Philippine economy

Con-Con can spook investors, derail economic gains – business groups

Lance Spencer Yu

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Con-Con can spook investors, derail economic gains – business groups
Business groups also say that funds for the constitutional convention – which can cost up to P27 billion – are better spent on 'pro-people programs'

MANILA, Philippines – Philippine business organizations have urged lawmakers to reconsider their bid for a constitutional convention (Con-Con) to amend the 1987 Constitution, calling it is a “potentially disruptive proposal” that may drive away investors and mute the gains of the government’s economic reforms.

The business groups said this in a joint statement where they cited several points to support their concern. It was signed by the Makati Business Club, the Financial Executives Institute of the Philippines, Filipina CEO Circle, Justice Reform Initiative, Philippine Women’s Economic Network, and the Women Business Council Philippines.

“We respectfully urge the Senate – and the House, if and when the deliberations progress – to consider these and other points raised by our colleagues in various sectors as you decide on this potentially disruptive proposal at a time when the country may be poised to regain its economic momentum,” they said.

The groups said that while they have “long supported proposals to amend economic provisions of the constitution that impede trade, investment, innovation, competition, and economic and job growth,” a Con-Con held at this time may not be the best way to stimulate the economy.

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“Investors look for stability when making investment decisions. The possibly lengthy and fractious process of amending the constitution may make investors take a wait and see attitude for an extended period of time and therefore derail the impact of the reforms,” they said.

They noted that existing laws have already loosened economic restrictions, citing amendments to the Public Service Act, Retail Trade Liberalization Act, and Foreign Investment Act, as well as the passage of the Rice Trade Liberalization Act and the recent Department of Energy circular allowing full foreign ownership of businesses engaged in renewable energy. 

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The groups also flagged the high financial costs of a Con-Con, believing that the funds could be better spent on “pro-people programs.”

Under the House bill detailing the Con-Con process, 300 delegates will get P10,000 per day, or a total of P3 million per day – adding up to P400 million for the seven-month convention period. The National Economic and Development Authority estimated that the entire Con-Con process could cost between P14 billion to P28 billion.

“For the low-end estimated cost of P14 billion, the government could instead double the spending on farm to market roads; increase by half the spending on irrigation or the national rice program; double the spending on school buildings; or almost double the spending on hospitals and health centers,” the groups said.

The Senate Committee on Constitutional Amendments and Revision of Codes – headed by first-time senator Robin Padilla – is currently touring provinces and holding consultative meetings on the proposed amendments. – Rappler.com

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Lance Spencer Yu

Lance Spencer Yu is a multimedia reporter who covers the transportation, tourism, infrastructure, finance, agriculture, and corporate sectors, as well as macroeconomic issues.