In January, the representatives of the Lower House of Congress have opened deliberations on charter change (Cha-Cha) through a resolution (Resolution of Both Houses No. 2) filed by Speaker Lord Allan Velasco to convene Congress as a Constituent Assembly (Con-Ass) and amend the “restrictive” economic provisions of the Constitution. 

The Cha-Cha proponents pledge that their move does not include opening up other amendments, especially term extensions. President Rodrigo Duterte also sent a marching order to Congress to amend the party-list system so as “to protect [Congress] from groups calling for the fall of government.” It seems Cha-Cha is going to be a strategy to kill two birds with one stone (the protectionist economic provision and the party-list system). 

The ‘economic’ Cha-Cha

The “economic” Cha-cha, under RBH No. 2, merely adds the phrase “unless otherwise provided by law” to 8 “economic” sections of the Constitution, which refer to the country’s natural resources, agricultural lands, private lands, areas of investments, operation of public utility, ownership of educational institutions, mass media, and advertising industry. All these areas are reserved for the state, Filipino citizens, or corporations with 60% Filipino ownership, save for private lands which are strictly for Filipinos. 

So far, the only dissent coming from the opposition, basically the Liberal Party, is that Cha-Cha is not a priority issue, and it will open only other issues, such as term extensions, which would be favorable to the ruling coalition. 

There seems to be no factional differences between the administration parties and the so-called “yellow opposition” on the need for economic liberalization and the opening of the country to “globalization.”

Previous administrations have, in fact, tried to change the protective economic provisions in favor of full-fledged liberalization from the time of Fidel V. Ramos, Joseph Estrada, and Gloria Macapagal-Arroyo. Cory Aquino herself enacted Executive Order 226 5 months after the ratification of the “Cory Constitution” in February 1987. Cory’s son Benigno “Noynoy” the Third did not tinker with the Constitution but still pursued neoliberal policies that chip away at the protective clauses of the charter. 

The elite representatives in government do not really need to change the “restrictive” economic provisions of the Constitution as there have been ways to circumvent them. The usual way to breach the 60-40 ownership rule, for instance, is through dummies.

Amendments after amendments

There are legislative means to amend the “restrictive” clauses. The 60-40 rule and foreign ownership of land have been amended a number of times through the Omnibus Investments Code of 1987, the Foreign Investments Acts of 1991, the Investors’ Lease Act of 1993, and the Special Economic Zone Act of 1995.

The Omnibus Investments Code under Executive Order 226 enacted by Cory Aquino allows corporations to bypass the 60% Filipino ownership requirement if they are “pioneer enterprises” whose manufacturing or services activities are not being produced in the country, untried in the Philippines, highly essential to national program for self-sufficiency, or produce non-conventional fuels.

This was followed by the Foreign Investments Act (FIA) of 1991, also under the Cory administration, which eliminated the 40% restriction and allowed for 100% foreign equity participation in most enterprises. This is limited only by the Negative List under Section 8 which consists of areas of investments reserved for Philippine nationals (List A), and are defense-related or have implications on public health and morals (List B). The Negative List is frequently modified and amendments are issued almost every two years. 

The FIA was amended by Republic Act No. 8179 during the term of Fidel V. Ramos. From thereon, succeeding administrations have updated the Negative List of the Foreign Investments Act to further open the economy for foreign participation. 

President Duterte issued the 11^th regular investment’s negative list through Executive Order No. 65, which widened the areas of investments with 40-percent foreign equity, such as in the exploitation of natural resources, ownership of private lands, operation of public utilities, educational institutions, and others.

The Investors’ Lease Act and the Ecozone Act

The Investors’ Lease Act of 1993 (RA No. 7652), passed under the Ramos administration, allows foreign investors to lease land for commercial and industrial use for 50 years and renewable for 25 years. This is a total of 75 years, which is almost like owning the land!

It was followed by the Ecozone Act of 1995 which allowed the designation of “ecozones” or “agro-industrial, industrial tourist/recreational, commercial, banking, investment and financial centers” that exempt foreign investors from paying local and national taxes. 

Ideological stand of the dominant classes

Economic liberalization has become the mantra of the dominant classes. It is an ideological stand taken by the ruling classes in the Philippines on how they want to propel a path to growth and development that serves their interests. It is not about the country, nor about the working class and the Filipino masses.

The traditional elite is, in fact, complicit to a growth dominated by foreign corporations and multinationals. They do not want to compete with them because they are incapable of doing it, and they want joint undertakings to bolster their own profits. 

The industries that the 50 richest individuals/families in the Philippines are engaged in are mostly in commercial, trading, and services industries. Many have diversified into real estate. Others have gone into mining and other extractive industries fronting for foreign capital or striking joint ventures with them. There are a few engaged in small manufacturing businesses, like in food and beverages and pharmaceutical industries. These industries, including the small manufacturing businesses, do not constitute the core of an industrialized economy. 

The more capital-intensive industries in the Philippines have been taken over by foreign corporations which are allowed to operate outside the Negative List of industries, such as in mining (one of the largest company is Oceana Gold owned by Australian capital). The foreign investments that the country attracts today are mostly in extractive industries that do damage to the environment and the small foreign firms in the ecozones that exploit our cheap and non-unionized labor.

Towards a People’s Cha-Cha

Instead of chasing after foreign investments by offering our lands and resources, we should make the oligarchy pay for the centuries-old monopolization of wealth in the country. There is a need to redistribute wealth by nationalizing their businesses, starting with the public utilities, and socializing it for the benefit of the majority of the people. We can start now by heavily taxing their wealth and assets to provide welfare for the vast majority of people, which should be the starting point of any development model.

However, the state protects not the interests of the people but the interests of the capitalists, including the traditional elite and the dynastic clans. The safest way for us is not to touch the Constitution until the present breed of trapos, the oligarchy, and the capitalist-landlord government is deposed by genuine people’s power. Only then can we change the Constitution to become the People’s Constitution. – Rappler.com

Sonny Melencio is a long-time activist in the Philippines and the chairperson of the Partido Lakas ng Masa (PLM). He is also the author of a semi-biographical book titled Full Quarter Storms: Memoirs and Writings on the Philippine Left.