Pro-charter change (Cha-cha) legislators and advocates are so desperately trying to stir up a groundswell of public support that they’ve taken to foisting the biggest lie on the Filipino people: that removing the 40 percent cap on the foreign ownership of land, natural resources and certain industries will bring a deluge of foreign direct investment (FDI) that will spur the country’s economic growth.
It’s a false and flawed formula that’s been debunked in numerous surveys and studies by renowned global institutions.
What matters most to foreign investors isn’t majority ownership but a host of other factors.
According to the United Nations Conference on Trade and Development (UNCTAD)’s World Investment Prospects Survey for 2013-2015, for instance, transnational corporations are more concerned about a country’s corporate tax regime and process of regional integration that would facilitate access to regional markets.
Another recent study on FDI inflows to Asean member-states revealed that foreign investors are attracted by a country’s high manufacturing output since that would indicate the presence of quality capital and labor that can support production.
The same study also showed that a country’s consumer income is crucial to enticing would-be investors. Why? Because when consumer income increases, there’s a higher market demand as the number of customers increase. From the economic point of view, a higher consumer income means a growing economy where investors would be able to make the most of their investment in the country.
Truth is, foreign investors are deterred, not by our so-called “restrictive” ownership laws, but by our low per capita income and high labor, logistics and electricity costs, aggravated by excessive red tape and government regulation, flip-flopping rules and policies, and widespread corruption.
We also need not look far to disprove the myths being peddled by Cha-cha proponents.
China, for example, which PNoy cited as having similarly restrictive and tightly-regulated ownership laws, had an annual average FDI inflow of US$129-billion for the past 10 years.
On the other hand, the Philippines – which already allowed 100 percent foreign ownership of most business activities more than 13 years ago – only had an average yearly FDI of P1.5-billion since 2000.
The way we see it, the only foreign investors really interested in lifting the foreign ownership limits are those involved in the “extractive” industry, who are all probably salivating at the prospect of exploiting (and profiting from) our country’s oil, gas, mineral and other natural resources.
Trying to blunt public resistance to Cha-cha, however, House lawmakers claim the proposed amendments would not automatically remove ownership limits laid down by the Constitution since it merely involves the insertion of the phrase “unless provided by law,” which means Congress would still have to pass laws to lift the restrictions.
These pro-Cha-cha legislators must be taking us for fools.
Not only would the proposed “insertions” deprive Filipinos of their right to participate, decide and vote on any changes to the country’s charter, it would also reduce the fundamental law of the land into an ordinary piece of legislation that is amendable at the whim and caprice of a few legislators.
Perhaps what’s more alarming is that the insertions would leave the crucial decision of what industries to open to full foreign ownership solely in the hands of Congress. That, of course, means monopolizing millions of dollars in potential “lobby money” from special interest groups.
Why are we not surprised?
There’s a coconut insect infestation known as “coco-lisap” that’s plaguing the Southern Tagalog region. Already, more than 500,000 coconut trees have been destroyed by this pest. The speed with which the infestation has spread led many folks to believe that government was in its usual “clueless” state.
Agriculture Secretary Proceso Alcala assured us, however, that government wasn’t the problem.
In an interview in our radio show, “Karambola sa DWIZ (882AM),” Alcala disclosed that the coco-lisap epidemic actually started in Tanauan, Batangas, apparently from a mutated strain of the pest originating from Indonesia.
Early on, he directed Philippine Coconut Authority (PCA) field personnel to start disinfecting plantations as a precautionary measure but some farmers and lot owners refused to let them enter. So they’ve now asked Interior and Local Government Secretary Mar Roxas to let law enforcement officials intervene.
In addition, Alcala has started setting up checkpoints as far as Bicol so that coconut farmers in the region would not share the same fate of their counterparts in Calabarzon. He has also been sending out “quick-response teams” to isolated areas where there are reported infestations.
As Alcala puts it, “we just want to act fast to get rid of the problem.”
Given the coconut industry’s importance to our economy, we are relieved to hear that the
Agriculture Secretary is on top of the situation.
Let’s hope Alcala can get rid of the more dangerous “pests” in the agriculture sector—the smugglers of farm products like rice, pork, chicken, onion, etc.