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Two economist turned legislators said removing the restrictions on foreign investors under the 1987 Constitution was a “necessary first step” to push the Philippine economy forward.
Marikina City 2nd District Representative Stella Quimbo and Albay 2nd District Representative Joey Salceda made their respective pitches in favor of the proposed economic charter change (Cha-Cha) as plenary debates kicked off for Resolution of Both Houses (RBH) No. 2 on Monday afternoon, February 22.
For Quimbo, amending the restrictive economic provisions in the Constitution was just part of the “long to-do list” for the Philippines. That "list" included investing in infrastructure, reducing the cost of power, eliminating corruption, reducing red tape, and ensuring the rule of law prevails.
“But the necessary first step is to remove the restrictive economic provisions in our Constitution, or else, we risk being left further behind," Quimbo said.
"RBH 2 is not a sufficient condition for inclusive growth, but it is necessary to move forward," she added.
This was echoed by Salceda, who said he was “under no illusion that RBH 2 is a magic wand for all of our problems, but it is a necessary beginning.”
RBH 2 proposes to add the phrase "unless otherwise provided by law" to constitutional provisions saying only Filipino citizens can control, own, and/or lease alienable lands of public domain, natural resources, public utilities, educational institutions, mass media companies, and advertising companies in the Philippines.
This means lawmakers would be able to use legislation to lift the current prohibitions on foreign investors – something the Constitution does not allow Congress to do at the moment.
Quimbo said giving this flexibility to Congress is not about simply opening the flood gates to foreign investments.
"It is not a free pass. By including the phrase 'unless otherwise provided by law,' the measure provides flexibility to these economic provisions, but still allows the legislature to address the fear of some of our countrymen that we will be inundated with foreign businesses, to the detriment of local industry," she said.
Cha-Cha efforts have been revived in the House upon the orders of Speaker Lord Allan Velasco, who wanted to ease the restrictions on foreign investors to help the country recover from the coronavirus pandemic.
But this was just the latest twist in efforts to change the charter under President Rodrigo Duterte, who ordered Congress leaders to revive Cha-Cha not with COVID-19 in mind, but to further crack down on leftist party-list lawmakers.
Senators were still opposed to amending the Constitution, believing it would be "more practical" to just pass bills designed to attract more foreign investors than opting for the divisive Cha-Cha route.
Salceda said it had been a mistake to “hardcore our fears and paranoia” into the Constitution, which was drafted following the 21-year dictatorship of the late president Ferdinand Marcos.
Salceda believes the constitutional restrictions on foreign investors not only forced the Philippine economy to mainly rely on domestic consumption; it also allegedly helped Filipino oligarchs thrive.
He cited the World Economic Outlook Global competitiveness index in 2017 to 2018 that showed the Philippine market was dominated by the fewest business groups in the ASEAN region.
“Our experience of a period of dictatorship is not unique in the region, Mr Speaker. But among our neighbors, only we decided that one way to prevent the same abuses was to keep power in the hands of the oligopolistic few, instead of allowing the world to offer its best to us,” Salceda said.
“It makes little sense now. The mature thing to do for a country like ours that has global ambitions is to grow up, acknowledge our misjudgment, and correct our mistake. It is never too late to do the right thing,” he added.
Both Finance Secretary Carlos Dominguez III and Trade Secretary Ramon Lopez supported RBH 2, though the Cabinet officials refrained from dwelling on the political issues hounding Cha-Cha.
But the Philippine Chamber of Commerce and Industry already cautioned lawmakers against using Cha-Cha to relax economic restrictions amid the pandemic-induced recession.