MANILA—A group of prominent economists and socio-political analysts voiced support for a recent initiative by Speaker Feliciano Belmonte Jr. to liberalize economic provisions in the Philippine Constitution, saying such reforms were direly needed to attract the “right kind” of investors and support economic growth that benefits the broader populace.
“We believe that the country cannot experience inclusive growth, reduce poverty, and combat joblessness except by removing these restrictions from the fundamental law of the land and allowing Congress to liberalize those provisions as may be needed,” the Foundation for Economic Freedom (FEF) said in a statement on Thursday.
FEF is chaired by former finance secretary Roberto de Ocampo and the vice chair is former finance undersecretary Romeo Bernardo while the president is Calixto Chikiamco. Economist Gerardo Sicat and Cesar Virata, prime minister during the Marcos dictatorship, sit as advisers. The board of trustees include Ernest Leung, Thomas Allen, Art Corpus, Felipe Medalla, Vaughn Montes, Gary Olivar, Simon Paterno, Gloria Tan-Climaco and Francis Varela.
“We believe that liberalizing the economic provisions of the Constitution is part of Daang Matuwid (righteous path) as it would attract the right kind of foreign investors into our country and would eliminate the incentive for foreign businessmen to evade those restrictions by corrupting our institutions,” FEF said.
FEF urged President Benigno Aquino III to support the effort of Speaker Belmonte to spearhead constitutional change either by Constituent Assembly or by the Senate and House chambers voting separately and three-fourths of the members of the respective chambers approving the changes.
Belmonte is moving to amend the Constitution via the legislative route and to insert the phrase, “except as otherwise provided by law” in those provisions in the Constitution mandating majority or 100 percent ownership by Filipinos of certain sectors of the economy.
The areas often sought for liberalization whenever talk of constitutional amendments springs up are the following: mass media and advertising, land ownership, educational institutions, utilities and natural resources.
Calixto, in an email to the Philippine Daily Inquirer, said amending the Constitution would be a big boost to the government’s bid to roll out big-ticket infrastructure projects under the public-private partnership (PPP) framework or to boost investments in vital capital-intensive sectors like telecommunications.
“The number and quality of bidders for PPP infrastructure projects, especially in the construction and operation of airports, have been limited due to the 60/40 rule imposed by the Constitution,” Calixto said.
The national security angle had been ignored in the debates on constitutional amendment, Calixto said. However, he said the implications could be significant.
“The lifting of foreign ownership restrictions in the Constitution is in the interest of national security, especially in the light of the country’s confrontation with China in the West Philippine Sea,” Calixto said.
Unless these restrictions are removed, Calixto warned that the present limitation would only result in adverse selection of investors: foreigners who are willing to evade or bend the rules in order to get greater participation and control of strategic parts of the economy are the only ones who will invest.
“It’s well-known that despite these restrictions, Chinese investors are already in control of a large shipping company and our national power grid. There may be others,” he said.
“Moreover, by attracting more foreign investors into the economy, especially in key sectors like public utilities, we give foreign governments the interest and incentive to make sure that there’s peace and stability in the region, unimpeded access to our maritime waters, and a rules-based conduct in access to our seas and other natural resources,” Calixto said.