Liberalization bills pending in Congress are not enough to attract foreign investments, according to an economist-lawmaker.
Albay Rep. Joey Sarte Salceda issued the statement after Trade Secretary Ramon M. Lopez expressed hesitation over Charter change and indicated that he prefers legislative reforms over constitutional amendments.
Lopez has said that it would be better if lawmakers focused on pending economic and liberalization bills that will remove restrictions on foreign investments.
Salceda said, however, that “the law can only be changed to a limited extent.”
“We have our hands tied. The House has already moved with the amendments to the Public Service Act, the Foreign Investment Act, and the Retail Trade Liberalization Act. They will open us up for foreign investment significantly. However, even after such changes, we will still remain among the most restrictive to investments in the region because we cannot escape constitutional restrictions on foreign equity,” Salceda added.
“I think the idea that we should just focus on legislative changes gets the root of the problem wrong. The Constitution bound the future generations to restrictions that were always destined to prove highly impractical. It delved into details that were no longer fundamental. Foreign equity restrictions are not basic principles. The charter should not have precluded future generations from these crucial decisions.”
Earlier, Speaker Lord Allan Velasco said the lower chamber will continue to push for the final passage of the New Public Service Act (House Bill 78), Foreign Investments Act (House Bill 300), and Retail Trade Liberalization Act (House Bill 59), the Corporate Recovery and Tax Incentives for Enterprises Act and National Land Use Act in Congress. All these bills are pending in the Senate.
Solution
Deputy Speaker Bernadette Herrera, meanwhile, said liberalizing the economic provisions in the 1987 Constitution could be the solution to the decades-old problem of forced migration caused by lack of better opportunities in the country.
Herrera said the economic Charter amendments proposed under Resolution of Both Houses (RBH) No. 2 would help attract foreign direct investments (FDI).
“By opening up the economy to foreign investors, we will be bringing the opportunities closer to Filipinos, which means they don’t need to work overseas because high-paying jobs will be available for them here,” said the Bagong Henerasyon Party-list representative.
The country’s FDI inflows have been on a decline since 2019. FDIs from January to November 2019 amounted to $6.4 billion, 30 percent lower than the $9.2 billion recorded in the same period in 2018.
According to the Philippine Statistics Authority, total foreign investments approved in the third quarter of 2020 amounted to only P31 billion, which is 83 percent lower than in the same period in 2019.
Herrera noted that the Philippines also lags behind its Asean peers in terms of attracting FDI mainly because of foreign ownership restrictions in the Constitution.
“Easing restrictions on foreign investments will surely make the Philippines more foreign investment-friendly,” Herrera said.
The Constitution limits foreign ownership of land and businesses to only 40 percent and reserves the other 60 percent to Filipino citizens or corporations.
RBH No. 2 seeks to insert the phrase “unless otherwise provided by law” to several sections of the Constitution which restrict foreign ownership of land, natural resources, public utilities, media and advertising.
It provides that by a vote of three-fourths of all its members, the Senate and the House of Representatives voting separately could propose amendments to Articles 12, 14, and 16 of the Constitution.
1 comment
DELETE all Economic Restrictions from the 1987 Constitution and put them all in LEGISLATION whenever certain sectors or industries requires it. That way, we’ll be meeting the Global Requirements as an “FDI-Friendly Country”.
Currently, the Philippines ranked 4th as the most restrictive country to Foreign Investments in the entire world. Further, we are the only country on planet earth where Economic Restrictions were hard-coded enshrined inside their Constitution. Other countries do not have such barriotic provisions in their Constitution but rather they put them only in Legislation.
#OpenFDI means #JobsJobsJobs
#CoRRECTtheConstitution