MANILA (Reuters). Rodrigo Duterte, President of the Philippines has approved an amendment for a law that allows foreign ownership to firms involved in telecoms services such as shipping. This amends archaic legislation which has been long blamed for reducing competition.

This Southeast Asian country has struggled to attract foreign investment in the region due to its restrictions on firms’ ownership in key industries and its reputation as a slow investor.

Consumer groups complain that the Philippines lacks foreign competition, which is why there are so few tycoons in many sectors.

New law amended 1935 legislation. This new law removes telecommunications companies, ships, rails and irrigation businesses from areas where foreign ownership is limited to 40 percent.

However, this cap will not be lifted in areas such as power transmission, distribution, water pipes and sewerage. Seaports can also benefit from the pipelines. Public utility vehicles are exempted.

It was seen as a positive step toward attracting new companies.

The Management Association of the Philippines (a business organization) stated in a statement that foreign investors’ entry will encourage strong competition. This will help consumers create new jobs and expand the economy. It also will boost recovery from the disruptions caused COVID-19.

Legislators backing the bill estimate that foreign direct investment would increase by about 299 billion pesos ($5.7billion) over five years.

One of the main authors, Senator Grace Poe said that “the law by relaxing foreign equity restraints in key industries will spur critical investments to speed-track inclusive recovery, development.”

($1 = 52.39 Philippine pesos)