THE flow of more foreign investments into the Philippines will help the economy to shape up and force local businesses to offer more reliable products to make them at par with the competition.

Dr. Thomas Aquino, Chairperson of the Research, Education, and Institutional Development (REID) Foundation Inc., said that opening up the economy to foreign investors through constitutional reforms would promote efficiency and competitiveness in local enterprises and industries.

“Can you imagine what if these enterprises had greater access to inputs, a variety of them, buyers and components, to improve the product offerings that they offer abroad, and a system of rules of doing business in the country that has improved, that should improve because of an opened up economy that is not burdensome to these firms,” Aquino said.

Aquino said the competition between local and foreign businesses would create opportunities for other small and medium enterprises (SMEs) to use the available resources to produce and export to other Asian countries.

He spoke on the impact of foreign investments on SMEs during the third economic forum in constitutional reforms sponsored by the Department of the Interior and Local Government (DILG).

He explained that SMEs would feel the pressure to improve their domestic business operations because of possible foreign competition. It will also drive local firms to seek to expand their scale of operations, he said.

The webinar sessions support the Resolution of Both Houses No. 2 (RBH 2), authored by Speaker Lord Allan Velasco, which was approved on the third and final reading. The resolution is now pending in the Senate for approval.

The measure seeks to include the phrase “unless otherwise provided by law” to empower Congress to pass laws lifting current restrictions on foreign investors of public utilities, educational institutions, media, and advertising companies.

According to Sandra Marie Recolizado, a director of the Board of Investments (BOI), foreign investors can help to promote domestic products more widely in international markets.

“They have the linkage or connection to the market and local products of the companies that will level up the quality of their products and services to meet the requirements of the foreign investors,” Recolizado said.

For his part, lawyer Vicente Homer Revil, Chairperson of the Constitutional Reform (CORE) Movement, said allowing more foreign investments would lead the country towards a strong and sustainable recovery and make the economy stronger and resilient.

“Removing the restrictions for foreign investors will give opportunities to small businesses a good competition and to boost innovation,” Revil said.

“It will help drive economic growth and increase the standards of living of the people,” he added.