourism to lease land for only 50 years and renew it for another 25 years.
But the ECCP argued that this legislation “favors the concentration of large-scale hotel investments among a small group of domestic real estate developers” and thereby “hinders competition and has a negative impact on the development of the tourism industry.” It added that such policy also limits the entrance of small- and medium-scale investors.
The group suggested that the government allow foreign players to own land, even under specific conditions such as TIEZA registration. Such move will attract larger foreign direct investment to the Philippines. “Hotel property ownership control, including the land it is built on, is a fundamental investment decision criteria for foreign investors,” argued the ECCP. Investors will also be able to use the land as collateral to banks and apply for mortgages.
Meanwhile, an increase in European investments is hoped to generate more tourism jobs.