Philippine economy

PH economy open even without charter change but more can be done – Diokno

Ralf Rivas

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PH economy open even without charter change but more can be done – Diokno

BRIEFING. Finance Secretary Benjamin Diokno holds a press briefing on April 4, 2023.

Ralf Rivas/Rappler

Finance Secretary Benjamin Diokno wants to open up education and media to foreigners. For land, he favors long-term leases over ownership.

MANILA, Philippines – As lawmakers push to amend the Constitution for economic gains, President Ferdinand Marcos Jr.’s finance chief emphasized that the Philippine economy is already liberalized even without the controversial move.

“I think we have already opened up our economy,” Diokno said on Tuesday, April 4, when asked about where he stands on amending the economic provisions of the Constitution.  

Diokno, who was also former president Rodrigo Duterte’s budget chief, stressed that the previous economic team was successful in pushing for amendments to the Public Service Act without charter change. Ownership restrictions in telecommunications, shipping, toll roads, and airports were eased.

In 2022, a legal opinion of the Department of Justice boosted the Philippines’ renewable energy industry, noting that the sector is not subject to the Constitution’s ownership restriction of 40% for foreigners.

While the Duterte administration has liberalized the economy without amending the Constitution, Diokno acknowledged more can be done.

“We have made advances even without charter change, but admittedly there are provisions in the Constitution that are kind of protectionist,” he said.

Diokno is in favor of opening up education and media to foreigners.

“Why don’t we welcome branches of Yale or Harvard or other universities in the Philippines? Also, media is closed under the current Constitution,” he said.

For land, Diokno favors long-term leases of up to 50 years, which can be renewed for another 50 years, instead of outright ownership.

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Experts believe loosening ownership restrictions is not a necessary condition for economic growth.

University of the Philippines professor emerita Winnie Monsod earlier said constitutional amendments are “neither necessary nor a sufficient condition to attract foreign direct investments and may entail burdensome costs.”

Monsod also said the government must improve infrastructure and ease of doing business, as well as eradicate corruption. (READ: [ANALYSIS] Why charter change is needless right now)

In a House hearing on charter change, Ibon Foundation executive director Sonny Africa underscored that after three decades of rising foreign investments, the Philippine economy still does not have the capacity to build up investments on its own.

“If you want to develop the economy, we need sensible development policy. Nationalist provisions don’t deter foreign investments,” he said.

Former finance chief Margarito Teves supports economic charter change, saying it would enable the country to attract quality investors.

“With globalization, increase in foreign trade, agreements, and large corporations investing overseas, the current restrictive economic provisions are no longer aligned with these trends. These include foreign ownership of land, exploitation of natural resources, or equity in mass media and advertising, education, and the foreign practice of profession,” Teves said.

Public support for amending the Constitution has risen to 41%, a 10-percentage-point increase, according to a survey conducted by Pulse Asia last March.

While 45% of survey participants still prefer to delay charter change, that number is down by 11 percentage points. –

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.