Abo and Penaranda Law firm

Coronavirus, The State’s Exercise of Police Power and Alternative Sources of Investments

The COVID-19 or the Coronavirus epidemic that started in Wuhan, China has become one of the more pressing issues the international community is facing right now.
coronavirus

The COVID-19 or the Coronavirus epidemic that started in Wuhan, China has become one of the more pressing issues the international community is facing right now. Efforts have been made and strategies devised in order to stop the virus from further spreading. However, despite untiring efforts, the viral infection has been slowly spreading worldwide.

Coronavirus epidemic that started in Wuhan

As of this date, the Philippines has three (3) confirmed COVID-19 cases and there are fears that the number of infected might increase due to the recent influx of tourists and investors from China, the origin of the coronavirus.

The possibility of the coronavirus causing an epidemic in the country has been a pressing concern for the government and proactive steps have been made by the Duterte Administration to address the issue. Particularly, President Duterte ordered an entry ban to the Philippines for persons coming from areas affected by the virus.

Another step the Philippine Government has taken is to invoke its police power to refuse entry to persons who exhibit flu-like symptoms but refuse to undergo a quarantine period.

But what is police power? According to the Supreme Court Police, power is the power of the state to safeguard health, morals, peace, education, order, safety, and general welfare of the people.

Thus, when the government refuses entry to persons who are suspected of having contracted a contagious disease and declines to undergo a quarantine period, it is a valid exercise of police power by the State, as the same is implemented in order to protect public health and safety.

Alternative Sources of Investments

The government efforts and the exercise of its police power are certainly doing their job as only three confirmed cases of COVID-19 have been recorded in the country, in contrast, China has already recorded thousands of infections.

However, the potential impact of the epidemic on the Philippines’ economy is still quite serious if the situation further escalates. It is no secret that there is an increasing number of Chinese tourists and investors coming to the Philippines and the continued entry ban would certainly put a damper on further increases in investments.

The Philippine economy is not dependent on Chinese investments and tourists alone. In the meantime, while the epidemic is ongoing in China, the Philippines could attract outside investors and tourists from other countries.

The Philippines is in a position to attract foreign investors outside of China with a more liberal Foreign Negative List, the impending amendment of the Foreign Investments Act and the Corporate Income Tax and Incentives Reform Act with incentives given to the qualified foreign investors by the Board of Investments and the Philippine Economic Zone Authority.

No need to panic yet on the Coronavirus doing damage to the Philippine economy

In sum, there is no need to panic yet on the Coronavirus doing damage to the Philippine economy due to the government’s no-nonsense approach in handling the situation to the point of invoking the State’s police power. The Philippine business laws and climate that is attractive to foreign investors outside of China.

Written by: Atty. Jon Dominic Penaranda
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