THREE key resource persons invited by a Senate subcommittee hearing on Resolution of Both Houses No. 6 regarding Charter change weighed in against amending the 1987 Constitution now.
They said its economic provisions should not be made a scapegoat for the lack of foreign direct investments, as this will further draw attention away from the real problems.
Hours after the hearing, the Bangko Sentral ng Pilipinas reported in a separate development that the 11-month FDI net inflows from January to November 2023 suffered double-digit contractions, attributed mainly by BSP to “the lingering impact of high inflation and low growth prospects globally.”
Economist Bernie Villegas, former Comelec commissioner Rene Sarmiento and former Supreme Court Senior Associate Justice Antonio Carpio cited different reasons for the poor investments draw of the Philippines—but not the Charter’s allegedly restrictive provisions‚at the second hearing of the subcommittee chaired by Sen. Juan Edgardo Angara.
Villegas and Sarmiento are former members of the 1986 Constitutional Commission.
In his presentation, Villegas noted the growing interest in recent years on agribusiness investments, including from local conglomerates like the MVP Group.
The government, he said, should cash in on this growing interest, because it shows businessmen, both local and foreign, have found it lucrative to invest in agriculture.
And, Villegas also noted, the feedback he got was that “those who want to invest in agriculture here do not require land ownership.”
For his part, Sarmiento pressed the need to “unlock the potential of Filipinos” for “the country’s economy to soar high.”
He expressed “respectful reservations” on Resolution No. 6 of the House and Senate, saying there are so many pressing problems that should get priority.
Justice Carpio counseled against falling for the “false premises” that pin the blame for low FDI on the allegedly restrictive economic provisions. The fact, he said, is that “the Philippines today has one of the most liberalized regimes,” and noted how the recently amended Public Service Act (by the 18th Congress) had opened wide the ownership of key sectors to foreigners. Generation of renewable energy was recently opened to foreign ownership by a mere Department of Energy issuance; while retail trade and banking have also been liberalized, he noted.
Carpio disputed arguments that the Philippines has the most restrictive regime compared to its neighbors, and added that land ownership is not a deal breaker for most huge foreign investors.
What turns them away are these things, Carpio said: the high cost of power, which for manufacturing firms accounts for 30 percent of operating expense; bureaucratic red tape; and poor infrastructure.
The second hearing led Monday by Angara was a continuation of the Constitutional Amendments and Revision of Codes Subcommittee hearings mandated by the Senate leadership.
Angara, in his opening statement, said the discussion will be focused on the amendment that deals with public utilities and public services.
“To start off the hearing, we wish to focus on the amendment which deals with public utilities and public services under Section 11 of Article 12, the National Economy and Patrimony,” Angara clarified.
Angara cited Republic Act No. 11659 or the Public Service Act, sponsored by Sen. Grace Poe, which was signed into law on March 21, 2022 amending the 85-year-old Commonwealth Act No. 146 by relaxing restrictions on foreigners to completely own businesses in the country.
Angara noted that under the law (RA 11659) public utility was clearly defined and distinguished from a public service and the constitutional 60/40, an equity limitation was stated to apply to the following public utilities: distribution and transmission of electricity, petroleum and petroleum products, pipeline, transmission systems, water pipelines, distribution systems and wastewater pipeline system, seaports, public utility vehicles, and for 100 percent foreign ownership to be allowed includes airports, railways, expressways, telecommunications, domestic shipping subways, among others.
Open for business–Poe
Poe said, for her part, the Philippines has made strides in opening up the local economy. She maintained that the country is already “open for business” through RA 11659, and other existing laws allowing foreign investments into the country.
Having shepherded the amended PSA in the Senate during the 18th Congress, the Committee on Public Services chairperson said the PSA addresses the objectives of the proposed amendments to the 1987 Constitution’s economic provisions without having to tweak the country’s Charter while protecting the Filipino interest and national security.
“We have opened up our economy. We have done so without violating or amending the Constitution. We did not need to convene a Constitutional Commission, Constitutional Assembly, or a fake People’s Initiative,” Poe said in a mix of Filipino and English.