One more time for Cha-cha

A Chinese official once told me that Filipinos should not be afraid of allowing foreigners to make money – big money – while doing business in the Philippines.

These days there are Filipinos who may not be in the mood to listen to anything the Chinese have to say. But that piece of advice remains relevant for us.

China, after all, is the world’s second largest economy. And it achieved the feat within just three decades, after Deng Xiaoping unleashed the innate Chinese entrepreneurial spirit and told his compatriots that to get rich is glorious.

China got rich not on the backs of remittances of people who leave their country to seek better opportunities overseas, but by opening its doors to trade with the world and learning to play by international rules.

Apart from selling to the world, the Chinese created an environment that lured foreign companies big and small to bring their businesses to China. Even iconic American brands were enticed. Today almost every major global company has a strong presence in China. You know the joke: God created the world; everything else is made in China.

Beijing’s objective, the Chinese official told me, was to create jobs ASAP for the masses in the world’s most populous nation. Employment translated into spending power, and China became a massive market that foreign companies could not ignore. That consumer base of over a billion people also provided a ready market for Chinese products.

A European diplomat told me recently that the Philippines, now with the world’s 12th largest population (really, at 96 million officially), also provides a large market for both local and imported goods.

The European Union is hoping to forge a free trade agreement soon with the Philippines. Filipino businessmen, however, have not shown much enthusiasm for free trade agreements. Many prefer the easy path, which is to use political power to operate monopolies, or near-monopolies. Naturally, the returns are bigger for them, and never mind if the setup discourages competitiveness and turns away job-generating foreign investments.

These monopolistic business interests often have strong links with politicians. Some of them will be among the strongest lobby groups in the latest effort to amend the Constitution.

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The Charter, passed in 1986 and ratified the next year, expressly states: “The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.” I guess there are enough loopholes in the wording of that provision to allow the current status quo to prevail.

Our Constitution guarantees policies that have been described either as nationalistic or heavily protectionist.

The provisions, I’ve been told, were designed mainly to give Philippine enterprises time to develop global competitiveness. Instead the provisions have lulled most of our entrepreneurs into complacency in a highly competitive global market, and made us a regional laggard in attracting job-generating foreign direct investments.

The Constitution limits to a 40 percent minority or completely bans foreign ownership of land, natural resources, and enterprises involved in public utilities and education. Commercial mass media is completely closed to foreigners; monopolies and unfair competition are banned. In advertising, foreigners can own no more than 30 percent.

A Constitution must be dynamic and responsive to changing times. But every attempt to amend the Constitution since the Ramos administration has ended in failure.

Some foreigners have learned to go around the constitutional prohibitions, by using dummies although this is illegal, and sometimes with the complicity of the state. By classifying townhouses that sit on land as condominium units, for example, a foreigner can own a dwelling on a lot without needing to marry a Filipino citizen.

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With the opening of the regular session of the 15th Congress, the Charter change effort is being revived in earnest.

Congressional leaders have stressed that they simply want to amend protectionist economic provisions, to make the country more competitive and attract more job-generating investments.

Their favored Cha-cha mode is unclear. A people’s initiative is out of the question. An old scheme has been revived: to treat a piecemeal amendment like legislation, with the two chambers deliberating and voting separately, and the result submitted to the people for ratification in the elections next year.

Cha-cha proponents think amendments can be done quickly and at lower cost by convening Congress into a constituent assembly instead of holding a constitutional convention. In the past, “con-ass” was blocked by senators who feared that congressmen wanted to shift to a unicameral system that would abolish the Senate. It didn’t help that some congressmen threatened to go it alone, without the Senate, if the chamber refused to cooperate.

This time, Senate President Juan Ponce Enrile himself is trying to rally his chamber behind Cha-cha.

So far, President Aquino is unmoved. I’ve written before that when it comes to Cha-cha, P-Noy doesn’t trust lawmakers, who are always looking out for their own interests, to stick to any promise not to expand economic amendments to political matters.

P-Noy, I was told, also worries that Cha-cha will distract Congress from his legislative agenda. Legislation was already disrupted by the impeachment of Renato Corona and his trial in the previous regular session, but that disruption in congressional work was something P-Noy surely didn’t mind.

It does look like it’s now or never for Cha-cha, because P-Noy, like his late mother, genuinely looks like he can’t wait for his presidency to be over and he can go back to what passes for normal for the children of Ninoy and Cory Aquino.

P-Noy has the credibility to sell Cha-cha to a leery, cynical public. Charter change won’t perpetuate this President in power.

Proponents are heartened that P-Noy at least didn’t comment on the latest Cha-cha efforts in his State of the Nation Address. Maybe they are reading too much into the omission. Rather than keeping an open mind on Cha-cha, perhaps P-Noy simply didn’t want to tick off the two congressional leaders sitting behind him and listening to his SONA.

If he won’t be swayed on Cha-cha, P-Noy will have to show the nation that his alternatives are better.

He will have to prove, within a reasonable period, that national competitiveness and foreign investments can be boosted without tinkering with the Charter, through legislation, executive orders, better regulation, the rule of law and good governance.

It’s a tall order, but as far as P-Noy is concerned, so is Cha-cha.