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Financial Regulatory Updates in Philippines: Key Changes Implemented Before Outgoing Administration Ends Term
As the outgoing administration of President Rodrigo R. Duterte nears its end, several high-profile legislative measures have been passed within the last quarter, aimed at boosting the country’s economic recovery.
Key Amendments to Financial Regulations
Foreign Investment Act (FIA)
- The FIA has been amended to relax the 200,000 USD paid-in capital rule for specific circumstances.
- Micro or small-sized domestic enterprises with a paid-in capital of 100,000 USD can now operate under certain conditions, such as being involved in advanced technology or endorsed as start-ups.
Investment Promotion Coordination Committee
- The FIA has established an inter-agency investment promotion coordination committee to consolidate the investment promotion efforts of various agencies.
- This move is expected to promote foreign investments and create more job opportunities.
Other Significant Developments
Public Service Act Amendment
- The amendment has renamed specific public services as “Public Utilities”.
- Industries such as electricity distribution, transmission, and petroleum pipeline transmissions are now subject to a Philippine citizenship threshold, allowing 100 percent foreign ownership.
Minimum Wage Increases
- The minimum wage in the National Capital Region has increased by 33 PHP to 533/day PHP for agricultural and non-agricultural sectors.
- The minimum wage in Region VI (Western Visayas) has increased by 55 PHP to 450/day PHP for those employing more than 10 workers.
PhilHealth Social Security Contribution Rate Increase
- The PhilHealth Social Security Contribution Rate has been increased by 1.0 percent to 4.0 percent.
- The rate increase will be effective as of June 1, 2022, but will be applied retrospectively from January 1, 2022.
Expected Impact
These changes are expected to have a significant impact on the country’s economy and create more opportunities for foreign investments and job creation.