2 ex-justices air views on 100-percent foreign ownership

Former Supreme Court Justice Adolfo Azcuna and former Supreme Court Associate Justice Antonio Carpio (INQUIRER FILE PHOTOS)

MANILA, Philippines _There is no constitutional problem in allowing 100-percent foreign ownership in certain industries in the country, but there should be “reciprocity clauses” when amending economic provisions that limit foreign ownership in those sectors, two former justices said during the House of Representatives hearing on Resolution of Both Houses No. 7, which seeks to ease foreign ownership limits in public utilities, educational institutions, and advertising.

Constitutional framer and former Supreme Court Justice Adolfo Azcuna said such amendments were “constitutional as long as there is no showing that the effective control of Filipinos of the entire economy has been negated.”

READ: Carpio cites PH laws on foreign ownership of businesses

“If doing so (allowing full foreign ownership in certain economic sectors) would deprive Filipinos of effective control of the economy, then the legislation would be unconstitutional,” he added.

‘Self-reliant’ economy

Azcuna’s comments were in response to ACT Teachers Rep. France Castro’s question about whether proposals to allow full foreign ownership in certain sectors would negate Article 2, Section 19, of the current Charter, which mandates the state to “develop a self-reliant and independent national economy efficiently controlled by Filipinos.”

There have been some propositions to simply delete this provision on self-reliance to avoid getting entangled in future legal challenges once proposals to amend the economic provisions pass.

However, Azcuna said the country “should still have an economy effectively maintained by Filipinos while allowing foreign investments to come in in certain areas.”

Carpio: Reciprocity for Filipinos

During the continuation of the House hearing on Wednesday, former Supreme Court Associate Justice Antonio Carpio told lawmakers that if the country would allow 100-percent foreign ownership of public utilities and other services, then Filipinos “must likewise be able to own 100 percent of the same businesses in the countries of these investors.”

“This is fair and equitable to Filipinos and foreign investors alike,” he said.

Such a clause, he said, was not new as this was already included in the amendment to the Public Service Act, which prevents foreign nationals from owning more than 50 percent of capital in critical infrastructure unless their respective countries accorded reciprocity to Philippine nationals.

He suggested that, when opening up these provisions, to insert the clause “unless otherwise provided by law, subject to reciprocity and two-thirds vote of both the House and the Senate.”

Temporary restrictions

Azcuna, now 85, has twice been part of the process to amend the Constitution—first as a member of the 1971 Constitutional Convention and as member of the Presidential Constitutional Commission in 1986. He later served as Corazon Aquino’s legal counsel, press secretary and spokesperson.

In 2002, he was appointed associate justice by former President and Pampanga Rep. Gloria Macapagal-Arroyo.

Azcuna noted that the framers of the 1987 Constitution intended its economic provisions, particularly the three being considered for amendment through RBH 7, to be in effect only for five years and not for nearly fourwq decades.

Azcuna maintained that his peers expunged the phrase “unless otherwise provided by Congress” from the section pertaining to the ownership of educational institutions with the intention of possibly changing the provision after five years.

Azcuna: Untouched for 37 years

Azcuna said: “Why didn’t we put it originally? The reason was because we did not want Congress to change it then, precisely for at least five years. We wanted no change by initiative. There’s a five-year period, we wanted the economic framework to work for at least five years.”

“We did not expect it to be unamended for 37 years so the time frame, in our minds, is five years then it could be amended after. But we did not have any amendment, even on the economic provisions for 37 years,” he added.

‘Situation has changed’

“[E]conomic policies should not be frozen in time for a long period. It’s now 37 years from that time and the situation has changed. The strictly nationalistic approach has to be modified to be able to meet current trends in the world economy while still trying to maintain… an economy effectively controlled by Filipinos,” he said.

Still, the former associate justice appointed by former President Benigno Aquino III was not too keen on Charter change.

Carpio argued that what was discouraging foreign investors were bureaucratic gaps and the absence of the rule of law in the country.