Friday, February 19, 2016

The Need for Economic Chacha


“Progress is impossible without change, and those who cannot change their minds cannot change anything.” - George Bernard Shaw

The issue on whether to amend the Constitution has always been raised by both the Senate and House of Representatives through Charter Change. There have been initiatives to amend the 1987 Constitution under every presidential administration. One of the amendments proposed was to change some restrictive economic provisions of the constitution. Even the business sector has shown its support to the Congress to change the economic provisions of the constitution, particularly, the removal of foreign investment restrictions in some industries.

“Much has changed in Asia since the restrictions were placed in the 1987 Constitution,” the businessmen pointed out. The Philippines’ population has more than doubled since 1987, they added. “Amidst this development, the largest economic challenges are high poverty levels, ensuring inclusive growth, and reducing underemployment,” they said. “The Philippine government should maximize the amount of foreign investment generated as a means to drive down unemployment and underemployment levels.” [1]


To determine which economic provisions need amendment in order to attract higher levels of foreign investments, we can turn to the seven foreign chambers of commerce in the Philippines who did us the service of identifying the most critical changes that can accelerate economic growth in the Philippines.  In the very valuable document entitled "Arankada Philippines 2010:  A Business Perspective," these needed amendments were literally handed to us on a silver platter.  On pages 279 to 282 of this document, we read:  "Constitutional restrictions on land ownership and public utilities in place since 1935 are the most formal barriers to foreign participation in the Philippine economy.  Relaxing them would ease the entry of foreign capital needed for further modernization and growth and could increase competition in these sectors, benefiting the entire economy.  Other constitutional restrictions limit foreign investment in advertising, education, media and natural resources." [2]


Unlike in other countries, Philippines have a great difficulty in attracting foreign investors. Amendments in our constitution such as removing of the 60%-40% equity limitations on foreign investors and the control and management exclusively by Filipinos in companies with foreign equities, expanding the role of foreign investors in the exploration, development and exploration, development and utilization of natural resources, and allowing foreigners to own industrial and commercial lands will surely make Philippines viable and attractive country for Foreign Direct Investment. 


These Foreign Direct Investments will create lots of jobs, thus, helping the Philippines eradicate unemployment. It’s not unknown to us that high unemployment rate forces Filipinos to go abroad and leave their loved ones. Also, by allowing these foreign investments, it will provide high quality skills training and provide Filipinos with exposure to higher standards of operation and business systems.

MBC president, Ramon del Rosario  Jr. explains: “ Now is the time to address the restrictive provisions in our economy because we are at what we call a “sweet spot” where there are so many positive things happening in our country. Our economic growth and fiscal stability – all these things are happening in our favour.” [3]


As such, I believe that it’s necessary to amend the economic provisions of constitution. Amendment of these is part of the democratic process.  When the 1987 constitution was constituted, the Philippines had just recovered from the Marcos regime. Twenty-eight years had already passed. Change is inevitable especially the conditions and situation of the society. The laws must adapt to these radical changes. Our constitution, as the supreme law on the land, relies on the State on the duty to provide good quality life to its people. The current leaders must make sure that the Constitution will continue to be a tool for economic opportunities and social justice for the people.





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[1] http://www.manilatimes.net/economic-charter-change-pushed/233050/
[2] http://business.inquirer.net/12037/understanding-the-charter-change-issue
[3]http://www.philstar.com/opinion/2014/08/24/1361143/amending-constitution#sthash.7zOoj9ED.dpuf



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