Philippines lifts foreign ownership cap on airlines

The Philippines government has lifted foreign ownership restrictions on airlines and other key sectors to attract foreign investment and kickstart the country’s economy after COVID-19.

Signing off a law amending the country’s Public Service Act (PSA) on March 21, President Rodrigo Roa Duterte said in a statement: “I believe that through this law, the easing out of foreign equity restrictions will attract more global investors, modernise several sectors of public service, and improve the delivery of essential services”.

Apart from airlines, the changes aim to encourage investment in telecommunications, railways, and shipping – all sectors where foreign ownership was capped at 40%. Said sectors are now open to full foreign ownership.

Reuters reported the Philippines have lagged regionally in attracting foreign investors due to ownership caps and bureaucratic red tape in an economy where a handful of tycoons dominate multiple sectors.

Lawmakers backing the bill estimated it would boost foreign direct investment by around PHP299 billion pesos (USD5.7 billion) over the next five years.