Framer of 1987 Constitution favors economic amendments

Marje Pelayo   •   January 26, 2021   •   919

MANILA, Philippines — Citing the Philippines as having the most restricted economy for foreign investors, top finance and trade officials expressed support for the proposed amendment in the economic provisions of the 1987 Constitution.

These provisions, they say, limit the participation of foreign investors in the country.

This is one of the main reasons why the Philippine economy is far behind its neighbors like Vietnam.

“With average growth rate of over 6% for 14 consecutive quarters, we also know that such growth rates could even have much higher if we were able to remove basic restrictions as to foreign ownership in certain sectors stipulated in the constitution,” said Trade Secretary Ramon Lopez during the House hearing on Tuesday (January 26).

The 1987 Constitution provides that at least 60% of public utility enterprises’ capital stock must be owned by Filipino citizens or corporations.

Finance Secretary Carlos Dominguez believes it is time that the Philippines further open up its economy.

“We must open it up as wide as we can with the exception of land ownership,” he said.

Even economist Dr. Bernardo Villegas, one of the framers of the 1987 Constitution, expressed his support to amend the law’s economic provisions.

He believes that the international community has grown uninterested in a number of economic restrictions in the country.

During the hearing, Villegas noted how they were traumatized by abuses during the 10-year reign of martial law under former president Ferdinand Marcos and the EDSA Revolution.

But then he realized that indeed, there is a need to amend the 34-year old Constitution.

“That is why some people refer to the 1987 constitution as an anti-Marcos Constitution,” he said.

“We included so many minute pieces of legislation, as a constitutionalist will say, do not deserve to be the fundamental law of the land. And that is why irrespective of the timing sooner or later, we have to amend this Constitution not only economic provision but many other political provisions,” he stressed.

Meanwhile, during his opening remarks, House Committee on Constitutional Amendments Chairperson Alfredo Garbin Jr. made it clear that the hearing would be limited to the law’s economic provisions.

“Ang sentro lamang ng diskusyon dito ay restrictive economic provisions, walang term extension, walang lifting of term limits, walang political provisions (The center of today’s discussion is only on the restrictive economic provisions – no term extension, no lifting of term limits, no political provisions),” Garbin noted.

The committee plans to resume its discussion on the resolution filed by House Speaker Lord Allan Velasco next week. MNP (with reports from Rey Pelayo)

DILG welcomes House panel OK of economic revisions to 1987 PH Constitution

Robie de Guzman   •   February 3, 2021

MANILA, Philippines – The Department of the Interior and Local Government (DILG) on Wednesday welcomed a House panel’s approval of the proposed economic amendments in the 1987 Constitution, calling it “a big step towards the country’s long-term recovery from the impact of the COVID-19 pandemic.

“The passage of the resolution is one giant step towards achieving our goal of improving the investment climate of the country which has been curtailed for the past 34 years by the outdated economic provisions of the constitution and devastated by the global pandemic,” DILG Undersecretary Jonathan Malaya said in a statement.

The House Committee on Constitutional Amendments on Tuesday adopted a resolution amending certain “restrictive” economic provisions in the 1987 Constitution.

The Resolution of Both Houses (RBH) No. 2 authored by House Speaker Lord Allan Velasco was approved after 62 members of the committee voted in its favor. Three lawmakers voted against it while three abstained.

RBH 2 proposes to add the phrase “unless otherwise provided by law” to constitutional provisions which provides that only Filipino citizens can control, own, and/or lease alienable lands of public domain, natural resources, public utilities, educational institutions, mass media companies, and advertising companies in the Philippines.

Malaya said opening the economy to foreign investors would yield more jobs, generate more funds for the treasury, and strengthen foreign partnerships for economic growth and sustainability.

The committee, however, excluded RBH 2’s original proposal to allow foreigners to own private land in the Philippines.

“The DILG fully supports the decision of the Committee to prohibit foreigners from owning private land in the country. Foreign investors can always do long-term leases for their factories and houses, so this will have no impact on the quality of foreign investment,” Malaya said.

He assured that the DILG would help Congress in explaining to the people the benefits to be derived from lifting the economic restrictions in the 34-year-old Charter.

“We are confident that the lifting of these restrictions would lead to the entry of more foreign investors and capital to pump-prime the economy and replace the jobs that were lost because of the pandemic,” he said.

He said that the Constitution was written 34 years ago when the dominant idea was protectionism.

“The approval would send a strong signal to the world that the Philippines, like other governments which instituted constitutional reforms, is now ready to provide an attractive investment climate and make the necessary adjustments in the economy to make progress trickle down to the poor,” Malaya said.

House committee chair assures term extension not included in Cha-Cha

Aileen Cerrudo   •   January 28, 2021

MANILA, Philippines — House Committee on Constitutional Amendments chairperson Alfredo Garbin Jr. has assured that term extension of elected government officials will not be included in the proposed constitutional amendment.

In a statement, Garbin said the constitutional amendment would only focus on the economic provisions in hopes to help the country in recovering from the effects of the coronavirus disease (COVID-19) pandemic.

The discussions on the amendment aim “to improve the business climate and attract fresh foreign investments as the country grapples with the impact of the ongoing pandemic.” 

“Let me be clear to those who doubt our intention in holding the committee hearings: our effort is geared precisely to help the economy recover from the effects of COVID-19 pandemic,” Garbin explained.

Ang sentro lamang ng diskusyon dito ay restrictive economic provisions. Walang term extension, walang lifting of term limit, walang political provisions (The center of the discussion is the restrictive economic provisions. There is no term extension, no lifting of term limit, no political provisions),” he added.

House Speaker Lord Allan Velasco in July 2019 filed a proposal to change specific provisions of the Constitution, such as five amendments to Article XII (National Patrimony and Economy), one amendment to Article XIV (Education, Science, and Technology), and one amendment to Article XVI (General Provisions). -AAC

Former NEDA chief says ‘yes’ to change in Constitution’s economic provisions

Marje Pelayo   •   January 13, 2021

MANILA, Philippines — Among those who expressed agreement in changing the economic provisions of the Constitution is former National Economic and Development Authority (NEDA) chief Ernesto Pernia.

He believes that, at this stage, the country’s economy is slowly recovering from months of the crisis caused by the coronavirus disease (COVID-19) pandemic.

Pernia said amending the Constitution will facilitate further and faster economic growth. 

He noted that one way to ensure economic progress is to welcome foreign investments into the Philippines similar to what Vietnam did where their economy progressed despite the pandemic in 2020.

The former economic head said the Philippines has the strictest measures among countries in the world in terms of allowing foreign investments.

“In fact, there are already green shoots of signs that the economy is in the early stages of recovery. But we really need to push that with policies including allowing direct foreign direct investments into the country so that this recovery will accelerate,” Pernia said.

Meanwhile, Deputy Speaker Wes Gatchalian believes that this is the right time to reopen the economy considering the number of Filipinos who lost their jobs including overseas Filipino workers (OFW) and companies that terminated their businesses. 

According to Albay Representative Joey Salceda, the country’s economy will gain an additional US$5-B to US$7-B or about P240-B to P336-B every year once it opens its doors to foreign investments.

Interior Undersecretary Jonathan Malaya, during the hearing in Congress, endorsed the more than half a million signatures they collated from 72 provinces across the country supporting the amendment in the economic provisions of the Constitution.

Malaya believes the number will reach millions if not of the pandemic.

For his part, Professor emeritus at the University of the Philippines School of Economics Dr. Raul Fabella said among the challenges facing foreign investors in establishing their businesses here include high cost of electricity, the quality of judicial system and the peace and order.

He cited, as an example, the construction of the Ninoy Aquino International Airport (NAIA) Terminal 3 which amounts to US370-M dollars and has an impending case over ownership that reached the Supreme Court.

“In 2013 the court of appeals awarded Piatco 371 million dollars as just compensation. The Philippine Supreme Court affirmed the Court of Appeals’ decision in 2015, by that time the debt has ballooned to 24 billion pesos,” Fabella noted.

Research group Ibon Foundation, meanwhile, said there is no reason to change the Constitution if the issue is only about economic recovery because the government may simply provide financial assistance such as stimulus package.

“The economy’s development lies in using the protections in the Constitution to gain from foreign investment, not in taking away the protections and giving self-interested foreign investment free rein over the domestic economy,” explained Rosario Guzman, Ibon’s Executive Director and Head of Research Division.

The resolution filed by House Speaker Allan Velasco proposes the insertion of the phrase ‘unless otherwise provided by law’ in the concerned provisions that limit the entry and participation of foreign investors in the country’s economy. MNP (with reports from Rey Pelayo)


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