Malacañang kept mum on renewed efforts of Philippine business groups and foreign chambers of commerce to have the economic provisions of the 1987 Constitution amended.
The business groups over the weekend aired anew its “strong support” for the passage of a long-pending House-Senate resolution for Charter change (Cha-cha).
The resolution, authored by Speaker Feliciano Belmonte Jr., proposes to include the phrase “unless otherwise provided by law” in some sections of Articles XII (National Economy and Patrimony); XIV (Education, Science and Technology, Arts, Culture and Sports); and XVI (General Provisions).
Asked on Sunday if President Aquino would heed the latest appeal of foreign and local business leaders supporting the clamor for Cha-cha to relax restrictions on foreign equity ownership, Communications Secretary Herminio B. Coloma Jr. could not give a categorical Palace position on the issue. “No info on that,” Coloma said.
In a joint statement issued over the weekend, the Makati Business Club, three major business groups and six foreign chambers urged senators and congressmen for early approval of Resolution of Both Houses 1 (RBH 1), championed by Belmonte.
It added that RBH1 has been approved on second reading in the plenary, but the third-reading vote requires approval of three-fourths of the members of the House. “Speaker Belmonte has placed
passage of the resolution among his highest legislative priorities during the recently resumed House session,” the businessmen noted.
They pointed out that Senate President Franklin M. Drilon had also “committed to our business groups that the Senate will discuss the counterpart resolution in the Senate authored by Sen. Ralph Recto after RBH1 is approved by the House.”
“We wish to emphasize several points in support of early approval of RBH1: Since the year 2000, Filipino business leaders and economists have recommended replacing the constitutional restrictions on foreign equity with specific laws. RBH1 is the first serious effort to undertake this often-recommended reform,” the statement added.
According to the businessmen, “the constitutions of almost all countries in the world do not contain restrictions on foreign investment. Most countries [which] do impose some restrictions on foreign investment do so through legislation or administrative orders that can be changed to suit shifting national priorities.”
They asserted that much has changed in Asia since the restrictions were placed in the 1987 Constitution, noting that the Philippines has joined the World Trade Organization, agreed to open trade and investment within Asean and with Asean Plus partners Australia, India, Japan, South Korea and China.
The businessmen also recalled that just recently, the Trans-Pacific Partnership (TPP) was agreed upon by 12 countries that account for 40 percent of global GDP. “Because the TPP provides for minimum barriers to cross-border investment flows among members, the Philippines may not be able to join unless some restrictions can be reduced,” they said.
They prodded the government to “maximize the amount of foreign investment generated as a means to drive down unemployment and underemployment levels, pointing out that while there has been a significant increase in FDI [foreign direct investment] since 2010, amounting to over $6 billion a year in 2014, this represents only 5 percent of total FDI in Asean, which is small considering that the Philippines accounts for 16 percent of the population of Asean.”
“Note as well that in recent years, Asean has received more FDI than China, estimated to be in the amount of $100 billion per year,” the businessmen said.
Moreover, they pointed out that there have been only two significant liberalizations (covering casinos and retail trade) in the Foreign Investment Negative List over the more than two decades since the important 1991 reforms in the Foreign Investment Act was made.
“Constitutional restrictions on foreign ownership on certain industries will remain until Congress and the President enact specific laws to remove or amend them,” they added. “We believe that achieving our goal of sustainable and inclusive growth requires the generation of a significant number of jobs. Attracting massive amounts of foreign-investments, meanwhile, is among the best means by which to create these employment opportunities. Easing our foreign investment restrictions may also be critical in light of our commitments to the Asean Economic Community, and our aspiration to join the Trans-Pacific Partnership and forge an advanced free-trade agreement with the European Union.”
The businessmen added that considering the above points, “it is our strong position that there is no better time than now to begin the process of updating the outdated restrictions in our Constitution through RBH1.”
They noted that the Philippines has enjoyed enhanced economic prospects and is on the radar screen of the international investment community—and these will be further improved by higher foreign investments. “It will be unfortunate if the Philippines fails to take advantage of this golden opportunity and realize the potentials that a liberalized trade and investment regime will bring.”