A MENDING the Constitution to loosen restrictions on foreign investment and ownership is going to be, or at least should be, a make-or-break issue in the 2016 election campaign.
Vice President Binay, who is officially a candidate for the presidency, has given the issue a nod, saying in his “true state of the nation” campaign speech in Cavite on Monday that he would push for amending the economic provisions in the Constitution if he were elected.
In his expansive speech to the Asia CEO Forum last week, Senator Ferdinand R. “Bongbong” Marcos Jr. mentioned it briefly, as one of the ways the country could attract more investment.
Liberal Party standard-bearer Mar Roxas, having not yet gotten over the euphoria of having been “anointed” by President BS Aquino 3rd, has not offered an opinion on the topic.
The simple way to solve the problem, the method presented in the handful of abortive attempts to push the initiative through Congress over the past dozen years or so, is not to change the existing provisions and the 40 percent limitation on foreign ownership they impose, but simply to add the phrase “except as provided by law” in the appropriate places.
It is a sensible idea, one that is long overdue, and the next president should make it an early priority of his administration.
Amending the Constitution in this manner answers the critics who claim – though without really being able to present actual arguments to back their assertion – that allowing greater foreign ownership of assets in the Philippines will lead to exploitation, because it retains the current restrictive framework as the default state. It allows the government flexibility in setting limits and conditions on investment in particular sectors, thus making more effective economic planning possible; not every industry or business sector will benefit from full foreign ownership at any given time, others probably will. Providing a means to legally bypass the Constitution’s arbitrary limits when necessary allows completely objective assessments.
Every country in the region that is currently enjoying some level of economic growth has had to at some point ease its own foreign investment restrictions, and the disadvantaged neighbors who still trail the Philippines in terms of economic strength, places like Cambodia, Myanmar, and even isolated Laos, have evidently realized they must do the same, and are catching up at an impressive, though alarming rate.
And we have to ask, what exactly are opponents of liberalization protecting? While we certainly agree that Filipino businesses deserve to have an advantage in their own country, when protections ostensibly for the sake of business turn into protections for a handful of giant conglomerates controlling every aspect of the economy to the detriment of Pinoy consumers, we believe those measures have clearly outlived their usefulness.
Amending the economic provisions of the Constitution simply must be done. Other ideas that have been suggested, such as setting up more special economic zones and revising the restricted investment lists, are not without value and are worth exploring as well, but they are still subject to the same constitutional boundaries. They are at best only partial solutions.