NO way will the Philippines be able to attract foreign investment solely through the passage of pertinent laws unless the restrictive economic provisions in the Constitution are relaxed.
Dr. Romulo Emmanuel “Dr Jun” Miral Jr., chief of the Congressional Policy and Budget Research Department (CPBRD), and House Deputy Majority Leader and Tingog Party-list Rep. Jude Acidre jointly expressed this viewpoint during a press conference on Thursday.
CPBRD serves as the think tank of the House of Representatives. Its mission is to provide ideas, policy advice, technical assistance, and information support in the formulation and oversight of socioeconomic legislation that promotes sustained inclusive growth.
Miral pointed out that legislative efforts to attract foreign investment would be futile if the 1987 Constitution, the cornerstone of the country’s legal framework, is the root of the issue.
He cited the case of the law amending the almost century-old Public Service Act, which aims to remove the 40 percent foreign nationality ownership restriction imposed on most public service companies under the 1987 Constitution.
However, Republic Act (RA) No. 11659, or the Public Service Act of 2022, remains inoperative due to the lack of implementing rules and regulations, along with a pending Supreme Court (SC) petition questioning its constitutionality.
“We tried means of relaxing [foreign ownership restrictions] like the passage of the Public Service Act. What we did is really some sort of sidestepping, not directly addressing it, but sidestepping it to relax it,” Miral said.
Miral emphasized the uncertainty faced by potential investors as the case remains pending in the high tribunal.
“So until now, I don’t know if there are investors willing to invest here knowing that there is still a case pending in the Supreme Court, and we don’t know when it will be resolved,” Miral said.
Acidre echoed Miral’s concerns about the lack of stability in economic policies.
He emphasized the importance of clarity and stability in the legal framework to instill confidence among foreign investors.
“The cloud of doubt whether we have not crossed the sense of the constitution will always be there,” Acidre lamented.
The party-list lawmaker urged for a long-term solution by clarifying and strengthening economic policies through constitutional provisions.
“The long-term solution really is to clarify, to provide sufficient, stable, and stronger foundation for our economic policies by incorporating the appropriate provisions in the Constitution,” Acidre emphasized.
Both the House of Representatives and the Senate are actively discussing proposed amendments to specific economic provisions in the 37-year-old Charter, focusing on areas related to public services, education, and advertising. These proposed amendments include adding the phrase “unless otherwise provided by law.”
One of the key proposed constitutional economic reforms aims to reassess the 60-40 equity rule on foreign ownership. Currently, foreigners are only permitted to own up to 40 percent of companies in the Philippines.
The 60-40 rule, favoring Filipino businessmen, has long been identified as a significant barrier to a substantial increase in foreign direct investment in the Philippines, impeding the country’s economic growth trajectory.
