Two big business groups uneasy with Cha-cha
The leaders of two major business groups said they were wary about amending or revising the 1987 Constitution as a means to further liberalize the Philippine economy, signaling private sector hesitation to support a process that is seen as costly and time-consuming compared to passing simple legislation.
“Our point of view is that some [economic policies] can be done without constitutional amendments,” Philippine Chamber of Commerce and Industry (PCCI) President George Barcelon told the Inquirer in a phone interview.
He said that Congress would have to decide whether changing the Charter would be done through a constitutional convention (Con-con) or not.
“But that would take time and money,” Barcelon said. “If it’s just legislation on specific economic provisions, it will just be both chambers of Congress which have to make a decision. We are for that instead because of the urgency.”
The 45-year-old PCCI is the country’s largest business organization. The group has over 1,900 member companies, enterprises and trade associations.
Barcelon said that regular legislation or even executive issuances were proven sufficient and fast enough to address key economic concerns in the past.
The PCCI official cited in particular the Foreign Investments Act, the Retail Trade Liberalization Act, the Public Service Act and even the Corporate Recovery, and Tax Incentives for Enterprises (CREATE) Act.
Sergio Ortiz-Luis, president of Philippine Exporters Confederation Inc. (Philexport), expressed similar sentiments in another interview with the Inquirer, citing the same concerns raised by Barcelon.
“We are not sure if we have to amend the Constitution just to (liberalize the economy). It’s too costly and risky,” Ortiz-Luis said, uneasy about other Charter provisions that might be tinkered with once it is opened up for amendments or revision.
Cagayan de Oro Rep. Rufus Rodriguez, the main proponent of Charter change (Cha-cha) in the House of Representatives, had admitted that political provisions could be opened up for changes, too.
Changes under Duterte
“There is no urgency to amend the political aspects of the Constitution. If they want to liberalize the economic provisions, I think there are other ways to do that,” Ortiz-Luis said. During his term, former President Rodrigo Duterte’s economic team showed how. They pushed to amend the three antiquated laws that were cited by Barcelon instead of amending the Constitution.
The amendments to the public service and foreign investments laws signed by Duterte in March 2022 and the amended retail trade liberalization law in December 2021 are meant to open sectors which had been closed to foreign investors.
Under Republic Act No. 11659, which amended the 85-year-old Public Service Act (PSA), the country’s telecommunications, airlines, expressways and tollways, railways and shipping industries would now be open to full foreign ownership.
The amended law excluded these economic sectors from the definition of “public utility” and therefore no longer subject to the 40-percent foreign ownership cap under the 1987 Constitution.
The new PSA limits public utilities to the distribution and transmission of electricity, petroleum and petroleum products pipeline transmission systems, water pipeline distribution and wastewater pipeline systems, seaports and public utility vehicles.
The amended PSA is seen to attract foreign capital, generate more jobs and introduce innovation that can lead to improved quality and lower prices of public services.
American Chamber of Commerce of the Philippines executive director Ebb Hinchliffe was delighted with the passage of the new PSA law in March last year.
In a Viber message to the Inquirer, he said: “There are several US companies [which I’m] not at liberty to name at this time that are waiting for the bill to be signed. Add this to the CREATE bill, retail trade bill, the amendments to the FIA (Foreign Investments Act), and now the PSA, this has been a very business-friendly Congress and administration.”
Writing an opinion piece for the Inquirer in December last year, former Finance Secretary Gary Teves said he supported Cha-cha, specifically the removal of the remaining restrictive provisions in order to make the country more competitive and attractive to foreign investors.
At the same time, however, he cited other problems that hamper economic growth and possibly investor hesitance, particularly the lackluster supply chain service delivery, the high cost of electricity and low power grid integration, corruption, as well as the relatively slow broadband connection in the country.
Robin leads push
He said the Philippines also needed to strengthen its infrastructure sector to lower the input costs in doing business, suggesting that the current administration should continue accelerating infrastructure development by engaging in more public-private partnerships.
First-term Senator Robinhood Padilla has been pushing for the amendments to the Constitution, saying that the country has been lagging behind other Asian economies with regard to the entry of foreign direct investments due to the country’s restrictive economic policies.
The Philippines ranked as the third most restrictive economy in the world, based on a 2020 report by the Organization for Economic Cooperation and Development.
The House last week approved the proposed Resolution of Both Houses 6, which calls for a Con-con to amend the Constitution’s economic provisions.
The Constitution requires that for such a resolution to be approved, it must get at least two-thirds of the vote of the members of Congress. However, it does not specify if each chamber should vote separately or jointly.
The bill to implement the resolution, House Bill No. 7352, was approved by the House constitutional amendments committee chaired by Rodriguez and is now being deliberated by the House plenary.
The proposed law will establish a Con-con made up of 304 delegates, 80 percent of whom are to be elected by the public. The other 20 percent will be sectoral representatives to be appointed by President Marcos. Each delegate will get a per diem of P10,000. —WITH REPORTS FROM ANA ROA, JULIE M. AURELIO AND INQUIRER RESEARCH