THE 60-40 constitutional restriction is the leading factor that stops foreign investors from fully committing their resources to the city, a local official revealed.
During the iSpeak forum last week, Davao City Investment and Promotions Center chief April Marie Dayap recalled that in 2019 an investor from Qingdao, China, who owns a beverage company, expressed interest in opening a factory in the city.
However, the investor’s enthusiasm dampened after hearing about the restriction.
“Dili man siguro nato matanggal ang restrictions pero somehow we will give more leeway to the foreign investors, I think daghan gyud ang mo-invest sa Davao city and also in the Philippines,” Dayap said.
“Of course, if i-allow [sila] to own majority sa investment, mas komportable sila,” she added.
The 60-40 equity rule supposedly regulates foreign investments and businesses in the country through the Foreign Investment Act (R.A. 7042, 1991, amended by R.A. 8179, 1996) stating that the Filipino citizen shall own 60% of the business while the remaining 40% can be owned by the foreign investor.
Dayap highlighted that the office created areas for networking and business matching to the extent of looking for a Filipino businessman counterpart, especially now that foreign interest in the city increased.
The investments and promotions chief said that previously, they mostly saw Chinese businesses coming from Jinjiang. But now, they noticed Chinese investors from Taian, Dalian, and Chongqing looking to expand their interests in the city.
She cited Zhangzhou, a city in Fujian Province, as an example. During a delegation visit, the mission made it clear to Mayor Sebastian Duterte that they would like to partner as a twin city, highlighting the establishment of industrial zones.
Dayap said Zhangzhou city will bring in 1,000 companies that could create at least 200,000 new jobs.
“The investment that they could bring to the city amounting to 30 billion, I assume with the 1,000 companies, it’s not in pesos, it might be RMB, that would mean P200 billion,” Dayap said.
During the 5th anniversary of the sister city agreement between Jinjiang and Davao on Sept. 28, Ateneo de Davao University and Quanzhou Vocational and Technical University signed a cooperative education agreement to improve the skills of the city’s labor force up to par with international standards.
“They’re really helping Davao City in terms of tourism, and investments. It is a great opportunity for the city of Davao because we hear them saying that they really trust our mayor, the leadership, policies and peace and order,” Dayap said.
