RESOURCE persons of the House of Representatives in its recent roundtable discussions (RTD) on Charter reform were one in pushing for the lifting of foreign investment/ownership restrictions in the Constitution’s economic provisions.
The House Congressional Policy and Budget Research Department (CPBRD) and Committee Affairs Department organized the RTDs in compliance with the directive of Speaker Ferdinand Martin G. Romualdez that the House study and review proposals to lift constitutional limitations that hinder the entry of foreign capital into the country.
Dr. Romulo Emmanuel Miral Jr., CPBRD head, told a news conference that the RTDs focused on the “challenge of attracting more foreign investments,” which he said President Ferdinand “Bongbong” R. Marcos Jr. himself has acknowledged.
He said other than constitutional restrictions, noted economists who participated in the discussions advocated the enactment of legislative measures that would increase investments and generate jobs, like those seeking to reduce the cost of electricity, cut red tape, lessen corruption, and further ease doing business in the country.
The RTDs resource persons included former finance secretary Margarito Teves, who is a member of the board of Foundation for Economic Freedom (FEF), UP economics professor and National Scientist Dr. Raul Fabella, and Dr. Dennis Mapa of the Philippine Statistics Authority, Dr. Francis Quimba of the Philippine Institute of Development Studies.
Teves told the forum that the country was the most restrictive in ASEAN and No. 3 globally among 83 nations in 2020 in terms of foreign capital inflow.
“The Philippines also has the highest restrictions in almost all sectors,” he said.
He said he and FEF support the move to aachange the Constitution’s restrictive economic provisions “to put the country at par with ASEAN peers in terms of the legal framework.”
He said the Philippines is the only country in Asia whose foreign capital/ownership restrictions are contained in the Constitution.
Teves suggested that any change in such limitations be done via legislation, which he added, “is much faster.”
He also pointed out that there are other “restrictions” that are not in the Constitution that hinder the flow of investments, like issues related to infrastructure, logistics, cost of power, governance, transparency, and permits issued by local government units.
He added that the LGU permitting process has become a great challenge for investors.
Miral said Dr. Fabella made an assessment of the investment climate in the country, noting that it has a lower savings rate (22 percent) compared to its ASEAN neighbors (28-33 percent), thus the need for outside savings like foreign investment to propel economic growth.
“Dr. Fabella supports the proposal to lift restrictions on foreign ownership in the Constitution because it is a more credible commitment to investors compared to opening up certain sectors through legislation (like the amended Public Service Act), which are easier to reverse,” he said.
The national scientist cited the case of NAIA Terminal 3-PIATCO scandal as an example of the cost (estimated at P25 billion) of foreign ownership restriction.
Miral said Mapa and Quimba, like Teves and Fabella, supported proposed changes in the Charter’s restrictive economic provisions.
