THE proposal amending the “restrictive” economic provisions of the 1987 Constitution or the economic Charter-change on Tuesday secured more than the required three-fourth votes of all members of the House of Representatives.
Voting 251 affirmative, 21 negative and 2 abstentions, the House passed on third and final reading the Resolution of Both Houses (RBH) 2.
The lower chamber will now transmit the measure to the Senate for its own deliberations. This, although Senate President Vicente Sotto III had said they will focus on the three economic measures certified urgent by the President, and which “economic Cha-cha” critics say best discount the need to amend the Constitution. These are amendatory bills to the retail trade liberalization, Foreign Investments Act and the Public Services Act.
The senators have only two session days left before Congress goes on sine die adjournment until July 24.
Liberalize economic provisions
RBH2 authored by Speaker Lord Allan Velasco seeks to liberalize the “restrictive” economic provisions in the Constitution that prevent the Philippines from becoming fully competitive with its Asian neighbors.
It seeks to insert the phrase “unless otherwise provided by law” to several sections of the Constitution, which restrict foreign ownership of public utilities, educational institutions, media and advertising.
The proposal amends certain sections of Article XII (National Economy and Patrimony), Article XIV (Education, Science and Technology, Arts, Culture and Sports) and Article XVI (General Provisions).
The addition of the “unless otherwise provided by law” phrase will allow Congress to enact laws to free up the economy to foreign investors, or maintain the status quo, its proponents said.
Velasco said Congress is eyeing to present to the public for ratification the amendments to the Constitution’s economic provisions alongside the national elections in 2022.
Senate action
House Ways and Means Chairman Joey Sarte Salceda, a principal sponsor of the proposed RBH 2, said he believes there is time to complete the legislative process in the proposal “in time for plebiscite in 2022.”
Salceda also renewed calls for the Senate to pass its own counterpart measure.
“The ball is now with the Senate. One thing the House leadership has proven with our expeditious passage of economic reforms is that we are not standing in the way of tunay na pagbabago on the economic front. Speaker Velasco has promised to be a modernizing force in policymaking, and so far, he has delivered,” Salceda said.
Salceda also repeated his assurance that the House has no intent of introducing political provisions to the proposed revisions.
“RBH 2 is pure economic reform. We know and understand that any political charter change will be dead on arrival. Senate President Sotto has made this clear, and we are also making our intentions and position abundantly clear.” Salceda added.
“We still have time to finish this process. These are not extensive provisions. They merely open the possibility for Congressional action towards greater openness to new jobs and new industries. So, we hope the Senate can take action soon,” Salceda explained.
Salceda called on the country’s lawmakers to “simply do what already worked for our neighbors” in Southeast Asia.
Salceda cited the success of foreign investment liberalization reforms undertaken by Vietnam.
“Vietnam began to overtake us in FDI-to-GDP by 1990, just 3 years after Doi Moi and the 1987 Constitution. Due to this underperformance, the average Vietnamese will be wealthier than the average Filipino over the next decade,” Salceda said.
Salceda said that the 1987 Constitution “hardcoded paranoia” and “limited the progress of future generations with the fears of the past.
Salceda also cited that the Philippines is the most FDI-restrictive country in the Association of Southeast Asian Nations (Asean).
“We have the most doors closed of any Asean country. And we expect visitors to come. This makes no economic or logical sense,” Salceda said.
“We need investments to come. So, what makes sense is to open the doors that we can,” Salceda added.
According to the 2019 OECD FDI restrictiveness index, the Philippines has the highest restrictiveness score of any country in the ASEAN region.
‘Defective and deficient’
Albay Rep. Edcel Lagman, who voted against RBH 2, said the initiative is “defective in form and deficient in substance.”
“As to form, it is not compliant with Article XVII of the Constitution wherein there are only three recognized modes of proposing amendments to the Constitution: Constituent Assembly, Constitutional Convention and People’s Initiative,” Lagman said.
Lagman said it is also deficient in substance because the proposed amendment reading “unless otherwise provided by law” will allow Congress to amend the Constitution with unlimited discretion by legislation on the details of liberalizing the economic restrictions in the Constitution.
“The contingent legislation does not give the people at the time of the ratification of the proposed amendments [information] on the metes and bounds of the substantial amendments to the Constitution which will be effected by Congress through ordinary legislation,” Lagman said.
Also, the liberalization of the so-called restrictive economic provisions in the Constitution by legislation will remove the special protection to Filipino capital and entrepreneurs and will derogate the preservation of the national economy for posterity, Lagman said.
“Moreover, there is no need to remove the so-called restrictive economic provisions in the Constitution to encourage the entry of foreign direct investments if the Philippines is able to resolutely address the composite determinants of FDIs like ease of doing business; infrastructure inadequacy; incidence of corruption; tax regulation and rates; internet speed and power costs; size of the economy and inflation; and predictability of policies,” he added.
Gabriela Rep. Arlene Brosas described the passage of the economic Cha-cha as “the most dangerous and most shameless Cha-cha” in Philippine history.
“We in Gabriela Women’s Party express our strongest objection to Resolution of Both Houses No. 2 or Chacha, as it is not only out of tune from the current exigencies of the times but also patently dangerous to the interests and welfare of Filipino women and the people,” she said.
“Ito ang natatanging Chacha na ginagawang prayoridad sa gitna ng pandemya at pagdurusa ng kababaihan mamamayan para paburan ang dayuhang kapital,” Brosas added.
With the Charter change, she said the amendments to foreign equity restrictions will be introduced through ordinary legislation.
“Sa madaling salita, konsentrado sa Kongreso ang kapangyarihan na luwagan ang economic provisions sa Saligang Batas. Let us not put ourselves above the Charter of the republic and act as final arbiters on economic restrictions,” she said in explaining her “no” vote.
Image credits: Robinson Ninal Jr./Malacañang Presidential Photographers Division via AP