Apart from the Maharlika Investment Fund, lawmakers are railroading another bill that stands to bring about dubious economic benefits: charter change.

Specifically, Representative Rufus Rodriguez and his colleagues are pushing for Resolution of Both Houses 6 that seeks to amend the 1987 Constitution through a Constitutional Convention (Con-Con) comprising about 300 members from the legislative districts and different sectors.

If the plan pushes through, delegates of the Con-Con will be elected October 30, 2023, start work on November 20, and end on June 30, 2024. All this is expected to cost about P5 billion.

The House leadership has been pushing for this aggressively in the past couple of months, and they have even paraded the proposal in roadshows across the country.

In February at Cagayan de Oro City, Rodriguez touted that the talks around charter change are motivated by a desire to amend the Constitution’s economic provisions.  

Supposedly, the Constitution’s economic provisions are brought up again and again when President Ferdinand Marcos Jr. and his cousin, Speaker Martin Romualdez, talk with businesspeople abroad. The gist of investors’ sentiment is that, “We would like to come to the Philippines but your Constitution limits our participation, our equity.”

In end-January, during public consultations, Rodriguez et al. found support in some economists. National Scientist Raul Fabella, for instance, said that he’s okay for some constitutional provisions to be dropped, including the one saying that Filipinos should own at least 60% of certain industries. 

Others who are amenable to charter change include Margarito Teves, former finance secretary, and Gerardo Sicat, Marcos Sr.’s top economist and first director-general of NEDA, who has advocated for easing the economic provisions all his life.

But note that in March 2022, former president Rodrigo Duterte already signed the law amending the 1936 Public Service Act. Essentially this paves the way for 100% foreign ownership in industries like telecoms, airlines, shipping, toll roads, transport network vehicles, and railways – all without having to change the Constitution.

Meanwhile, another former NEDA head, UP Professor Emerita Winnie Monsod, argued compellingly – citing study after study – that charter change is not a necessary condition for a country to grow its economy. She said: “Amending the Constitution is neither necessary nor a sufficient condition to attract FDI (foreign direct investments) and may entail burdensome costs.”

Moreover, Monsod mentioned the equally compelling idea that other more urgent constraints to investing must be addressed before anything else. These include issues surrounding “infrastructure, governance, corruption, (and) ease of doing business.”

For instance, how will investors flock to the Philippines if we have a trash transportation system, where getting from point A to point B in the same city can take one hour? Or if we have a looming power crisis that can derail production in years to come? Of if there is no level playing field, and competition authorities are hard put to reduce the market power of certain monopolies or oligopolies? Or if corruption and red tape are rife? Or if rule of law is broken, and the application of the law depends on your income or connections?

Even if you have a Constitution that provides for 100% foreign ownership in all sectors, without a nice, stable business environment to thrive in, we can’t expect investors to suddenly flock in droves.

Opening up to foreigners some strategic sectors, including electricity and water, can also potentially compromise our national security. Note that Chinese state-owned companies already have presence in Philippine telecoms, electricity distribution, and even water and natural gas supplies. At the same time, the Chinese government continues to control huge swathes of our exclusive economic zone in the West Philippine Sea. They even pointed powerful lasers at our patrol vessels recently.

Neither is charter change top of mind among Filipinos. 

Back in 2018, Pulse Asia revealed that 64% of respondents said they don’t want charter change – higher by 20 percentage points than in a similar survey in 2016. 

Fast-forward to September 2022, charter change didn’t even come up in the list of Filipinos’ “most urgent national concerns.” By contrast, what came up on top were “controlling inflation” (66%), “increasing the pay of workers” (44%), “creating more jobs” (35%), and “reducing the poverty of many Filipinos” (34%).

The Marcos administration will do well to focus on these issues instead. Combating inflation should be prioritized. The Bangko Sentral already said that inflation may have even increased further in February, between 8.5% and 9.3%. Why is this government miserably failing to fight inflation?

Finally, Senator Robin Padilla recently claimed in a public hearing in Davao City that the 1987 Constitution needs to be amended because after almost 40 years, it’s still an “obstacle” to economic growth because of its foreign investment limits.

But the good senator might learn a thing or two from my first book, False Nostalgia, published last week: if there’s anything that pulled down our economic trajectory in the 20^th century, it was Martial Law and Marcos Sr.’s economic mismanagement – not the 1987 Constitution. – Rappler.com

JC Punongbayan, PhD is an assistant professor at the UP School of Economics and the author of False Nostalgia: The Marcos ‘Golden Age’ Myths and How to Debunk Them(to be restocked soon on Lazada and Shopee after being sold-out in just 2 days after the launch). JC’s views are independent of his affiliations. Follow him on Twitter (@jcpunongbayan) and Usapang Econ Podcast.