So much controversy is being unnecessarily generated with this Charter change issue but in reality, changes to the overly protectionist economic provisions in the 1987 Constitution should be debated upon because it hinders the country from realizing its full economic potential. So many limitations on foreign ownership to just 40 percent in various sectors such as advertising and mass media, and even educational institutions, is already irrelevant today.
We’re glad that after initially indicating that economic Charter change was not a priority, President Marcos is now seeing the need to make adjustments, saying that the “1987 Constitution was not written for a globalized world. And that is where we are now. We have to adjust so that we can increase the economic activities in the Philippines and attract more foreign investors.”
In a report published by pwc.com., the Philippines in 2020 ranked “third most restrictive out of the 84 countries in the Organization for Economic Cooperation and Development (OECD)’s foreign direct investment regulatory restrictiveness index (FDI Index)” based on four types of restrictions – foreign equity limitations; discriminatory screening or approval mechanisms; restrictions on the employment of foreigners as key personnel and other operational restrictions.
“The restrictions are evaluated on a 0 to 1 scale (1 being the most restrictive). It is no surprise that the Philippines scored 0.374, as we have several laws restricting FDI and most of them are enshrined directly in the Constitution,” the report said.
All the investment pledges and other economic gains from the foreign trips that the President has made would come to a full stop if the problematic provisions and restrictions that businessmen and potential investors have been complaining about are not addressed. This is also a major reason why we have been losing out in terms of foreign direct investments to our neighbors in ASEAN like Vietnam, and other countries that have a similar political system as ours, because our economic policies have been too restrictive and inflexible – not to mention outdated and unresponsive to the changing needs of a highly globalized world.
There are a lot of investment opportunities that are available to us, especially from the United States because of the strong economic and security relationship we have today. This is underscored by the highly anticipated Presidential Trade and Investment Mission arriving in March headed by US Commerce Secretary Gina Raimondo, with a top-level delegation composed of CEOs representing over 100 companies. The trade mission is expected to open up more investment opportunities in clean energy, critical minerals, agriculture, infrastructure, innovation economy and other sectors.
Other countries are also looking at investment opportunities in the Philippines, such as Germany that is interested in the renewable energy sector. But like others, a major concern is economic liberalization and “unclear rules” regarding foreign participation. Several foreign chambers in the Philippines have in fact voiced their concerns, saying that the 40 percent minority ownership provision is making foreign businessmen hesitant to invest, resulting in low foreign participation in some key sectors.
As pointed out by the country’s “economic czar,” the recently appointed Special Assistant to the President for Investment and Economic Affairs Frederick Go, legislators should review these laws that have become outdated, irrelevant and, more importantly, are in conflict with newer policies, because they confuse potential investors and hinder efforts to improve the ease of doing business in the Philippines.
Every time a new law is passed, five old ones need to be repealed or amended because this could result in overlapping that create confusion and worse, result in six laws that businessmen have to deal with, Go explained during a forum organized by the Anti-Red Tape Authority, adding that these old laws have generated serious concern from foreign direct investors.
Foreign businessmen and potential investors certainly welcome the Resolution of Both Houses (RBH) No. 6 filed by Senate President Migz Zubiri that seeks to start the discussion on amending specific economic provisions to the 1987 Constitution. RBH No. 6 would require concurrence from the House of Representatives, which has indicated its support for the proposal through a letter from Speaker Martin Romualdez.
There have been efforts in the past to change the Charter and repeal or amend the economic provisions in the 1987 Constitution, but these have been met with resistance and even distrust because the timing is suspicious, the initiative is surrounded by controversy and there are disagreements regarding the process – Cha-cha or people’s initiative? Actually, the Constitution itself is silent on the mode of amendment.
I firmly believe that the issue about constitutional amendments on the economic provisions should not be dismissed but properly dissected and debated upon through a rigorous process of discussing the pros and cons. That way, controversies as well as suspicions attached to Charter change would be assuaged, plus the hysteria that some people go into when they hear the phrase “constitutional amendments” would simmer down.
As for the continuing controversy surrounding the push for Charter change through the people’s initiative – this should be investigated to get to the bottom of the issue and must be resolved one way or another.
The bottom line is – we have to do things the right way. If we want to change certain provisions in the Constitution, it should be done properly and in a transparent manner. People should be given a chance to look into the whole issue and have the opportunity to thoroughly study the potential ramifications of any amendment to the Charter. But definitely – changes should not be rammed down the throats of the Filipino people.
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