(INQUIRER FILE PHOTO/ MARIANNE BERMUDEZ)
MANILA, Philippines — Economist Raul Fabella on Thursday stressed the need for amendments to the 1987 Constitution and the adoption of comprehensive economic reforms to enhance the country’s investment climate.
In a statement released by the office of Speaker Martin Romualdez, Fabella highlighted the stark reality of the Philippines’ investment rate, which stands as the lowest among selected Asean countries, at 22.4 percent.
His paper, titled “PH Investment Rate: Why are we far behind? How do we rebound?”, showed that nations such as Thailand, Indonesia, and Vietnam have higher investment rates, with China’s investment rate reaching between 34 to 50 percent in recent years
This disparity, he noted, underscores the Philippines’ preference for consumption over investment, resulting in a low savings rate and an “anti-investment ecology.”
“All economic progress boils down to investment. Countries that invest less will over time eat the dust of countries that invest more,” he pointed out.
Fabella also bared that three years after the implementation of Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act, which was aimed at boosting investments, the country’s investment rate remained stagnant at around 25 percent.
He underscored the need to reverse this trend and attributed it to various factors such as property rights issues in agriculture due to the Comprehensive Agrarian Reform Program, restrictions on mining and forestry investments, high power costs, bureaucratic inefficiency, corruption, and inadequate infrastructure.
To address these issues, Fabella proposed strategic measures, including lowering power costs, encouraging investments in agriculture by adjusting land ownership ceilings, and redirecting financial strategies towards consolidating small farms.
He also suggested lifting Section 11 of Article 12 of the 1987 Constitution, and highlighted it as a crucial step to improve the investment climate by removing limitations on foreign ownership in business enterprises.
He likewise called upon stakeholders and different sectors to support such initiatives to allow the country to foster a pro-investment ecology, ensuring sustainable economic growth, job creation, and technological advancement.
President Ferdinand Marcos Jr. also recently stood firm on his position that economic provisions of the 1987 Constitution must be amended.