FOREIGN CHAMBERS of commerce declared their support on Thursday for amending the 1987 Constitution, to the extent of proposing the removal of all economic provisions that restrict flexibility in regulating various industries.
“Our position is quite simple. We believe, in fact, that the best position would be to delete the economic provisions, all of them, from the Constitution and (regulate industries via) laws passed by Congress,” Canadian Chamber of Commerce of the Philippines President Julian Payne, speaking for the Joint Foreign Chambers of the Philippines at a hearing of the Senate committee on constitutional amendments and revision of codes.
“If that is not possible, we support the position that is basically taken in the resolution that you should add, ‘unless otherwise provided by law’ to each and every one of the economic provisions,” he added.
He was referring to the Resolution of Both Houses No. 3, filed by Senator Robinhood Ferdinand C. Padilla, which seeks to amend economic provisions of the Constitution through a constituent assembly (con-ass).
Mr. Payne said that any restrictions will reduce the volume of foreign direct investment (FDI) entering the Philippines. “The more restrictions you have, the less FDI you will have coming.”
“Regardless of what the sector is, the world moves quickly today and one of the things we have to focus on is: how do we amend restrictions?” he said.
Amending the constitution is slow, cumbersome and difficult for any country, he added. For this reason, the Philippines must choose a more flexible alternative, whether by law or by executive authority.
“In our view, the Philippines, if it wants to encourage FDI and minimize restrictions, must choose the most flexible (path) to allow for change, to respond to changes in technology, foreign investment, investor expectations, and responses to international competition,” Mr. Payne said.
“You should choose a means where you are able to adjust very quickly, and very flexibly to rapidly changing external conditions,” he added.
Should no changes be made to the constitution, Mr. Payne noted that “legal issues” may arise.
“But if the law is amended or the provisions are deleted, then the issue would no longer exist,” he added. “Although that may also be challenged, for that you would have to consult with a lawyer.”
Mr. Padilla, who chaired the hearing, believes that easing the charter’s economic provisions was the only way to attract FDIs.
The Philippines is currently “languishing” in terms of FDI, he added, citing data from the Bangko Sentral ng Pilipinas indicating that FDI dropped 25% between 2018 and 2020.
For the Philippines to recover from the effects of the COVID pandemic, Mr. Padilla said that it would need new “drivers of growth” including opening up the economy to more FDI.
“There is a basis for seeking such amendments; this is not political grandstanding. This is addressing a real need of our country,” he said.
“We are moving to prioritize amending our economic provisions because this will help address the most pressing needs such as joblessness, hunger and poverty,” he added.
Mr. Payne also noted that the benefits of FDI went beyond funding.
“Foreign direct investment is not just dollars, it’s also transfer of technology, and it’s also the establishment of businesses which lead to international trade,” he said, “so we must not measure foreign direct investment solely in terms of dollars.”
He also noted his appreciation to the previous Congress for the amendments to the Public Service Act, Retail Trade Liberalization Act and Foreign Investments Act, as well as to the administration for clarifying the definition of natural resources.
However, Mr. Payne said “these are just first steps” as there was more to be done.
Eula Pertubos-Arias, a lawyer with the Davao-based Jose Maria College Foundation, Inc.’s College Law, said that the Constitution should not act as “a hindrance” to economic activity.
“Maybe, if we… liberalize these restrictive provisions… we can attract more FDI to the Philippines,” she said.
“We will be changing the paradigm of the Philippines,” she added. “Instead of being too restrictive, we have to set it to become more welcoming to the foreign investors.”
Ms. Arias noted the trend of Southeast Asia opening up to FDI, adding that the Philippines should not be left behind.
Ms. Arias recommended the constitutional convention (con-con) route to amending the charter as it would allow the participation of the people.
“The process of proposing an amendment to the Constitution will be a big part of our history, so from the very onset we have to make it right, we have to have people’s participation in proposing amendments,” she said.
A House of Representatives body has passed a measure detailing the procedures for charter change through a hybrid con-con.
However, if the objective is speed, Ms. Arias said that con-ass would be preferable as it would do away with the people’s vote for delegates.
National Economic and Development Authority (NEDA) Undersecretary Krystal Lyn T. Uy, speaking at the hearing, also said that the cost of a con-ass would be significantly lower than a con-con.
“The discrepancy is huge. The difference from a con-con to a con-ass is more than P10 billion,” she said.
“Based on our initial computation… if it’s a separate national election and national plebiscite, for a con-con, it would be P28 billion, but if it will occur simultaneously, it will cost P331 million,” she added. “For con-ass, if it’s separate, it will cost P13.8 billion, but if it’s held simultaneously, it will only be P30 million.”
In the House measure, the election of delegates for the convention will take place on Oct. 30, the same date as the village and youth council elections. — Alyssa Nicole O. Tan