With both the incoming Congress and president willing to amend the Constitution, the country’s bid to become a Trans-Pacific Partnership (TPP) member would transcend from the obvious mere lip service in the current administration to a genuine attempt in the next regime, experts say.
The highly ambitious trade agreement, spearheaded by the US and
currently negotiated by 12 economies, require Charter change (Cha-cha),
particularly to remove the economic restrictions in the 1987 Constitutions—something that President Aquino repeatedly thumbed down, while announcing to the world that he wants the Philippines to be a part of the TPP.
Dr. Ernesto Pernia, an economic adviser of President-elect Rodrigo R. Duterte and likely to become the next National Economic and Development Authority director general (See related story on B6), said Duterte is both keen on joining the TPP and revising the Charter.
“He’s interested in the TPP; but the challenge now is that one of the hindrances is the restrictive provisions in the Constitution. If those can be eased, then that will no longer be an impediment,” Pernia said.
And, contrary to Mr. Aquino’s lukewarm response to Cha-cha, Pernia said easing foreign-equity restrictions has been included in Duterte’s eight-point economic agenda. This was regarded by observers as a way to earn the support of the business community, which the president-elect had antagonized during the campaign period.
Cha-cha within the year
Pernia said that, with the tough-talking mayor now at the helm,
easing foreign restrictions will likely be swiftly acted upon.
“Based on his statements on the matter, easing economic restrictions will be done quickly; maybe within the year,” Pernia said.
The economist, however, said further discussions with the president-elect are needed to determine the means in relaxing the said provisions. It can be recalled that in mid-2015, the House of Representatives failed to vote on a resolution that would pave the way for easing economic restrictions in the Constitution.
House Speaker Feliciano Belmonte’s Resolution of Both Houses (RBH1) aimed to insert the phrase, “unless otherwise provided by law,” to the restrictive sections of the Charter to allow future legislation to remove the said barriers.
Importance of TPP
Though the TPP allows for prolonged schedules of liberalization, giving its members time to adjust to its rules, these economic
restrictions will eventually have to be eased in the long run, as the TPP has ambitious liberalization requirements. The TPP’s 12 members currently represent more than half of the global output and over 40 percent of world trade.
Half of the Philippines’s exports go to TPP members, as the US and Japan are among the 12 members.
“The TPP will provide comprehensive market access, elimination of all tariff and nontariff barriers and increase cross-border trade,” Dr. Cielito F. Habito said in a recent forum. The growth of the investment inflows from the 12 TPP members has been moderate thus far: of the $6.2-billion record foreign direct investment inflow in 2014, the TPP members accounted for only $ 1.4 billion.
House ready to Cha-cha
With Belmonte returning to the lower chamber, Cha-cha already has a sure proponent in the 17th Congress. And even if he loses the Speakership to a Duterte ally, particularly Pantaleon D. Alvarez of Davao del Norte, amending the Constitution would not be a subject of debate of the House minority and majority.
Belmonte already announced that he would refile his economic Cha-cha bill, and Rep. Romero Quimbo of Marikina, chairman of the House Committee on Ways and Means, is ready to support it.
“I look forward to matters like tax reform and opening of the economy to foreign investment. Inclusive growth will only happen if taxes are reformed and if the domination of a few Filipino companies is finally broken through ownership reforms,” Quimbo said.
Under Article XII of the Constitution, foreign investors are prohibited to own more than 40 percent of real properties and businesses, while they are totally restricted to exploit natural resources and own any company in the media industry. Belmonte also said Duterte’s eight-point economic agenda, which is a con-tinuation of the policies of the Aquino administration, will make the Philippine economy more stronger.
“I am glad that the economic agenda [of Duterte] is pursuing the Aquino administration agenda,” Belmonte told the BusinessMirror. “I am also confident it [Aquino’s economic agenda] will go well under Finance Secretary Carlos Dominguez.”
In a CNN Philippines report, Dominguez, who is being eyed as the finance secretary in the next administration, said the “economic agenda is wide-ranging from tax reforms to accelerating infrastructure building to support services for farmers and attracting foreign investments by reducing crime.”
“While the eight-point economic agenda is similar to P-Noy’s agenda, I suspect that in the coming months, President-elect Duterte will come out with expansions and improvements of the Aquino agenda,” Rep. Anthony G. del Rosario of Davao del Norte, chairman of the House Committee on Economic Affairs, said in a text message.
Senators to Cha-cha for federalism
Senators are inclined to fast-track passage of legislation paving the way for incoming Dutere’s favored shift to a federal form of government when the 17th Congress convenes in July.
“We support federalism as it would help boost growth in the regions,” Sen. Juan Edgardo M. Angara said on Sunday.
Angara admitted that the federalism bill is expected to trigger
intense debates, but said they expect to start tackling the Duterte-backed federal proposal as soon as it is filed in the next Congress. “We can start the debates in the first year of the Duterte administration.”
He said early enactment of the federalism measure will also avert public suspicion that vested interests could insert other agenda, including lifting of term limits, in the process of amending the
1987 Constitution.
Sen. Aquilino Pimentel III is expected to refile an unpassed resolution asking Congress to submit to the electorate a proposal to convene a Constitutional Convention to consider amendments to the 1987 Constitution, including the shift from unitary-presidential to federal form of government.
“To dispel any doubts that the Constitutional reforms are being sought to advance political and economic interests of a chosen few, it would be more prudent, participatory and democratic to submit to the electorate the question of calling such a constitutional convention,” Pimentel said in Resolution 1308 he coauthored with outgoing Senator Teofisto M. Guingona III.
This developed as Angara also confirmed ongoing talks among different blocs racing to forge a new majority alliance comprising 13 senators to install a new Senate president in the next Congress, with Pimentel, a PDP Laban partymate of Duterte, vying for the post against other contenders that include Senate Deputy Minority Leader Vicente C. Sotto III of the Nationalist Peoples Coalition and Nacionalista Party Sen. Alan S. Cayetano.
Angara added, however, that current Senate President Franklin M. Drilon of the Liberal Party may yet cling to the post if the three rivals fail to muster majority support from their colleagues when the 17 Congress convenes its first session on July 25.
“If the required 13 votes are not mustered by any of the aspirants, by default, the incumbent Senate president will retain the post
because the Senate is a continuing body, unlike that of the House of Representatives, whose members’ terms expire every three years,” Angara said.