New Delhi, India: Easing foreign ownership restrictions will help the country attract more foreign investments crucial to job creation that will ensure inclusive growth, a former Philippine representative to the Association of Southeast Asian Nations (Asean) said.
Speaking on the sidelines of Delhi Dialogue VI held in New Delhi recently, De La Salle University Professor Emeritus Dr. Wilfrido Villacorta said it is about time to amend the Constitution, particularly its economic provisions, to make the Philippines more attractive to more foreign investors.
“I plead guilty to having been one of those who supported the provision against foreign ownership,” he said. He also supported the provision granting a bigger percentage to Filipinos that resulted in the 60/40 provision on public utilities and natural resources.
“I have matured and been more exposed and I can appreciate the need to relax our constitutional restrictions on foreign ownership equity, because that’s what the times demand. Otherwise we will suffer in comparison to many Asean member states or other countries,” he added.
Villacorta was one of the delegates to the 1986 Constitutional Commission that framed the 1987 Philippine Constitution. The 1987 Constitution limits foreign ownership in certain industries, particularly utility companies, to 40 percent.
“The demands of globalization and the needs of the economy and the fact that many countries are able to attract investments, [that is because]they have more liberal rules and laws attractive enough to lure foreign investments,” he said.
Data from the World Investment Report for 2013 released by the United Nations Conference on Trade and Development showed that the Philippines lagged behind other Asean countries in foreign direct investment (FDI) inflows, with only $2.797 billion recorded in 2012.
However, the DLSU professor does not believe that foreign ownership limits are the main reason why the Philippines lags in terms of FDI.
“I don’t think so. That’s why I disagree. While I believe that it was time for us to amend the Constitution, if not change the Constitution, I don’t think the Constitution is the biggest hindrance to foreign investments. I think it’s more of the peace and order situation, red tape, and the cost of conducting business,” he said.
Villacorta added that attracting foreign investments into the country also depends on how well the government addresses other issues outside of amending the Constitution.
“We have to come up with provisions that will limit corruption, limit patronage, all the other things. It’s not just the foreign ownership issue that matters. But more important than that, as I said, is the regulation of practices that are a deterrent to doing business like the high cost of doing business, corruption, infrastructure,” he said.
Meanwhile, Villacorta suggested that should there be a provision for a constitutional convention, the members should be elected by the people.
“While we were appointed by [then]President Cory Aquino, it was our sectors that recommended us and I represented the education sector, and right now there is clamor for direct representation from different parts of the Philippines but they must be elected,” he said.
He reiterated that the amendment of the Constitution should not be done by Congress so that the process will be free from any suspicion, adding that by this time, the Filipino people are ready to adapt to the demands of globalization.