Rep. LRay Villafuerte of Camarines Sur called on the House of Representatives to amend the constitutional provision restricting foreign ownership of public utilities, saying it hampers the flow of foreign direct investments (FDIs).
Villafuerte made the call in response to the plan of the House and the Senate to form a technical working group (TWG) to craft amendments to the Constitution since President Rodrigo Duterte has yet to appoint members of the constitutional commission.
Villafuerte cited government data from 2011 to 2015 showing that the Philippines only got $20.4 billion in foreign direct investments, lower than Singapore’s $305.6 billion, Indonesia’s $107.6 billion, Malaysia’s $56.6 billion and Thailand’s $42.0 billion.
“Federalism is the way to attain the President’s goal of ensuring equitable regional growth and countryside development. However, federalism should be complemented by liberalizing foreign ownership in many sectors of our economy which can only be done through charter change,” Villafuerte said in a statement.
Under the 1987 Constitution, foreigners can only own up to 40 percent of land and public utility companies, including media outfits and educational institutions.
“I hope the TWG will work on easing constitutional restrictions on foreign investments, in support of the government’s agenda of inclusive growth. The 40 percent [foreign]ownership limit is a deal breaker,” Villafuerte said.
“Even if we amend the Foreign Investment Negative List to accommodate more investments, we will still be limited by this constitutional restriction on foreign ownership. We need to catch up with our neighbors by opening our doors to more foreign investors,” he added.
Villafuerte was referring to the plan of the Finance department to lift the administrative restrictions on foreign equity issued by former President Benigno Aquino 3rd that limited foreign ownership of mass media, practice of professions, cooperatives, private security agencies and small-scale mining, among others.
The Duterte administration is pushing the federal system of government wherein the country will be divided into 11 independent states (regions) which include National Capital Region, Southern Tagalog Region, Northern Luzon Region, Bicol Region, Cordillera Administrative Region, Eastern Samar, Western Samar, Eastern Mindanao, Western Mindanao and Bangsamoro.
Each federal state will have the authority to impose its own tax laws and manage its resources. However, the government has yet to roll out its plans on how this initiative will be set in motion.